♪ shery: good evening from bloomberg's world headquarters. we are counting down to asia's major market open. i am shery anh. haidi: i'm haidi stroud-watts. welcome to daybreak: australia. the u.s. now has the highest number of virus deaths in the world as talks turn to reopening parts of the economy next month. 20,000 have died. the top oil producers pull off a historic deal to cut global

petroleum output by nearly .1. and the imf and the world bank prepare to meet amid the worst downturn since the 1930's. the new reality of economies, collapsing train and mounting unemployment. shery: let's get you started with the markets. u.s. futures are higher after u.s. stocks posted the biggest weekly gains since 1974. nikkei futures higher half a percent as we had a close-out a two-week high. take a look at crude. we have the historic opec-plus decision, finalizing record cuts of 9.7 million barrels per day, the single largest in history. wti is gaining ground.

mexico alsoafter joined the conversation and agreed to cut 100,000 barrels per day. we will have more coming up. that is right. after several days of the virtual talks, global diplomacy finally ended in a historic deal to cut oil output by nearly .1%. destroyed oil prices. president. great to have you. can we breathe a sigh of relief? >> the cuts that have been announced, if there is adherence to those, and we have additional cups in production from non-opec that was not included in the opec-plus deal, it does reduce the risk of a total price

collapse in crude oil prices and then reduce possibility of dropping below $20. but it will still be difficult times for the oil market as we go forward, because of the slowdown in demand and take a while for that demand to come back. what are the implications for u.s. shale? a lot of investors were saying there is not much point in these expectations from opec when the u.s. will not cut. >> we think that shale production have to be reduced because to face the fact there is not the demand there. you have seen the opec -- the u.s. refining, reduce significantly in response to the slowdown in demand, crude exports drop, coming out of the u.s.. the shale producers will have to

reduce production. we expect further production cuts to happen in the rest of 2020. we see production dropping down to 11 million barrels per day for the u.s. and that further cuts through the next year, down below 10 million barrels per day. when you look at those two years together, cuts around 3 million barrels out of the u.s. and that is what is required for the market and what it will take in terms of getting prices back to more normal levels. shery: taking into account u.s. production and refining, where do we see it going from here? >> as we see, we move in with this deal and if we have further cuts in production and the expectations the u.s. economy may,slowly open in early then we expect demand to pick up refining utilization to pick up and with the cut in production

we see the wti dropping below this timeframe. air -- theof the year we see that widen closer to eight dollars. then into 2021 we expect it to stay around that level through the rest of the year. and we think that differential [indiscernible] keep putting pressure on u.s. producers to reduce production. when we are talking about global demand, what are your requirements given the level this year and what fuels do you see the biggest impact, rather -- whether gasoline or jet fuel? >> all of 2020 see oil -- demand dropping it .5 million barrels per day. -- 8.5 million barrels per day. a lot of that is going to come

from gasoline and it is associated with the u.s. which is the largest gasoline market. a lot of the miles driven in terms of gasoline is discretionary with the slowdown and scotus -- social distancing, we expect a significant amount from gasoline. area that hasher been infected has not been affected by the slowdown in the economy but -- that will be another. dropping, notso to the same extent. gasoline, jet fuel and then diesel in terms of percentage drop over the next year and a half. much is a quicker than expected recovery in china really kind of changing your outlook, and does it on the demand side?

with what has happened in terms of the supply cuts and what we are starting to see, better news out of the u.s. and what we are starting to see in europe and also the return in china, we have increased our outlook for crude oil prices. droppedrude oil prices significantly, brent down to $22. we have seen that improved. .hat will help that coming back has helped. we have increased outlook for crude prices somewhat, but we see they will struggle to break above the $20 and stay there. it will take time for supply and demand to rebalance again and , to get past the huge surplus of supply and inventory that is being built up. u.s. stockpiles

remain elevated, so much relief do you think this deal will create and doesn't give that much expectation -- does it give that much with the expectation of mounting bankruptcies? >> it helps stabilize it somewhat. it will not take away the reality we have had the significant drop in demand. a lot of that drop in demand is going to impact the outlook for prices and what it means from the financial standpoint from the shale players. they are going to have to reduce production. that is a fact, because there is not going to be the demand or the market for that and also financially they are doing poorly. there will be more bankruptcies.

it is a fact the shale industry is going to continue to feel pain. that is what it takes to get through the next 18 months. we are hearing the international agency -- energy agency will come out with a plan to reduce -- to boost the strategic reserves. how much of this taking advantage of cheaper crude prices? >> in the margin it will help. there is additional demand that can be associated with buying for strategic reserves but i don't think it will have a dramatic impact on overall prices. in comparison to the demand, but it will help some. it is better than emptying the strategic reserves. shery: shery: one of the reasons

this deal happened is because mexico agreed to cut 100,000 barrels a day. this is after an additional offer of 400,000 that mexico balked at. would you say it was a diplomatic winner overall? >> i think probably. it would show he stood up, the mexican president stood up for ,exico and the idea that oil mexican oil is controlled by the mexican people. that does help him, to show he stood up and did not cave to the cuts being imposed on him. from that standpoint, he could see that as a victory. we are starting to see oil weaken amid the pop we

saw. is this an indication of how the markets feel in terms of the longer-term substantial impact of this deal, that clearly there is more focused on the demand destruction rather than supply curves? >> yes. these are not enough to balance the market. it helps reduce the possibility of a further collapse in prices, but it will take time to get demand to come back. so the market expected i think this deal to come through. we expected it even though there were some pickups. we expected there to be a deal. the cuts don't come until may so there is concern about compliance. it does help. i don't see market only going to see this meeting that now we will start moving strongly -- meaning that now we will start

moving up on oil prices. it will still be fairly low and take a while to break above $40. until next year. shery: thank you for your thoughts on the oil market status. with our nextore guests, and global head of market analytics guy wolf joins us later. a medley of global advisors directing why he thinks it makes -- it is time to get back into risk as markets tiptoe back from easter. this is bloomberg. ♪

-- i: >> you are watching daybreak australia. the u.s. enters a new week with the highest number of coronavirus deaths in the world,

but the administration still hoping to open in may. the top white house viruses said levels are stabilizing and the u.s. could open in the next month. the euro went higher in asian trade as coronavirus numbers across -- italy had the fewest cases in weeks and france recorded its most rising deaths in four days. spain is seeing a slowdown and the government is looking for ways to ease nationwide lockdowns that have crippled economies. the eurozone is likely to see a and theere recession rest of the world and may not recover until next year. the vice president said prospects are deteriorating across the european union as governments extend lockdown with

the french economy contracting 6% in the first quarter and germany put at 10%. indonesia is tightening restrictions on cities around 4000.a as infections top the philippines is ready to act to support the economy and what saysgovernor of the banks is a once-in-a-lifetime crisis. myanmar has halted plans to open its stock market. the virus has seen -- 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 corrina mitchell. over to you. private equity giant stalwart capital is funding opportunities to buy at the moment. this despite the pandemic. the chairman and ceo says stalwart has started buying

commercial mortgage-backed securities and equities. he told us where else he is looking at. i was pretty bullish. i thought this is a fluke, this is going to pass -- flu, this is going to pass. i think the government is on the way with overstimulating which means we will have trillions of dollars of new quantitative easing or paper printing. there are long-term benefits to what has taken place. you got lower mortgage rates, and that will be a tax cut to the consumer. now you have the oil price which is giving people a tax cut in the form of lower energy bills. i was optimistic and people thought i was nuts about new innovations in the medical space that would come with a way to

help people with the disease, and every day i read about another drug, condition, a way to help people that have contracted this. [speaking simultaneously] new -- no.the i still believe all of those things are true. i don't know how to think about the trillions of dollars that will come into the economy and have to sort of go out. i think the slope of the recovery, the market may be ahead of itself. the prior interview, the woman was right. goldman sachs, i think the manufacturing sectors will come back. we are all encouraged a china's recovery. if you look at the real economy, the restaurants, the shopping centers, the hotels in china, hotels are running 30% occupancy . people are not traveling, not going to the restaurants, the

malls. it will be slower here, depending on what happens on the medical front. all clear,verybody no one dying, americans will pick up steam dramatically. these first two quarters or this quarter will be on this. the markets are looking through it and saying it doesn't matter much. there are sectors of the market but have rallied so far -- that have rallied so hard. it seems inappropriate because to me the economy is damaged enough they were not at cyclical highs. i think certain sectors, and you are seeing it with microsoft or even amazon, which are not really responding. it is a shredded stock that was impacted by this that has been recovering the hardest, like our company which we announced over $800 million in cash twice and

we still got caught. that was the functioning of the market's mechanics. it is dominated by etf, estranged -- the exchange traded funds, mortgage and entire characteristics of the company. the baby got swept out with the bathwater. some people had challenges. you had country selling in distressed situations with bid live. we never had that situation. we never put anything up for sale. we were planning on 800 million in cash. they took our stock down like we were going out of business tomorrow. >> what have you bought? >> commercial mortgage-backed securities, not facilities, and our equity business. we are looking at, we have made offers to buy hotels from

distressed sellers, and we have not seen -- a lot of stuff has traded, but we backed away and now we are engaging with these people about, we can't i anything and nobody can until the debt market is stabilized. take a look at oil. we are seeing oil reversing earlier gains despite the fact we have the historic agreement with opec-plus agreeing to cut production by .7 million barrels per day. -- 9.7 million barrels per day. investors don't think that will be enough, this despite the fact this was the single largest output cut in history. we are seeing brent down .3% after surging 8% in london. futures reversing earlier gains and producing 1.5% after stocks

posted the biggest weekly gain since 1974. this is bloomberg. ♪

the challenge of easing restrictions imposed to curb the spread of the coronavirus have fallen in china. beijing announced plans to reopen schools even as quarantine measures are tightened your the russian border after a search in import in imported cases. give us more on this approach in china. tom: what we are seeing in this city you the border with russia is a tightening of the rules -- near the border with russia is a tightening of the rules. they are extending the quarantine up to 28 days, 14 days in quarantined at a designated location and then

more at home. people from over seas have to take nuclear tests and antibody tests. there are more than 100 imported cases from russia. challenges facing officials in that province. the russian issue, chinese traveling from russia who have infections, you some more than half of the coronavirus infections reported by china on sunday came from a single russian flight to shanghai, which arrived on april 10. those were reported on sunday. you saw 51 out of 52 cases reported in shanghai by chinese nationals who landed in the city from that russian flight. that is a key challenge. beijing, weed to in

are continuing to edge towards some normalcy. we saw that with the announcement that senior ondents can return to school april 27 and grades will be able to return -- we are getting word on primary and kindergarten. but they are trying to get to a place where they can open schools again. -- y: haidi: now that we are sort of zachthe throes of the ago -- the epidemic, could they undo the struck deal of the trade deal? tom: this is the concern. it is inconceivable you could get the full thrust of phase one done, given the strength of the pandemic and the damage it is

having across the economy. we heard from china's ambassador to the u.s., he was speaking to the eurasia group's ian bremmer, china is still committed. the deal includes buying and theyral products, are continuing to remove restrictions on foreign companies in the domestic financial market. we saw that with financial players able to increase ownership camps in the last few weeks. that was the ambassador to the u.s. saying it is still being implemented by the chinese. mackenzie in beijing. let's get you a check of business flash headlines. if as we watch what is going on in oil markets. kia motors is suspending production of three plants in south korea as the coronavirus

slashes demand for cars. two of the factories are closed and the other 300 kilometers to the south. upcomingiscuss the earnings season, what that could look like. because you can't get to the theater, we're bringing

the theater home to you, with xfinity movie premiere. there's a world full of other trolls. how different can they be? our brand-new service that lets you watch all the latest movie releases from the comfort of home. trolls world tour available now. i will protect you no matter what, pinky promise. just say xfinity movie premiere into your voice remote to bring the theater to you.

mitchell.rina the imf and the world bank older spring meetings this week using digital remote software as the virus rules out face-to-face talks. global partners -- global lenders will face shuttering trade and mounting on employment. the world economy is suffering its worst recession since the 1930's with upcoming data set to reinforce the gloom. the oil price war is on hold with top producers agreeing on a deal to further restrict output. days of talks in bilateral phone calls ended with opec and its slashs agreeing to

production. mexico held out that u.s. lly bolstered agreement. senior government officials in hong kong are facing a cut in pay with the money going to charity and to top off the administration's cash reserves. carrie lam announced a worth almost $18 billion u.s. to support the economy. this accounts for 10% of the gdp and double its projected budget deficit. india is set to extend its 21 day nationwide locked down to allow more time to evaluate the spread of the infection. narendra modi said the government has adequate supplies and protective gear for frontline workers, think the next four weeks will be critical. he describe the virus as a

social emergency. 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. this is bloomberg. a look at's take markets. we are seeing the turnaround to the downside with sentiment. future showing weakness after what was the best week for u.s. stocks since 1974. this on account of the historic deal we did get from opec. we are seeing the initial pop when it comes to training and crude starting to revert. there are concerns as goldman sachs said, this is a historic but at the end of the day insufficient cut because fairly -- clearly investors are focusing on the demand side. shery: the market is susceptible on coronavirus headlines. there is chaos across the globe.

they may also wreak havoc on the upcoming earnings season. yardsticks areal rendered meaningless. joining us is a managing director. we are talking about revenue growth, cash flow debt, all of meaningless atly this point if you don't have any vision of what is going to happen in the next week or the next few weeks. what should investors be watching when these companies come out, and guidance over the next few months? >> i think what investors should be watching is [indiscernible] in the economy. there is major destruction taking place, and what is ahead of us in may if the economy were to be open? there is a difference between the data in the u.s. and europe, where the collapse of the data

will be sharp as in the case of china this week, the production gdp data may see for the recovery. the latter is relevant for the idea that if the u.s. and europe are planning to reopen by may, we can anticipate by then the recovery of this collapsing data. the earnings data at this point is not really relevant. shery: it very much depends on whether or not we can get a control over this ongoing public health crisis. at the same time we are seeing the fed trying to help, some liquidity assets, purchase programs. how much will this help investors and insulate them from the economic chaos we could see as these lockouts continue? >> that is a good point. what the set -- the fed and

central banks are doing is trying to provide a bridge and hopefully stay open. in the case of the federal reserve last week, significance was the payment protection program, the main street lending, those really effectively -- affect the economy. if they do it right, despite all of the challenges we are facing, builtcould be some basis in the economy over time as these programs get further and further support. that is relevant. at the same time you think of quantitative easing, that is not functioning we are used to. it is to support markets functioning and less to do with economic fundamentals and more to try to support and fund the government to provide stimulus to people on the ground that really needed. -- need it. wanted to get more into

what sherry was talking about which is you have got 10% of s&p that has pulled guidance. we have got a nice graphic that shows clearly as you would expect consumer discretionary has been hardest hit. that doesn't count the number of actually delayed guidance into the unforgivable future. you still have most wall street firms sticking to the year forecast. the majority looking at a 15% rally from the levels we are here now. how much credibility do you put into these forecasts? are the useful and if not, what is guiding you? the guidance is challenged because the earnings picture doesn't have any fundamental backdrop because we shut off the economy and we also shut off basically the visibility of generating profits. at the same time there is a group of companies that are doing well in this environment.

there is a group of pharmaceutical technology, defense and others doing well because there is demand for their services given the nature of this crisis. those companies will be able to provide guidance because sales and earnings. the market is making a distinction that if you take that basket of companies that benefit from the virus so to speak, they are performing better than those who are not. that may be the only guidance we can get what is happening. further out i would presume once the economy has the ability to stay open, which is key, the guidance gets clearer because we will get more data on the ground because ultimately if you turn on the economy, there will be a short -- sharp short-term recovery. it will be reflected in the futures. haidi: what happens if the

economy world -- opens prematurely? is it detrimental? risk.is a we can't exclude the possibility that we open and after a number of weeks or months, it becomes clear it was a mistake because the infection is so unpredictable, and there are plenty of examples we have had like in florida making decisions of spring break and other areas where the oh break happens because the -- outbreak happens because people thought they had a normal environment again. decisions a calculated . it was one i think of via signals of the administration of vice president pence laying out the conditions on how to reopen. we have to have adequate testing, need to be assured the flattening of the curve remains really consistent.

the latter part is where the challenge is. i think what the markets are looking at, it is what we call forward guidance. it will be depending upon scientific decisions which will take place around april 30. that will likely be about something the reopening cannot happen until much later in may or june. shery: neel kashkari saying the u.s. could face 18 months of rolling shutdowns. my question would be if we see a second wave, third wave of infections, with that have sort of a similar level of market impacts, as the first outbreak, or will the markets become desensitized? desensitizednot be , but i think the second wave impact may be somewhat smaller. we have a tremendous amount of

market stimulus already in the system. that is one reason. the other reason is because of the defense production act the president invoked, there is a fair amount of ramp up of medical production which will prepare us for the second wave. i think we will carefully listen to dr. fauci. the market will think it is unfortunate we get a second wave which sets us back. once you get through it, there will be new expectations on anticipating the following the recovery. the second and third waves will not be as stressful and impactful as the first, not to mention the first wave was the unfortunate timing of the oil price war which has been resolved. to go over some of the latest measures by the fed, one that caught our eye is they are .uying junk-bond etf's

this could be a slippery slope. if you are buying that, why not leverage loans? this could get closer to the fed picking winners and losers in the financial markets. what are your thoughts? >> they have made a bit of a distinction between the cut off date of march 22, those countries downgraded after that date will be eligible for this updated program. and the high yields of the etf is included. there is some of that, you have differences between companies will not be able to be eligible to be purchased and that could affect their performance and also the performance of the securities of those companies. i don't think any of the other central banks have that in mind to create winners and losers. it comes down to restoring flow of credit. as we go from here, will those

programs once again be amended? they see limited flow of credit in certain parts. as i listened closely to powell on friday, he mentioned the cutsal reserve was open to needed. we will see the winners and losers in relative performance differences between these credit it cuts but ultimately to more stress and destruction taken to stop that. haidi: always great having you with us are admittedly portfolio managers, thank you for joining us. you can get a roundup of the stories you need to know in today's edition of daybreak rate you can go to dayb on your terminals, also on the mobile in the anywhere app. you can customize those settings so you just get news on

industries and assets you care about. this is bloomberg. ♪

appointustralia will march numbers this week and the rate is likely to be quite significant front employment. we are seeing these numbers are you out of the australia

treasury keep things playing out? paul: he hesitated to put a number on it but said it would be an uptick in on employment and went on to say the restrictions in place in australia are likely to stay on for six months or more. it is dangerous to move ahead of the medical advice. there will be a big hit to the jobs market. we get those numbers on thursday. a quick nudge 10%, a huge jump up from february. this is with shops and cafes shot and people for load. it could have been worse had -- people fo -- of course the cost of that, the question now turning to tax reform and how to ease out of this whole system. the treasurer says there are no plans around that just now. shery: let's talk about one

sector that is suffering, airlines, as anywhere else. can the sector main competitive after the virus threat eases? paul: the government hopes so. the deputy prime minister was saying on the weekend he wants the airline sector to keep things repetitive. qantas and virgin australia have grounded flights, for load -- furloughed workers. people are appealing for a handout of three times the amount. but it has been crippling for the airlines. the whole country is for going revenue from domestic travel and it could be the end of the word -- the year before the overseas travel ban gets lifted. we will have to wait and see

what sort of shape the airline sector is in when all of this eventually comes to an end. much forank you very that. we will have more on daybreak australia next. ♪

zoom has become a household name in the midst of the pandemic and now been dogged

by security issues and zoombombing, when meetings are hijacked. we spoke to bloomberg -- the ceo spoke to bloomberg about its growth and the changes they are making. >> zoom was beautiful, serving people before this crisis. and you know we learned for the first time in the consumer -- we should do more, not only for the service but also give them security and tools like make the password. we took actions over the past several weeks. knows -- int to get want to know what it is like when you go from 10 million to 200 million users in a matter of weeks. talk to us what that has been like, weddings and funerals and schools and families as of last night celebrating passover. >> is really hard.

we are working -- it is really hard. we are working but the hard. every day look at capacity traffic, how to add more capacity and make sure that the service works. it is really challenging, not easy. also the cost and all employees working so hard. also we had to do with all of , the prhe privacy issues. it is not that easy. emily: you have been banned by school districts including new york, governments of taiwan and germany for official use, google as well as their competing product. how many people are you losing as a result? alreadybly most of them -- we are still in the process,

working together with new york education.ment of we have so many public schools working together with us. we would like to manage -- they have i.t. teams. we have seen this. there are some new guidelines with information. [indiscernible] future,he [indiscernible] make the change. we do all we can to focus on business, education, safety is important for us. i think that [indiscernible] emily: what are the true facts? >> zoom is secure. it is safe. those zoombombing, we took action, fixed the problems.

education, they wanted fixed. also for the very limited time -- because we have global distributing architecture. we see a limited -- some meetings are very random. [indiscernible] this is very minor and also random. [indiscernible] customer,w which which account, which attend the had a problem. we have all of this information. i don't think that is fair to us. so we are working on that. emily: there are various attorneys general examining the service. you have got warnings from the fbi. you have been sued by a shareholder for concealing the now of encryption and senator elizabeth warren is

concerned about kids. what is your response to all of this? goal.share the same we want everyone can run a class, everything without any problems. any -- we do include our content, the same as any other competitors. we use encryption. because internal process, since last august we already changed our meeting -- .o improve it however because the internal process was still a startup company and some materials [indiscernible] i think that is really not right. it is more like inconsistency. we know it is intricate.

emily: have any formal investigations been launched that you know of? >> i do not know. emily: let's talk about encryption because you have done a product screen focusing all of your engineering resources on security and privacy for the foreseeable future. what is the timeline for true end to end encryption that meets the standard? >> we have been using this for more than 20 years. today,k at webex [indiscernible] microsoft also same thing. the conferencing, with the ignition -- meeting, might get a phone call to dial in. i think the way for us [indiscernible]

we've also been to like a customer as well. that is why they are doing that. i don't think anyone at this moment or for the -- i mean any google or -- i don't think now they offer true end to end encryption. isly: you think your product safer than google and microsoft? >> no. i think it is the industry standard. we use the to figure fixed ecb. -- it isligated to industry standard. hired formerently chief security officer at facebook. i am curious, he is working for you as an advisor, what is he

telling you? -- they are all working together with us. they liked our product and that it is trustable and offered to help you he is going to spend more time working together with us and review the process because before this crisis, [indiscernible] suddenly so many users. essentially this kind of work should have been done maybe in three years. invest more. we never thought of this. a lot of process, look at the security, internal process, it is probably true. but happening overnight, this is the problem. shery: resume ceo there. ceo there.

we have singled and sex saying the opec is deal is historic but -- seen goldman sachs saying the opec deal is historic but insufficient. this is bloomberg. ♪

shery: welcome to daybreak asia. i'm shery anh in new york. haidi: i am haidi stroud-watts. we are continue down to asia's major market open. opec and its allies finally but his new oil curves, crew giving updates as investors fear the deal will result in glut? the u.s. has the highest number of virus deaths in the world as talk turns to