Going to session lows area traders have been looking past the escalating tensions to signs of the pandemic recovery. Hong kong is bracing for what the biggest protest in months as the City Government meets to discuss criminalizing disrespect for chinas National Anthem. Shery looking at markets trading at the moment, u. S. Futures are down. 1 as the s p 500 and the rest of the broader markets are in the green. Still fading in late trading sessions. The s p 500 going back below the 3000 level. It had stayed up but bloomberg reported the u. S. Is mulling sanctions on u. S. Officials and firms over Hong Kong Chinese officials and firms over hong kong. We got chipmakers exposed to china tumbling at the end of the session. The usual laggards led the gains today which was an interesting rotation when it comes to the markets. We had data, Consumer Confidence was stabilizing in may. Looking at a mixed session in asia as we get these conflicting signals like concerns over the u. S. China relationship and the future of hong kong and everincreasing signs we are seeing reopening of the return of Economic Activity. Japanese futures and futures trading in hong kong pretty flat, contracts in australia seeing a bit of a pullback and we are watching trading in new zealand as well. Story,back to our top sources tell bloomberg the Trump Administration is considering a against measures chinese officials and institutions over its crackdown on hong kong. Emily wilkins joins us. What do we know . Shelly emily we know beijing is speaking about imposing National Security measures in hong kong. The news has not been taken well in the u. S. We know the Treasury Department could impose sanctions on china and freeze assets of chinese officials, could impose controls on transactions. No decision has been made, but it seems the u. S. Is trying to weigh their options if china moves against hong kong. Does the president say about the prospect of action being taken . Emily he has a careful line to walk. If the u. S. Does wind up putting sanctions on china, what could result is hong kong sanctions could be imposed on hong kong by china. Trump says it would be difficult can be aw Hong Kong Financial hub if china takes over. It remains to be seen what the consequences of that would be. That is what the president is thinking up today. Shery we are seeing a bipartisan push back by beijing across washington. What are we seeing with potential legislation against beijing . There are several bills, but the action will be in the house. In the house a week ago, a the senate, they passed bill against china for the muslim uighur population. It will go to president trumps desk. Congressional government reporter Emily Wilkins there with us. Youill continue to bring all of the voices from all sides of the debate of hong kongs future. Will be joined by the former secretary for justice for the city. The vicechairman of also martin lee and later member. Irginia o[there regina ip donald choi tells us how the fresh unrest is affecting the hong kong Property Market that is really from the vibrant really from the virus that is reeling from the virus impact. Good trading has darkened its outlook, saying gdp will fall 4. 6 this year. The agency says its view is based on downward revisions in the u. K. In the eurozone and emerging markets including china. They say they see a technical pickup of 5 in Global Growth next year. Early Economic Indicators from china show the country is inching out of the slump with Business Sentiment rising despite the bleak global future. Small companies are more confident than they were since the pandemic struck with production in order numbers climbing. Consumption in imports continues to shrink. The city at the epicenter of the Virus Outbreak says it has tested most of its population in braces forchina another wave of infections. Almost 7 million have been infected this month. Most Wuhan Companies have volunteered to check its staff. Indonesia has employed the army to enforce social distancing. Almost 350,000 personnel will guard public transport, shopping malls and tourist sites. Malaysia saw its biggest jump since april 3 amid increased testing of Migrant Workers and thailand is extending its state of emergency to the end of june. 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. Shery u. S. Stocks closed down from session highs on the potential white house retaliation, highlights into the fragile state of the market. We get the outlook from david. Consumers to confidence stabilizing, jamie dimon with an about optimistic view. This is bloomberg. We have the november election but until november, markets hold. We are seeing impressive performance. There was a chance will have a healthy ipo market. Haidi more sides of fertility with u. S. Markets. Futures are slightly down after the index started with a close below the psychologically key 3000 point level. Lets get more insight with david kotok, chairman and cio of cumberland advisors. He joins us by phone. We have been tossing around this question with implications of Economic Data and exuberance we have seen in the recovery for some time. What are you seeing . Is it the case there are not real alternatives . I dont know about the longterm returns because it is so hard to guess at what they are. ,ntil we get across the valley get beyond the virus, get to the ks dean, get the antibody get to the vaccine, get the antibody test, it is hard to see the other side. We have estimates of what we think the damage will ultimately economics will look like two years from now. This is a global pandemic. It is going to reduce growth rates, do damage. The markets seem to be ignoring that. Lots ofets are saying liquidity, lots of central bank support. They are celebrating the outlook. Lets hope we get the positive outlook rather than a second wave which will be a shock for the markets and economies. We hope for the better outcome. That is how things look to me. For an astute investor, you talk about liquidity. You can get some semblance of price discovery, given we have so Many Companies withdrawing guidance or giving guidance looking like downside of 20 for the next 12 months. We are struggling with that question because we have to take avoids and decide to them. The u. S. Stock market portfolios, with ink we think they have a long road a very active Worldwide Growth for all of the obvious reasons. The efg sector. We are overweight water, wind and solar. We think coming out of the pandemic experience will be an awakening that in some places thoselevate characteristics. Hegemonyedge enemy solar farm in nevada will our 2000 homes power 2000 homes. Reserve. Lding a cash we are not fully invested. We think the risk profile from this extraordinary pandemic experience is very high. While the like what we see ended is improving in markets and science is advancing vaccines, we are not fully invested. We have a cash reserve. Shery are there sectors of the market that have been going deep into different parts of the economy including the muni market . David we think so. The muni market in our view is one of the great bargains. Today, ife work on, you take the yield curves of inhest grade sovereign debt the United States, switzerland, germany and you take the aaa sovereign states of the United States, states like utah with bondscredit strength, the of those states are higher than the Interest Rates on taxable u. S. Treasury obligations. Taxfree tong about american taxpayers with at the same time, when you compare those with other jurisdictions in the world of highgrade credit, those greats rates are lower. It is not just for the american taxpayer. We are seeing foreigners come into the market to get additional yields. We call them crossover buyers. Payment of a raw higher interest payment. Haidi i alluded to this in my thet question but this is first question of the day. Why are we seeing this massive dislocation between real and Financial Markets . Is it because of the fiscal and stimulus being deployed globally . Thesis as to why we are seeing this . Nail on theit the head. We have the largest centralbank response ever. The largest fiscal response ever. The combination of the two is extremely powerful. Invites it provides investors who are willing to look down the road through the three years, because the earnings this year will be terrible, economics this year, terrible. If they are look willing to look to or three years down the road, they say when we get beyond this, this will be the place to be, equity investors. The Interest Rates on highgrade debt are likely to be lower for longer. That is a decision. With the liquidity firepower as great as it is, stocks have been up because they dont have selling pressure. Is other thing i would add that the selloff was so sharp, so severe, the vix went to 80. Extraordinary. It is still high at 28. We can see gradually acceptance of risktaking. That would suggest the stock market in the United States can go higher and i will add one more. I think stock markets around the world will start to improve and be robust and in the Asian Countries, because the Asian Countries have more experience with this type of pandemic than the United States or the western countries. South korea is an example of a country that knows what to do and how to do it. A population of 50 Million People, they are testing and addressing the virus. There are other examples as well. Shery how much would that have to do with valuations given things across asia seem much cheaper . Bargainsey look like to me. The issue is can we look across the valley and get to the vaccines and the treatment protocols that allow opening up and resumption of activities . Will the surviving companies have learned from these experiences . We will have a selection process. The surviving companies and businesses that will trade on the stock exchanges will be powerful enterprises unlike anything we have seen. The result of such a tragic event in history will be proven again to be the source of the next growth spurt once we get beyond it. We have always had that as the sequence. It is a shame because we are losing many hundreds of thousands of people to death and millions to illness. Nobody wanted it. Nobody asked for it. But coming out of it, i am an optimist the world will be a and the, better place entrepreneurial spirit will suppress the virus and we will go on. [indiscernible] haidi we will leave it there. Thank you very much, david kotok. Dont miss the exclusive interview ahead. We will be joined by kim stafford to discuss the Coronavirus Impact on client interest. This is bloomberg. Shery fears of a second wave of infections as china resting up testing in wuhan ratcheting up testing and move on. Sophie kamaruddin has the details. Comeseconomy across asia from stitch . That would be india. Compared to the earlier forecast of 8. 7 Economic Activity did collapsed during the lockdown and millions of jobs lost the markets expect more support from the r. B. I. As fiscal pressures mount through the government which could put india on the path for a ratings downgrade is the budget hit double digits. They did maintain the forecast for china as its lockdown eases. There is a slow recovery on the mainland as Business Sentiment in troops in may and new orders pick up with production according to a survey. , and secondt likely wave quarries remain which led to the launch of a mass Testing Campaign on may 12 in wuhan. Nearlys 7 nearly 7 Million People have been tested. Shery [indiscernible] have boosted virus relief. Tell us some of the details there. Sophie in thailand the lockdown has been extended until the end of june, the cabinet did approve plan2 billion cash handout. This could be funded from borrowing already planned by the government. More funds sales are on tap and the type parliament as for singapore the fourth round of stimulus at 23 billion with the jobs the central focus. 1500 jobs are to be created. They are opening 25,000. That brings total support to 20 of singapores gdp. Posted germany and japan and closeng the budget gap to germany and japan and widening the budget gap. Japans state of emergency, what is the latest . Sophie with the economy forecast going to the Prime Minister announcing the second extra budget this wednesday which according to size could result in more Government Bond issuance. That could be 6 trillion yuan yen. ¥30 trillion would be on the table. After the details in a draft document seen by bloomberg, subsidizeto freelancers but the draft did not go to specifics as to the size of the overall rescue plan but ¥30 trillion. That could be what we are looking for. Kamaruddin in hong kong with the latest on the virus and relief measures around asia. Successful vaccine may be the only way to return to normal life. We will be discussing the race for treatment with jerome kim later on. Lets get you a quick check of business flash headlines. Apple is reopening about 100 more Retail Stores in the region u. S. But half will only offer curbside. The openings are across the country from california to new york and around 30 were reopened earlier this month. Locations,70 retail stories that let people inside will require masks and social distancing. Officesill reopen its july 6 but only 10 of its staff, 30 by september. Sundar pichai considers most to work from home for the rest of the year. Most of the people will be in central staff. People will be given 1000 each for expenses on home based equipment. Jamie dimon is increasingly optimistic about a u. S. Recovery from the coronavirus fallout, praising the of the Federal Reserve for their response. He said there has been good backup and that a bounceback will happen in the next few months. The u. S. Economy has been stalling amid lockdowns and the forced layoffs of millions of workers. We are thinking about is the base case. Hopefully this thing will happen. I give it good odds. The government has been responsive. Large companies have a huge wherewithal. Hopefully we will keep the small ones live long enough that most of them get back into business. Haidi hong kong bracing for more unrest as lawmakers push ahead with a bill that would criminalize disrespect towards chinas National Anthem area we will have the details next. This is bloomberg. 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. Karina you are watching daybreak australia. Singapore is focusing on jobs and a fourth coronavirus stimulus package. The measures are to help business counter the fallout from the coronavirus and push the deficit to more than 15 of gdp, the largest in their history. 55 billiongram u. S. As the economy faces its retraction since independence. The fight between the u. S. , china and canada over huawei when theowards later ceo has her first shot at beating an extradition hearing. The Canadian Court will rule if they meet the law. If the judge says no, she could be released from house arrest. If not, she will be extradited. A plane crash in russia killed 97 people karachi killed 97 people. It suffered apparent engine failure. This was after pakistan allowed resumption of domestic flights. It came ahead of the eid holiday. Two people survived. Spacex and nasa have completed preparations for wednesdays historic rocket launch which will see astronauts sent from u. S. Soil sent into orbit for the First Time Since nine years ago. Two ash nots will board astronauts will board a space shuttle. They have had to use soyuz before. 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. Mitchell. A this is bloomberg. Shery hong kong is bracing for the largest day of unrest in months with fresh protests and calls by student groups and a Prominent Trade Union body for citywide strikes. The rallies are to demonstrate against National Security laws by beijing and something that would criminalize disrespect of chinas National Anthem. We have seen that pandemic and the social business and restrictionss social distancing restrictions stalling the protests. Stephen big ones are called for today including a front of the Legislative Council where lawmakers are due for another controversial reading of a law that would criminalize disrespect of the National Anthem. Lam saida law carrie was a priority. People calling for general strike in opposition to the controversial plans by beijing to enact National Security laws in hong kong which opponents feel good curtail essential freedoms and a