And the u. S. Outweigh recent stimulus gains. It share in hong kong. Lift after the exchange relaxes rules around chinese companies. Shery lets get started with a quick check of the markets this is as stocks have fluctuated with gains. Lower we havedow losses led by energy and to wait a, continuing rise in coronavirus. Markets were also under pressure after reports of President Trump and chinas xi jinping for reelection helped, according to National Security advisor john bolton. We did have the nasdaq composite gaining. 2 . Three quarters is trading above the 200 Day Moving Average so we continued to see strength for those big tech companies. We are seeing wti trading below 30 a barrel and we have seen pressure in the new york session after reporting crude stockpiles reached another. Lets show how things are shaping up for asian market. Asian stocks are set for a mixed session with a lot of groups at the open. Qe stocks opened lower. Gains, due in 45 minutes time. A contraction is expected, but a bigger hit to activity is seen showing up. We also have jobs data this morning, unemployment data rising in may, but this will be the key metric to gauge the impact of stimulus. After Central Bank Front brazil delivered a base cut the highestas number of infections in fatalities. And fatalities. We are closing in on the 100 Day Moving Average. This is after paring overnight gains trump failed regarding the leaders. Lets hear more on President Trumps move to sign that bill, executing china of human rights abuses against muslim minorities. It comes after allegations from john boltons book were released, saying among other tolds the President Trump xi jinping that imprisoning uighurs was the right thing to do and sought his help for elections. Really, another explosive book on President Trump. What exactly is john bolton claiming here . John boltons book is absolutely full of stories of the trump administration. Im just seeing headline after headline. As he sought, xi jinping help soughte election he xi jinpings help with the election and one where he approved the imprisonment of the uighurs. Expected to be exclusive and filed a lawsuit trying to block the book from being released to the public, however, various news organizations have begun to report what is inside. Tell us more about this bill signed today and the relationship. The bill requires President Trump to sanction any official responsible for the mistreatment of uighurs. Prompted threats of retaliation but its also the latest escalation we have seen between the u. S. And china. Point, it seems like there is no point to that tension yet. What we have on the International Front . U. S. Isow hearing the downplaying prospects of the u. K. And the eu. Tariffs tos used make his point in the past. We might see that again. Robert lighthizer is confident they will meet make an agreement but there is still a Sticking Point on big culture and i know there has also been a delay in discussions. Thats the one where countries are trying to find an agreement with multinational companies. Haidi Emily Wilkins there with the latest. Lets get the latest of the headlines. Over 1200 flights in and out of beijing have been canceled as the city wrestles with a fresh coronavirus outbreak. Account hasitter said many has been halted at the airport. It has been impose on people near market. The European Union is moving to protect its industry from companies linked to china and other foreign powers. It could be formalized legislation later this year. We could impact companies, forcing them to divest assets and would suspend the strict system of limits around the world. Will notmodi says he suspend his countrys sovereignty after extended clashes. Modi said in the only wants peace, but when provoked, will give an appropriate answer your answer. Both sides have confirmed talks are underway. India north korea has shown his own image of the destroyed office while warning of further retaliation. North korea says it will also send troops to the border reinstall guard posts and resume in the frontline area. Haidi still ahead, we get new Zealand First quarter gdp. We break down those numbers and take a look at the various restrictions. Powell urgesjerome congress to stay the stimulus course on day two of his testimony. A commentator said the fed has become washingtons most potent agent during the pandemic. This is. Bloomberg. Haidi we are getting breaking news at the moment. Solly l will be resuming Online Activity actually. This mine will be resuming Online Activity gradually. This is after a surge in iron or prices coming as the resilient mine shut down earlier. We have seen coronavirus cases in brazil just surge. Brazil is one of the worst hit countries in the world. Returne saying they will resume activity gradually. Lets turn to the u. S. Monetary policy. Jerome powell is urging lawmakers not to turn back to quickly amid increasing debate over whether to extend programs. Guest and guest says response the pandemic our guest manages over billions in assets. Jack, great to have you with us. We continue to hear that they have the markets back about so what could be the unintended consequences as we continue . We are starting to see some of the unintended consequences that this unprecedented quantitative , which makes what chairman bernanke did during the financial crisis just a little test case. It is certainly popping up asset prices. Design. Partially by a study we looked at says that actually, if the fed decided to get going, there would be a lot more runway for them to move. Haidi and this is coming at a time when we are not seeing the economic fundamentals as much as the markets are improving. , how domoment in time you invest . Jack it depends on what you look at in terms of valuations. In terms of forwardlooking valuations, its going to look exaggerated because forward earnings itself was so small. If you look at valuation orative to the economy earnings relative to say cash flow to enterprise value, the market is fully valued i would it but i would valued but would not suggest we are in a bubble or anything like that. Haidi it was tech that was leading. Storythe rotation reflects the view of the equity portfolio. I believe that when we stare down this downturn not knowing how long the businesses and whole economy would be essentially in a coma, so to , it would force investors to look at the equity portfolio. Words, they say other companies will be disadvantaged and equity advent Equity Investors will have to look through companies to survive. What that it was really plow a lot of investors into the quote unquote survivors, and of course, tech is probably a broadbased category that would not only survive a downturn but was somewhat insulated from the downturn. Haidi i want to get your view on the emerging markets. All the places in asia that have so farrst in first out, the winning trade is in bond. It is moderately bullish when it comes to stocks, but still you have valuations pretty stretched. It im you prefer wondering what is in that space. , we are terms of em mostly macro allocators. Mostly, we compare em to developed markets and realize we are both trading at at least a substantial discount to the u. S. And other major markets. G. M. Recognized that there were three things going in favor. Rating,e a higher tech a higher credit quality, certainly a much smaller allocation to below Investment Grade issues. Bigger. He companies are we are situated in a higher growth area of the world, and fundamentally, the holdings were solid. We know it is certainly a better valuation. Haidi does the dollar weakness also factor into the calculations . Jack i think so. Part of the weakness certainly recognizes the risk mentality that we are not all clamoring for a safe haven currency at the same time. Thats a good thing, and it is certainly dependent on a barbell strategy of cap tech and emerging market equity. I think it is a really interesting play. Haidi i appreciate it. Will get more on the markets when our guest joins us in the next hour. A widely available drug is offering new hope. Found theom oxford drug can cut the risk of deaths for patients on ventilators. Researcher told us about the kind of results she would like to see in further testing. To seeyone was excited more data coming in on the drug. Anything we can add to the tool thats huge, so anything can be widely used is absolutely huge. Can findt mean we similar drugs for people who are not so critically ill . I think we definitely want to see the data and look at more data around the drug. We could better understand how to do it in places where mortality is lower. Its very want to see more work getting forward and that could actually be promising. It could have a lower mortality rate to better understand how the impact is unless ill illents on less patients. Is this a second wave . Is it a second virus that has been introduced or it hasnt changed at all . What we are seeing is a second wave in the city after restrictions were eased, so the government is going to have to work hard. We are seeing our own uptick in a lot of states to see how we can implement restrictions to reduce second wave impact. What is the situation in the United States . What can you tell us about why they are in certain states and not others. A lot of it tracks with the easing of restrictions, but we know that the states are having a pretty significant uptick and 22 states are on the downward trend. Thesestates do have numbers but there were restrictions eased up in late may and early june and we are seeing the impact of that being a little too cavalier. If the six u. S. States you are going into tracking and tracing, could you get a handle on it quickly . These developments and drugs and things like that, they dont actually stop outbreaks they improve the outcomes of patients. So as you mentioned, Contact Tracing testing putting lockdowns in place, those are the key tools we have harder have right now. We know that they work and we have seen a lot of outbreaks from other countries. Knowing when to pull the trigger and put restrictions back in place is really huge. I have heard everything from the virus is mutating to top professors in italy saying they got rid of the virus. What do they actually know know . Rk no it is promising better understanding and how to better use the vaccine. What we know is that it is transmissible and it does cause severe disease in a lot of people who get we could look at the tools we have that we know will help ease transmission, which is good hand hygiene and masking to protect us but as far as the virus itself were still learning a ton about it. Theres so much being done every day and yet theres still so much to learn. Dr. Sauer, from the John Hopkins Bloomberg school of health, of course supported by a spirit bite bloomberg lp. Latin americas largest economy grapples with the coronavirus and prepares for an impending recession. Brazil has asked extended its easing cycle. They slashed benchmarks by 75 basis points and 2. 25 as the pandemic tin used to weigh on the economy. Our markets reporter is on the line from sao paulo. It seems the move was expected but the question is what happens next after the bank indicated the june cut. Thats correct. , the rate cut was expected what was interesting is they left the door open. They said they would cut rates again now and then stop. The economic crisis made them change their minds what they are saying is there might be space for an additional rate cut, so this language is additional. What sort of implication are we looking at for the market . It will likely weigh on the brazilian currency tomorrow. Lets remind that falling Interest Rates are one of the reasons why the dow is the worst performing currency in the world why it is the worst performing we can expect it tomorrow. They have only been pricing in 15 basis points after the decision, so they will take into account a more dovish tone. Rates are more limited and at a record low already. This eightmuch will consecutive rate cut actually help the economy . Brazil is grappling with declines and inflation forecasts. The consensus is for 5. 1 sent gdp contraction. 5. 1 gdp a contraction. There is not much data about how low rates can go before they lose effectiveness. This is something that the central Bank Director said recently and it is relevant today. Was already a very significant monetary easing. It also depends on the reform agenda included in the back burner for now. They are in constant clashes with other government branches and its something they are cautious about betting on a strong economic rebound. Bloombergs reporter there in sao paulo, thank you very much for joining us. Lets take a check of the latest business flash headlines. Hertz has been described as potentially worthless. They have halted their views and the stock dropped cash jumped more than 20 on the news. Will get said they nothing until senior creditors are paid. Dsp says theyre looking for investment banks to pitch advisory roles later this week and that potential listings could be worth as much as billion dollars. There will be a secondary listing in hong kong later, making it the second Chinese Company to trade closer to home. The alibaba rival is said to have prompted park interest market interest. They went public on the nasdaq and 2014 raising about 4 billion last week and hong kongs second biggest listing of the year. Coming up, online Producers Oil producers discuss the outlook for the year. This is bluebird. Bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Haidi you are watching bloomberg daybreak australia. The fed chairman is urging lawmakers not to pull back to quickly fund relief for the coronavirus amid increasing debate over extending programs. He told the House Financial Services committee that he think it is a concern if they remove support to early. Al said the economy is recovering but federal aid is required. President trump is turning up the heat on china, accusing beijing of interning muslims and camps. The legislation has brought support from republicans and democrats. Has prompted threats of retaliation from china. A group of seven countries are calling on china to consider its plant security laws for hong kong, saying it will jeopardize what has allowed the city to flourish over many years. Statement has said it is crucial to have open debate and conversation. It shows unity after recent strains strains to hold meetings. Officials say the transfer of a recorder has been delayed because of the impact of the virus. The Iranian Military shot down the flight on generate after mistaking it for a cruise missile. Died. 6 souls on board global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Oil is extending its slide after petroleum slid for the second day in a row. Meanwhile, saudi arabia and other members held an Online Meeting on thursday. Meetinga preview of the with our bloomberg strategist. Haveese inventory numbers suggested that this recovery really hangs on a thread comes. O demand opec may have to meet consummate to stop to keep their members doing what they are supposed to do, which is to produce. With the stock markets quite stretched, i view wti more likely to gravitate towards 20. Theyre going to do the best they can, but i think it will be a losing battle. Haidi what happens post pandemic . We see them in gaming investment share. The best way is to increase production. From what i see from u. S. Shale producers is the kind of broke even. Wasuple of years ago, that 60. We did see signs of that a couple of weeks ago and so they are hoping for sharp d bottoming of demand. Demand was slack and it was lacking. Opec has acknowledged the second half will still see demand suppressed because of the virus. Think we could see second waves and at least partial lockdowns . Market right now is overly optimistic. We just look at the financial crisis, for example, demand stayed down and in fact never really recovered to the previous levels. A global basis, it is really china and chinas economy has been slipping for a while. Been. 5 ofmaybe gdp. , think it is overly optimistic and remember, crude oil has been in the market since 2008 and i suspect it will be more likely to sustain that trend. Oil and gety on Russias Energy minister perspective. Comfortable with the price of 50 a barrel in the longterm. Says they will extend cuts for another month to smooth the market as they recover from the coronavirus shock. Indeed. You are right to mention we have made a decision on the sixth of june for month of july. This was the right decision. We have held a lot of and somehow get through the recovery. We discuss it with our colleagues were able to come up with a compromise decision. I would like turnover that during the many years we have been at this operation, we have always thought we were flexible. Need to make sure the market andnced next to the to be confident about what the. Emand recovery is i would also like to note that we have been given the decision to directly monitor the state of the market to regular monthly to regular monthly monetary committees. To ask about those conformity levels. The data you are seeing that far, are the laggards the likes of iraq which is not just to make to comply but cuts that they failed to comply on. Are you confident these countries are doing so . Talking about conforming to els and luminary numbers and preliminary numbers, i can tell you conformity is at a very high level. At the same time, there are some laggar