That is a quarter of global infections with california seeing its biggest daily jump yet. When we look at chinas new security law for hong kong and protesters are already changing strategies to steer clear of arrest. First, lets get you a quick check up on how markets are starting this morning. Here is Sophie Kamaruddin in hong kong. Sophie asian stocks are gearing up for modest gains. We are seeing s p eminis moving slightly higher this morning and kiwi stocks are heading for a second day of losses when meridian and another Energy Company leading the climbs on rio tinto deciding to Halt Operations in new zealand. The hong kong dollar staying resilient within one standard deviation as they continue to defend the currency and markets shrug off a threat to the peg. Switching off the board to the terminal chart. We are watching to see if the the best sinceng september 2019. We are keeping an eye to see of chinas market value can top 10 million after pushing beyond nine for the First Time Since 2015 and we are seeing market value continue for mainland stocks, 20 year to date. U. S. Futures are continuing to climb even as coronavirus cases pass the 3 million mark, which represents a quarter of all cases globally. Our next guest sees some upside risk. Is this just a liquidity story at this point . Why do we continue to see the dislocation between Market Sentiment and what is going on with the pandemic and implications for the real economy . I think it is more than just liquidity, to be honest. That is part of the story. There has been a wave of support from Central Banks and it has kept rates very low and it will keep them low for five years, maybe 10 years. That is part of the story but i think it is more than that, we are looking at a situation where theres been a stated desire to not have a complete locked down so we are probably through that total lockdown. That does not mean we will not get some rollback or targeted measures, but we are not having a blanket lockdown again i think. Tot means we will continue see this gradual recovery in Economic Activity that we are seeing in the highfrequency data now, the weekly indicators, the pmis, the labor market. From our perspective, that all points to a grinding but gradual recovery in the global economy, specifically and particularly in the u. S. Economy over the next five years and from our perspective, that is a real tailwind to equities and a tailwind in the sense that returns could be much better than we have seen over the last five years, even something more similar to what we saw in the five years coming out of the gsc where returns were quite strong. Haidi we continue to see tech leading the way. And of course overnight, the story was that the big u. S. Tech is being seen as shielded from the virus downside that we are continuing to watch, but are investors forgetting that when it comes to washington and beijing, what is going on in hong kong, that it is u. S. Big tech that tends to get caught in the crosshairs . Isaac yes, there is some risk of that and some risk that the big focus on tech at the exclusion of Everything Else provides a little bit of Downside Risk at the end of the market. Story and i of the think it is not a new part of the story. We have seen tension between china and the u. S. For all of of9, of course, and part 2018, and the ongoing tension is something that is going to become a new normal for a a while. It does not necessarily mean it will be make or break for text. It is something they will have to cope with, regulatory change, and policy change. Dispel theot possibility of further gains and importantly, the focus on that narrow part of the market, although a very large chair, 20 or so of the index, theres a lot of companies that fell by the wayside and have not yet recovered to reflect that better Economic Outlook. Theres a little bit of positive spin on that, positive upside from the tail of the market that has not really recovered yet to afflict that Economic Growth story. Shery could you apply that framework into chinese equities as well . This gtv chart on the bloomberg just showing how overextended the shanghai composite right now looks. We have seen seven consecutive sessions of gains. The most overbought since 2015. Shenzhen Mission Engine exchange, which is tech heavy, one of the most overbought at the moment. Isaac it is a different market. It really is not the same as the u. S. Chinese equities still have a very significant retail flavor to them and the big sentiment moves and momentum moves and marginal ending moves that help drive that index higher and into bull territory are a particularly already of the Chinese Market. That does not mean to say the rally cannot continue. It certainly can. We have seen that in the past. But we are going to need to see the chinese Economic Outlook pick up if it is going to consolidate those moves and that can happen. We are going to see for the fiscal stimulus from china. It will be targeted, specific to certain areas. We have seen the Monetary Policy stimulus rather than the central bank and that will be targeted. That will allow the Economic Outlook to catch up to the rally. The risk is that we get a big enough dissidents and a crash like we saw in 2016, for example. Shery exactly, that is where i was going because Retail Investors tend to be fickle. Why arent they more scared we could see a similar scenario to what we saw in 2015 when trillions of dollars were wiped out from the market . Isaac it is exactly right and i think the question is when will the music stop . Will it stop before the economy recovers at the moment . The government and the authorities are behind this bull market rally. They are comfortable allowing it to recover and to support and lead the Economic Growth. The onus is on them to deliver and i think if we do not start to see fiscal stimulus, if we do not start to see more monetary stimulus, if we dont start to see more jobs and activity pick up more rapidly in china, that is when the is connect will happen. We see that and we think this rally can be sustained a little bit further, not at this pace. That is not sustainable. What it does not mean it needs to end in an almighty collapse and correction. It could fizzle out and grind higher along with Global Equities over the medium term. Shery we are pushing for the longest rally in two years or so. Thank you. Oole, still ahead, global virus cases are nearing the 12 million mark. We are live to be see as the u. S. Plans to boost testing. Class, the Hong Kong Security law is already instigating selfcensorship, says a Digital Privacy expert. This is bloomberg. Karina you are watching daybreak asia. I am Karina Mitchell with first word headlines. President trumps economic advisers says the administration has a number of issues with china but insists the phase one trade deal is not dead. Larry kudlow says u. S. Companies should think twice about investing in the mainland because of conceived National Security problems. He says the administration is weighing its problems but says it remains closely engaged in the trade deal. Two of americas most famous colleges are seeking a court order to stop the new visa say itsvard and mit designed to pressure institutions to reopen classrooms for in pursuing tuition despite rising virus levels. The colleges won a temporary restraining order. A top United Nations investigator has condemned u. S. Drone killing of Kassem Solemani in january as unlawful. On u. N. Special rapporteur extra be additional killings found washington failed to provide sufficient evidence that the general posed an immediate threat as claimed. She will present her official report in geneva later on thursday. A land sale in hong kong is boosting the citys slowing Property Market. A plot of industrial land in kowloon sold for more than 720 million u. S. Dollars, twice as much as had been estimated. Mainland moneyy could boost hong kongs Property Market as well as equities. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. The coronavirus has marked another grim milestone in the u. S. With confirmed cases rising 2 in the last day and topping 3 million in total, a quarter of global infections. California reported more than 11,600 new cases, the biggest daily jump so far. The rate of positive cases also rose. For more on the virus, we have michelle cortez. Again, uping a record by 60,000. Is the july 4 holiday playing into this number . Somelle there is potential that we saw a slight decrease in the number of cases because of course people were probably less likely to get tested right around july 4. We had not seen a big decrease in numbers ahead of time and there has not been a really huge surge in the days after so there might have been a slight bump but its not because people were not just getting tested. Its because the number of cases are going up and that is likely to only get worse because it does take a little bit of time for the incubation period and for people to start showing symptoms and get tested so in a week or two, we will probably see cases going up again. Haidi what is the likelihood that we see Elementary Schools, high schools, universities, colleges opening in the fall, and when are we likely to have more guidance on that . Michelle we are not sure at this point how that is going to play out. We are seeing tension between local governors and state officials and the federal government, which of course wants to open universities and Elementary Schools and high schools in order to get everybody back to work. Parents are trying to educate their kids at home. That is a struggle for them. And the of the parent work of a teacher and employee, and we see President Trump is saying universities that do not teach in foreign students, so that is pressuring that as well, but the state officials want to have control. If they are having huge outbreaks, they do not want to be opening schools and putting people at increased risk so we are seeing tension back and forth. We will not get the answer until the end of august or may be the beginning of september. Shery are we still seeing the divergence between sunbelt states that are seeing a spike in cases against some other parts of the country that felt the impact of the coronavirus earlier . Michelle we are seeing the rates continue to rise all across the sunbelt, the south, and we are also seeing increasing numbers in the north as well. New jersey is particularly concerned. Their reproductive member is rising more than one. Every infected person, they are infecting more than one other person. That means the virus is growing. They have been cracking down again. In chicago, minneapolis, idaho, there has not been much of an outbreak. It is unlikely any part of our country is going to be completely safe from this virus. Haidi our health care reporter, michelle cortez, with us. Scientists are arguing over how easy the virus can read through the air. After ruling out airborne transmission, the World Health Organization is not alleging the virus can is acknowledging the virus can be spread that way. Lauren sauer weighed in on that debate. Lauren they are both right. There is a difference between no evidence and evidence that there is not airborne transmission and what we are seeing is that we do not have enough evidence to conclusively say airborne transmission is a major driver. Have someat aerosols element of driving cases, especially in health care setting, and i think what that letter i think was trying to say was that these aerosols may be a bigger driver than what we originally understood, and so, while we are not seeing widespread airborne transmission like in some other viruses, there is a possibility that aerosols are driving more cases than we currently understand. If the virus lingers in the air indoors, it changes everything from School Reopenings to bars and restaurants indoors reopening. Lauren absolutely. The place where we worry the most about these aerosols is a crowded indoor setting with bad ventilation. It is why people are saying that they prefer you to be outside if you are going to congregate, that you want more outdoor space, better ventilation, better airflow, you want to be further apart. And the movement of the air really helps with getting those aerosols out. Not that i would ever think you would darken the door of mary janes at boston university, im sure you did not do that and your friends would not either up at bu, but the kids have to go back to school. Give us some wisdom here of the intractable nature of this from kindergarten up to freshman year at boston university. How do we get the kids back to school . Lauren just yesterday, i think secretary azar said since we do not see many cases of spread in healthcare settings, we can apply those practices to school and get kids back and i think it is just not that easy. I think we need a much more local approach to how we reopen schools. What do the cases look like . What does the spread book like in a local community . Spread look like in a local committee . Do we continue measures to educate people . Do we keep doing online or in places where there is not much spread and we have cases controlled, we can use things like Contact Tracing . Can we put kids and adults back in the classroom . It requires a really local approach. This takes resources. This is an ancient United States thing, for our global audience, the issue of states rights versus federal rights is a third rail across United States history, well over 200 years. How does Johns Hopkins bow be that we should fund the needed funds now that will be utilized in all of eight weeks . Lauren education funds have to be an absolute priority and i think penalizing places because they reopened schools in a different way or because they cannot physically reopen the doors to their schools, alize cornet, and we have to prioritize, especially the children who really, they have to be back in the classroom and we have to look for ways in which we can do that they flee, so Everyone Wants kids to be back. Everybody wants kids to be in an educational setting, but it has to be done safely. It cannot be done unsafely or we will be right back where we started. What should teachers do . We have had a number of tragedies where we lost faculty members at schools, public and private schools. They are of a certain vintage. Did they just not show to teach this year . Lauren i think that older teachers, teachers at higher risk, teachers with multiple comorbidities, they have to have an assessment done with their physician, personal physician. They have to take into account their personal risk and familial risk and then they have to make a decision about what is safe for them. They cannot safely reenter a setting where we do not really understand what the risks are yet. Shery lauren sauer from Johns Hopkins university. The Bloomberg School of Public Health is supported by michael bloomberg, founder of bloomberg lp and bloomberg philanthropy. We will discuss how the virus is affecting business across asia ahead. Aipac chairman and ceo michael joins us for an exclusive interview later. On the, the toll aviation sector, United Airlines, is warning of massive job losses when the payroll support ends. This is bloomberg. Shery in one of the strongest signs of the pandemics impact on airlines, United Airlines is warning 45 of its work force face cuts. Federal payroll aid expires. Su keenan has more on this. This means 36,000 people could lose their jobs. [no audio] haidi all right. We will try and get back to su with the look at u. S. Retail. In the meantime, japanese bankruptcies rebounded in june after falling the most since the 1960s. Sophie kamaruddin is in hong kong with a look at this. Unsurprising that this is the climb where we see that resurgence. Sophie part of this being because of courts reopening and now able to deal with the backlog in cases. The day of reckoning seemingly has arrived for japanese businesses that are failing. The latest tally showed seven hundred 80 filing for bankruptcy in june. That is a 140 8 increase for may and the most number of cases year to date and of that, 94 were pandemic related. Making for a total of 240 for the first half sectors like hotels and restaurants along among the worst hit by the virus. The situation for the struggling companies have been made more complicated by the hold up in government stimulus due to administrative constraints and jumping into the terminal. Firms tapped emergency Credit Facilities and foreign cash, bank loans and deposits have climbed at a record pace in june. Outstanding loans totaled 4. 6 trillion dollars on average in june. That is the highest amount since march of 1999. There is a bit of a Silver Lining to be had in the numbers according to bloomberg economics. When you combine the may and june data, that shows a drop in bankruptcies on a yearly basis thanks to policy support from the government and a boj. Jobr bankruptcies, fewer losses, and potentially less downside for household spending. Bloomberg economics is forecasting a 10 yearly drop when it co