shery: good evening. i am shery ahn in new york with haidi stroud-watts in sydney. we are counting down to the market opens in australia and japan. welcome to "daybreak asia." rise afters set to wall street rallies to a seven-week high. strong tech results put the nasdaq on track to erase 2020 losses. president trump sees light at the end of the virus tunnel. a project aims to cut the time it takes to develop a vaccine.

jerome powell talks of heartbreaking harm from the coronavirus and says the pandemic has brought the u.s. to an abrupt halt. we are seeing optimism with asian stocks really prized to follow the leader when it comes to gains on wall street overnight. the s&p 500 gaining 2.5 percent, touching a seven-week high as we have the dual optimism over -- expected track to a vaccine with the so-called operation work speed from the trump administration. more encouraging news about efficacy on a gilead sciences therapeutic as well. we are taking a look at gains resuming in new zealand. japanese futures pointed up after yesterday's public holiday. u.s. futures also showing an extension of those public gains. on seeing futures looking positive as well. korea closed today and hong kong markets closed for the birthday holiday. taking a look at oil because we

are seeing a second day of gains for wti up, the 22% plus gain in the overnight session. we are seeing opening up here higher by over 6% in asia. this sort of sense of a recovery while producers curve output and we are seeing demand perhaps starting to see a recovery as we get closer to an economic reopening in some parts of the world. operation's discuss warp speed. the trump administration's plan hopes to drastically cut the time it takes to develop a coronavirus vaccine and that comes as a drug from gilead is showing promising results in clinical trials. our bloomberg opinion columnist, max neeson, joins us on the phone right now. great to have you with us. despite what you might call it, operation, is it historically feasible to really be able to develop a vaccine by year's end? you know, going on based

what we know historically, it would be unlikely beget a vaccine even by the end of 2021. vaccine timelines are traditionally long, and they are long for a reason. it is not something that you can really skimp on safety testing, because ideally, it is something you give to a whole population. there are other things you can do to speed that up, and companies are working very hard to make that happen and then the trump administration stepping in with certain efforts that might aid it. at the end of the day, the only thing that can truly, you know, get the vaccine to market speedily is the vaccine actually be working, being effective and safe, and that is enough to -- that is up to human biology. it is not something that the trump administration can really directly and sure works come -- ensure works, so the timeline will always be a little risky. haidi: are you cautiously

optimistic on the therapeutic side? anthony found she seemed to think there is early data we saw in the gilead sciences treatment which was encouraging. i am more optimistic than i was yesterday that we have at least one tool that might be useful for certain patients. that arease, people hospitalized and have a chance of getting not much worse. this is not the silver bullet treatment we are all hoping for that has widespread utility and can broadly bend the curve of outcomes for the virus. this is something that has -- has shown convincingly, in a relatively large study, although we still need more data on it, that it has not impacted a certain group of patients. it is a drug that has to be infused over time, usually in a hospital, and it is difficult to make, so in terms of being able

to genuinely change the trajectory of outbreaks or encourage people to return to economic activity, i am not sure that this medicine is going to be that answer, but over time, we will get more data on other drugs. in addition to the work on vaccines, there is ongoing work on antibodies targeted directly to the virus which have a chance of being more effective so we will see what happens going forward, but this is at least of some utility, likely, given the data we have so far. shery: when it comes to reopening the economy, many are counting on antibody testing to help make that decision. how much research have you seen out there on whether or not there's coronavirus antibody actually means immunity? max: that is something we are only in the early stages of understanding, unfortunately. in order to genuinely establish that an antibody test confers --

at least testing positive, it means you are immune. we will have to give a lot of people those tests and follow them for months just because what we know is it is pretty limited. we are kind of drawing limited comparisons based on other coronavirus is that previously circulated and on limited animal data. we do not know that much. it could be that it will last for years. it could be that it varies by infection. it could be that it peters out within a year, like you see with the common coronavirus that causes many mild respiratory illnesses. we really just do not know and it will take further study. max neeson from bloomberg opinion there with us. still ahead, tesla surged in late trade after beating estimates, but will it face speed bumps ahead? we will get more analysis later on in the show. we will be joined by patricia. she spent two decades at the new york fed overseeing monetary

policy implementation, including crisis related facilities. this is bloomberg. ♪

karina: you are watching "daybreak asia." i am karina mitchell at the first word headlines. germany sees the pandemic pushing the economy to its worst recession since world war ii as business and household confidence collapses across europe. adp is forecast to fall by more than 6%, more than in the financial crisis, with a low point expected sometime in the second quarter. the government hopes its rescue pam it -- package helps limit the damage. japan's prefectures are set to ask the government to extend the state of emergency as coronavirus cases continue to rise. a representative said the situation remains severe. unemployment cases were surging in south korea is 9 million people registering for aid in

indonesia. the labor market with its sharpest contraction since sars in singapore. jay powell says the coronavirus has brought the economy to an abrupt halt. up thetalked heartbreaking harm the pandemic has caused and said activity will likely fall at an unprecedented rate in the coming months. he said there may be a need for more fed action to support the recovery. 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. shery. staying with the fed. how much more can the central bank do with rates near zero and unprecedented credit facility? patricia mosser is head of economic policy management. she served for two decades at the new york federal reserve.

we are seeing markets and monetary policy implementation including crisis related facilities. great to have you with us. thank you very much for your time. the question would be, does the fed even need to do more at this point? we know the bulk of the amending facilities are not even operational, so once they all become operational, will that be enough to support the economy or do you foresee more things that the federal need to do? patricia: thank you very much for having me. it is my pleasure to be with you. i think probably they will have to do more. as a powell described it sort of stop. i described the economy as stepping off a cliff. we don't know how far that cliff is down. and i would certainly agree with chair powell that both fiscal and monetary stimulus -- more may be needed.

maybe stimulus is the wrong word. perhaps a better description is disaster relief because that is what we are looking to right now. when it comes to supporting these different sectors of the economy, we have seen the fed really getting into the municipal market, not to mention high-yield. corporate credit markets as well. there has been criticism that the fed has moved out of its policy lane. what is your assessment? patricia: it is extraordinary. atypical for a central bank to be doing this, but it is extremely clear that in this kind of extraordinary circumstance, this sort of coordination between the fiscal authority and central-bank, it is a smart coordination. i think it is very clear, the mandate from congress that they effectively gave the treasury

department $450 billion to backstop particularly risky lending the fed could do. it is a direct acknowledgment of that. it makes a lot of sense, although certainly, central banks either in the credit market or municipal market deciding who is going to get credit on what terms is a very unnatural position for them to be in. we were speaking to a guest in the last hour, talking about how unsuited the fed's tools or any central banks tools are with the crisis that is playing out more painfully on main than on wall street. in that way, i guess, what more can they do? they are trying to figure out a way of transmission to get the money to the parts of the economy, to the parts of america that are hurting the most. patricia: absolutely. the degree of complexity is

obvious. the delay in the credit programs, particularly the main street lending facility and the municipal facility is a reflection of that complexity. i saw in the press conference, it was interesting today that chair powell basically said the main street facilities are probably going to be later than the corporate bond facilities. might roll them out in stages, and i think that is an acknowledgment of the complexity. we have already seen a taste of the complexity just in the ppp program. it is very difficult to figure out what demand is, what the right terms are, and that is not a monetary policy. that is purely a fiscal program. some way to figure out how to provide rich financing to businesses, to households, to keep incomes at least stable enough for long enough to ride through the sharp

decline we are going through now , it is an incredibly important goal for both fiscal policy makers and for the fed. i did find one last comment. i did find it interesting that alluded to fiscal policy a lot more than a typical fed chair does during a monetary policy press conference. but explicitly saying that there are certain things that the central bank is just not going to be able to do well. they cannot specifically give transfer payments. they cannot do those things. fiscal side is bigger, in my personal opinion, and can be much more targeted in a way that a central bank, and certainly monetary policy tools, can ever be. as we talked about, fed

chair powell spoke about this idea. this is not the time to worry about overspending and this is a sentiment we will hear from governments. we are doing whatever it takes, and even then, it might not be enough. use programs being scaled up and up again. at what point do we need to worry about the structural issues that this is creating for the u.s. economy and the balance sheet? completely agree that as far as the united states is concerned, that the last thing you want to worry about is the deficit. if the economy recovers, if you come out of this with strong growth and employment in jobs and businesses that are healthy, that tax revenue, the grants will go away. the extra tax revenue will come back, and then you sit down and figure out how to make the fiscal situation in the united states sustainable over a longer period of time. you don't worry about that right now. there are many other countries in the world that really do have

to worry about this to a much greater degree than the united states has, but i agree completely that right now, that is not your first order of business. structurally, i think the question is how much of this does one want on the central bank balance sheet versus how much is going to be on the fiscal side of the ledger? given inflation has not been a problem in the united states, or frankly, very few places in the world has it been, i am not worried about that part of the equation in the short run, but the short run here is also defined as this does not go on for five years but it goes on for a fixed amount of time until the economy can bridge to the other side of this. the problem with not -- here is the alternative. the problem with not doing that is that you end up with a much weaker economy in much worse shape and then the fiscal

situation, not to mention the monetary policy situation, is just as bad if not worse than it would have been if you were aggressive upfront. there is definitely more now. hopefully with a better outcome, and then you have to do this later. fed nowe have seen the lending directly to big companies but they have not really put any restrictions when it comes to dividend or ceo pay. we have seen from the fiscal side of things that they have started helping out those small businesses but because of some loopholes, big corporations have also been able to tap into those funds. should there be more restrictions on how all of these funds are being dispersed, whether it is coming from the fed or from the u.s. government? patricia: putting on , if these were private lending relationships, it's common for small firms unless, and for large firms, and

right now, that is approximately -- not the ppp program. let me put that aside for a moment. essentially ais grants program and not a lending program, but the federal reserve program will definitely be lending programs. they are expected to pay back the loans, and so, a set of restrictions on behavior for smaller companies are common, not for larger companies. i think the question will come down to is the equitable distribution given the other restrictions that are in the cares act, even for aid, and this is fiscal aid, to larger clients. i don't know how this will play out but one could certainly make the fairness argument, although right now, the way the program is written, there is absolutely a difference. i think it is clearly up to the fed and perhaps congress if they want to change the rules of the game with respect to legislation

, to figure out how they want to do that. haidi: thank you so much for joining us, patricia mosser, director of the program in economic policy management at columbia university. we do have these lines crossing the bloomberg when it comes to what lies ahead for the u.k.'s reopening plan, and we are hearing from the prime minister, to u.k. p.m. is reportedly tell the nation not to expect any changes to the lockdown according to the telegraph newspaper. it's interesting because we have kind of heard this sentiment before. boris johnson expected to warn the nation to manage these expectations, if you will, not to expect major changes to the lockdown after it emerged burton has had one of the worlds worst death rates when it comes to the coronavirus. the pm is reportedly going to use his first downing street press conference since his return to work since recovering

himself from covid-19 to explain why these social restrictions must largely remain in place, so we will be expecting that address from boris johnson a little bit later. it's more to on daybreak asia. this is bloomberg. ♪

haidi: we will be watching and said shares at the open in sydney, trading up the vendor reported a plunge in first-half profit. let's get more from emily in sydney. for aussie lenders continues. emily: it is certainly a change from years ago when we were talking about these great moneymaking machines. australia are really at the forefront of, you know, the initial wave of the coronavirus

economic impact. you know, the drivers behind is a hugepoor result, rise of impairment, generally with the bank is kind of, at this stage, not looking at individual loans so much as they are looking at the expect expectations and doing a broad economic overlay of the damage they think this virus will cause. the bank deciding to defer the dividend. how does that reflect their financial position? emily: they feel very clear to say it is not a reflection of their capital position. what they are saying is that this is just such a huge economic unknown at the moment that they just do not think it is prudent to pay money out to shareholders at this time. that is something that will be welcomed by the authorities.

lenders to be cautious on what is going forward. until we noticed how bad it is, you don't want money going out to shareholders and want them leaving the bank in a difficult position down the line. what anz make clear is right now, it is not a cancellation. they will review the situation and get an update to the market in august. it comes to credit losses, when are we going to have a better idea of how it is impacting the australian banks? to thewhen we spoke national australia bank ceo couple days ago, i think what he made clear is the pictures are really going to become clear once the payment holidays at the banks are granted. as a quick recap, the australian banks are allowing business and mortgage holders to make -- take

a six-month payment holiday. they will start to get a real picture in the new world. we are talking five months to six months before we really start to get more. patricia mosser -- emily, thank you so much for that. latest business flash headlines. standard chartered has set aside almost $1 billion for potential losses because of the coronavirus, even as the trading boomlet for first quarter revenue. they reported that biggest provision for five years as clients across asia, africa, and the middle east sought trouble. first quarter earnings slid 12% to 1.2 billion dollars while operating income rose 13%. swung to a loss in the first quarter as the collapse in oil demand hit refining and prices collapsed.

asia's biggest refiner reported a net loss of $2.7 billion compared to a profit of just over $2 billion the year before. the first tos were shout facilities because of the coronavirus as demand for everything from aviation fuel to gasoline took a massive hit. expects march deals to fall by up to 55%, contributing to an overall sales decline of 26% for a softst quarter in exchange filing. it said first quarter earnings before tax are expected to be slightly positive but significantly lower. that of course follows lockdowns and travel restrictions around the world because of the coronavirus. up next, we will talk to sandhill strategy co-founder katie baines about her outlook for the energy sector. this is bloomberg. ♪ staying connected your way is easier than ever.

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we've always believed in the power of working together. that's why, when every connection counts... you can count on us. haidi: you are watching daybreak asia. let's get a quick check on how markets are trading. we are seeing u.s. futures gaining ground with wall street seeing stocks jumping to a seven week high. we had muted market reaction to the feds decision broadly in line with estimates but more optimism about a potential drug for coronavirus. we have japan futures also gaining ground at the moment, rising 1%. we have seen strength in the japanese yen, which has gained for the past six sessions. we did get march industrial production and retail sales numbers and just a few minutes so watch out for that. and it comes to qb stops gaining

ground for a sixth consecutive session, this is the best-performing market across asia since the selloff we saw last month. we are looking at surprising strength for the kiwi dollar. surprising strength for the kiwi dollar, aussie dollar, against the u.s. dollar. those currencies linked to china which is easing lockdown measures and we are seeing a little bit of recovery instability when it comes to their economy. wti continues to add to those gains. about $15 a barrel. haidi. let's check with oil. joining us out of washington is the cofounder, katie. great to have you and thank you for joining us. strongseeing this really rebound. has anything meaningfully changed? we know producers are scrambling to curb output. is there a sense of global glut is may starting to bottom out? >> it is so great to be here. it's a little hard to imagine we

are celebrating over 15 dollar crude oil, but it does feel good to see crude in the green for the last couple of sessions. drivers, kind of like you were just saying, there is optimism about therapies for coronavirus that may be a more rapid return to work than we might have been anticipating. that is good for energy markets, and to your point, it believed that we are starting to see supply reductions, especially out of the united dates. that was the big x factor. as much as one million barrels a day might be coming off line in the near future, maybe the next couple of months, but that is still a very positive sign. we are starting to see refinery processing see a recovery as well. how much of this will be down to whether we see this resumption to normal, resumption to traffic

in fuel consumption and demand be sustained and scaled up out of china? katie: absolutely. i have seen estimates that show refinery rates may be currently in the 50% ballpark territory depending upon where you are 70%, may bening to a normal run rate by the fall, and those estimates are extremely bullish but very constructive for crude oil demand, and all of that comes back to this issue of when our folks more or less going to get back to normal? china is a strong indicator, and we had the chinese majors ,eporting in the last day or so and they have really given a tentative forecast for q2, but looking at a more optimistic to three and q4, and refinery runs are turning into a bright spot because, obviously, with prices so low, that is a great

opportunity for refiners. haidi: we have seen cap that cuts announced by these majors but they have not compared to their global peers, have they? katie: no, they have not. that is a good point. it is remarkable and very interesting. we have seen u.s. crude signal that we are going to cut capex and we should read through from that capex cut to a big cut in production. for the chinese majors, we are seeing a 2% to 5% cut in capex. more complicated to really cut, but i think it's also a signal that, you know, china is doing something that we saw the u.s. do in the 1980's after the energy crisis in the late 1970's. to really turn inward and look inward at domestic production and look at your own sources of supply rather than being dependent upon what can be a

really fragile global supply system. that is a big lesson we learned in the last 10 weeks, really important lesson, and when i think we should all be cautious about when it comes to china and are a long-term modeling. will china be the big importer that we see today in three or four or five years from now. shery: does that mean china could be added to the glut in just a few years? katie: exactly. we have seen china importing 10 million barrels a day in the present environment, but the enormous amount of crude oil in if we see the chinese majors in a couple of years or six months to a year starting to increase again as the world stabilizes and focus on trying to bring down chinese to $60 a barrel, not as competitive with

west texas crude. desireds shale and to develop that shale. bc resources getting new major investment. that is a signal i think that china is really focusing on upping domestic production. i think we should all be looking plan, which isr china's sort of economy wide outlook coming out we think later this year. that is a big signal of where future chinese investment will be focused for the majors. haidi: when you look at the demise of u.s. shale, does this really changed the landscape geopolitically when it comes to oil dominance in the world? katie: one of the most important lessons for folks in the investment community and folks in the policy community as well, we spent a lot of our time, take away from this period of time,

is today's shale crash and oil price crash is not the same crash we had in 2016. this is a really unique set of circumstances. capital markets in the u.s. have become fatigued with crude oil. at do not see crude trading $16 because this is a promising area for future investment. investors are genuinely cautious newt making future investments in shale. what does that mean? this is ultimately likely an opportunity for the majors more than the independent producers. this is an opportunity to pick up acreage more cheaply and reserve more cheaply because of capital is not available here in the u.s., there is not much runway available for them. a lot of these do not produce much cash. that is the hard reality of where we are today. this is this process and it all started really with, you know, what was the war on u.s. shale

coming out of opec and opec-plus , but that word is ultimately going to be won in the capital market. with a lack of capital availability. shery: patricia mosser -- katie, thank you so much for the latest on oil. we have another on the bloomberg. first quarter earnings coming in. the group recording -- reporting fourth-quarter revenue at 58 billion yuan, and first quarter net income at four point eight one billion yuan. when it comes to net income, not 4.8 one billion yuan would be a fall of 22% year on year. when it comes to first quarter eps, 69 renminbi. again, when it comes to the first quarter, 58 billion yuan would be a fall of 23% year on

year, maybe at the world's largest appliance maker. let's get the first word news with karina mitchell. says hepresident trump sees light at the end of the tunnel in the fight against the coronavirus with the fourth quarter of the year to be "really, really good." he said the coming months will be a transition period, echoing predictions from his economic advisers. the white house has been urging states to consider reopening their economies as the number of new cases starts to slow. hong kong since the economy will contract by as much as 7% this year as the virus fallout back to pressure from months of anti-china protests. the first quarter gdp reading is due on monday and may be worse than was seen during the financial crisis. hong kong has been in recession since the second half of last year with tourism, retail, and entertainment all under severe pressure. singaporemarket in has seen its sharpest quarterly as theynce sars in 2003

deal with the highest number of virus infections in southeast asia. 20,000 throughst march due to a decline in the number of ex-pat workers. the unemployment rate hit 2.4%, the highest level since 2009. africa's largest wireless carrier is seeking to dismiss u.s. claims it paid the taliban to avoid attacks. families of u.s. service personnel killed or wounded in afghanistan launched a case against the company last year, saying it paid money to the insurgents to protect his mobile phone towers. they say the suit targets the wrong defendants in and is in the wrong court on insufficient evidence. 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. shery. shery: we are getting breaking news at the moment. we are hearing fresh meat is

causing production at a beef plant and this as they are screening team members for covid-19. this is a temporary pause in order to conduct deep cleaning and sanitizing asian. this coming after president trump signed an executive order to force slaughterhouses to remain open. tyson foods is the largest meat processor in the united states, and they had to close their plant in kentucky. factory,t closure of a meat processing factory, in the united states, as we could potentially see shortages of meats given that we have seen more and more workers at these factories contracting the covid-19. production atsing a beef factory. coming up next, elon musk and shareholders dancing again after the latest quarterly numbers, but how long the music plays in

2020 is still a question. this is bloomberg. ♪

haidi: you are watching "daybreak asia." plans for announced deep job cuts and reduced output amid the worst crisis in aviation history. production of wide-body planes will be scaled back as customers shelve orders with the 737 max returning from its grounding gradually. the coronavirus has ravaged the aviation industry and travel demand and boeing aims to cut 10% of its workforce, 16,000 jobs. airbus is warning of the greatest crisis in aviation history after burning through almost $9 billion in the first quarter, and almost half of that came from the resettlement but

he severe fall in orders amid the pandemic has added to financial woes. the ceo says airbus aims to survive without state support but needs as much help as possible from customers and suppliers as it can find. china's top airline slumped in the first quarter and there are warning signs that the worst is yet to come as the coronavirus hampers demand for travel. china eastern lost a combined $2 billion through march and are operating at less than half capacity. domestic flights have picked up at the country eases restrictions, but international demand remains weak. isgapore airlines says it expecting "substantial losses on jet fuel hedges in the year through march due to the enormous cut in flights due to the collapse of oil prices." it says that means it is overhead sean fuel consumption and surplus hedges will be market to market as of the end

of last month. breaking news out of softbank. they have revised their full-year financial results, coming out and saying they are seeing full-year operating loss of ¥1.35 trillion. the estimate it lost was for 116.8 billion yen, so this is a bee revision and a loss to much, much larger for the full year, talking about more than one trillion yen, and the expectation was for around 110 billion. softbank saying there will be no changes to the financial cashies for ltv and also positions. we will get you more updates on that story as we get them, but of course, we have seen softbank suffering from big losses as some of their startup bets have not played out. now, they are saying they are seeing ¥100 billion loss from

investment loan commitments. for now, let's turn to tesla. shares surged after hours. the electric carmaker reporting the first-ever quarterly profit sukuk off a year, but it is not all good news. dana hull covered tesla and she is with us from san francisco. great to have you with us. of course, another quarter of a huge cash burn, not to mention they did not give any forecast for the next few quarters, so give us your take away on what was important during this earnings report. dana: it was a very positive earnings report, third positive quarter in a row, but the big news is they just had the earnings call and elon musk went on a tirade about the bay areas shelter-in-place orders paid he called it fascist. he said people should have their freedom. he is clearly very annoyed that tesla does cannot resume production anytime soon.

factories, one in fremont, one in china, so the inability to produce cuts into their ability to make cars and if they cannot make cars, they cannot sell them, so that was the big news. haidi: what are we expecting in terms of guidance for what the forecast might look like in the post or immediate aftermath of these covid-19 disruptions to demand and production? emily: tesla did not give any guidance or they said anything they said now would likely be inaccurate and they would give guidance in q2, but i mean, there factory in fremont is currently shut down. it cannot resume production anytime soon, and that will really cramp their ability to make cars. you know, i think what we heard on the earnings call with analysts was a very frustrated elon musk, but you know, after hours, the stock is performing high. this has been a very good for

quarter for them. going forward, they will see a lot of headwinds. shery: how well did they do in china? emily: they did not break out shales in china at all. we havee have -- shery: seen the data. what can we expect in the next few quarters when it comes to what models we can see from tesla and their deliveries? mean, tesla makes -- i tesla makes four cars, the model s, x, three, and y. they are ramping up production in china. you will not see any other kind of car. the big focus is really on ramping model three and getting the model why out the door. -- y out the door. haidi: what are we expecting when it comes to future cash burn? emily: tesla makes money selling

cars. unless they can really ramp up reduction from the u.s. to shanghai, they are not going to have any cars to move. there factory is shutdown. i feel like people do not fully understand how significant it is that the bay area shelter-in-place order, which was set to expire on may 3, was just extended through the end of the month, so that's basically, you know two out of three months of the quarter that tesla is not making cars, and it's very difficult to just turn the factory back on. it takes quite a wild to ramp up to pre-covid-19 production volume, so the second quarter is really going to be where the rubber hits the road in terms of, you know, their ability to have any kind of regular cash flow coming in. thank you so much for that. dana hull in san francisco with the latest on tesla. toarly, looking beyond that see the impact of the virus. we are just getting these

surprise numbers out of softbank. of course, the preliminary net loss being reported is ¥900 billion. we had been looking at potentially a net loss of ¥750 billion, so that was a dent on expectations. in terms of, you know, the details of the numbers, saying the nonoperating losses are now trillion,o exceed ¥1 ¥700 billion loss came from the investment loan commitment. no change to financial policies when it comes to the cash position. the full revision coming through on that vision fund loss as we have been speaking at length. softbank suffering on the back of some of its high profile investment failures like we work. stay with japan because we are now getting breaking news. march industrial production numbers coming in month on month, a contraction of 3.7%, the smaller contraction then

what was expected. year on year, the preliminary numbers, also a smaller contraction of 5.2%. of course, the march numbers seem a little bit better than what was expected, but april could be far worse. we have heard from manufacturers including toyota, toshiba, announcing suspensions of factories. retail sales year on year contracting 4.6%. month on month, a contraction of 4.5% in line with estimates. plenty more to, on "daybreak asia -- plenty more to come on "daybreak asia." this is bloomberg. ♪

haidi: let's get the latest when it coast to japan's industrial production numbers. anstey is in tokyo. your takeaway from these latest numbers? chris: these march numbers, you know, coming in as expected, or in the case of industrial production, not as bad as expected. they do underscore that the first quarter is going to be another contraction in gdp. that would be the second in a row after the sales tax because to gdp to decline in the fourth quarter of last year. all in all, i think policymakers, you know, may happy that they did not come in worse than they did. the key thing will be, of

course, what the second quarter looks like, and there, we know the emergency declaration of japan over the coronavirus was declared in april, and right now, the governor of tokyo is asking for an extension deeper into may and even talking about fines for stories that stay open so there is a bigger hit to calm. when government and the boj have done plenty. could there be even more to come ? chris: the key thing to look for now as we have got parliament voting on the abe administration's extra budget today. the key thing will be after that is enacted, what does the ministry of finance say the net impact is in terms of extra borrowing? that will be the key to determine just how powerful this

fiscal stimulus is. japanese budget packages are very difficult to read, but at the end of the day, how much extra are they borrowing to finance it? that would be the key to look at and to determine whether more will be needed. thank you very much. coming up on the next hour of "daybreak asia," jp morgan's kelly joins us -- david kelly joins us to talk about upside across asia markets. this is bloomberg. ♪

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good morning. i am haidi stroud-watts to "daybreak: asia." gains. look to extend oil futures rebound after declines. ,resident trump seeing light

operation warp speed aims to drastically cut the time it takes to develop a vaccine. results, theses net loss is 20% worse than initially thought. japan come back from a public holiday. despiteei gaining 1.7%, stronger japanese yen the past 106.ays, now we had industrial production and retail sales earlier coming in better than expected. is gaining 1.4%. , untreated at the moment, seeing ¥900 billion preliminary losses.

haidi: trading in this part of the world, australia online. liner --, the golden raising.r capital that stock has been suspended. we are seeing upside in the itsie dollar, close to 100-day moving average. we are also watching the oil patch. are we seeing a nascent recovery when it comes to demand? we are starting to see refineries see more demand with cars, the economy reopening. a second session of gains for , including that 23% gain overnight. from david kelly,

j.p. morgan asset management. time wet is a funny find ourselves in. asian markets back in bull market territory. overnight, therapeutics showing more efficacy, or maybe it is more of an aspiration we could see a vaccine by the end of the year with operation warp speed. is there too much enthusiasm over the worst of this? yes, definitely too much enthusiasm. the other thing in the u.s. parts of the economy most exposed to social distancing are a smaller part of the u.s. equity market. low, it'ss are so hard to commit to the bond market, helping the stock market

weather this storm. if it was just the virus, the market ought to have gone lower. how strategic are you at this point given there is a great deal we don't know, another market bottom? what opportunities do you see with valuations not at bargain basement levels? david: they are not basement levels in the u.s. -- emerginggency market stocks look relatively cheap in this environment. is whole world economy basically on hold until they have a vaccine for this virus. it is nice to have treatments. we hope the fatality rate comes peopleut the reality is will not go back to their normal activities until they feel safe,

and we are a long way away from that, at least in europe and the u.s. zealand, taiwan, new australia, hong kong, china, perhaps, it seems like the worst of the virus problem is over. east asia to to do better in the world rebound. being despite valuations better in emerging markets, how much does it matter they do not have the fiscal room in the monetary policy room to do more if things deteriorate because of the virus? david: that is a problem, obviously, and makes it tough for the population, but , a lot of these markets have younger populations. when you look at how the disease is attacking very old people, i think jan is under much more

japan from this virus -- is under much more threat from this virus than other countries. i do think this is a relatively butt recession, very deep, 20/20 is the year of the virus, 2021 is the first year of the recovery, by 2022, i expect the global economy will be booming again. it is worth taking a position in emerging market equities right now and writing it out. of etfthe boj saying 75% for choices will be for topix -tracking etf from may 1. we have seen how much the central bank in japan has been involved in the markets. we much more change could see from central-bank action in japan? david: well, we could see more. ofhas been the heart

haruhiko kuroda's rule, do what theecessary, shock and awe market, but it hasn't achieved strong economic growth. i think japan needs to look beyond, it is beyond financial problems. we always seem to approach this with how do we put in more monetary stigma is, what else can the boj do to support? the issues in the japanese economy are more structural and need to be addressed from that perspective. , as you say, it looks like a short impact, but severe one. how unusual this is not a financial system collapse. how much do we not know about the after affects, potential implications we cannot

know yet? oh yeah, i think so. i think this will -- david: i think this will leave the world changed socially. i think working from home will become much more normal going forward, less traffic to philip offices. that is not -- fill up offices. the ways of delivering goods and services to people's homes, that will grow. i think robotics will grow more. i think people will have to live a more health conscious life in terms of social distancing, so it will have profound changing. companies today, think about how can i investing companies that will survive this deep downturn, but also companies that will thrive in the new world post -covid-19. time. thank you for your

take a look at what softbank is gains a third session of as the japanese market comes back from a public holiday, this after softbank revise their full-year financial results, now seeing a preliminary net loss of ¥900 billion instead of y750 billion. the stock rising today. we are watching when it comes to bhp, also fortescue metals after some production numbers. speak to the ceo of fortescue metals in the next couple of hours to get her views on the economic recovery in china and demand. hour,ill be in about one that exclusive conversation at 1:00 p.m. sydney, 11:00 p.m. in

new york. ♪ the coronavirus upended first quarter, affecting major airlines. plus, an exclusive interview with singapore's minister for communications and information. this is bloomberg. ♪ oomberg. ♪

haidi: we're getting the latest coronavirus data out of china, reporting four additional , 33 on aprilases 29, no coronavirus desk on april 29. cases, nodditional breakdown on how many are imported, but that has been the

trend for many weeks now. let's get the first word headlines. >> president trump sees light at the end of the tunnel in the fight against coronavirus, with the fourth quarter of the year being really really good. he says the coming months will echoingnsition, his economic advisor. germany sees the pandemic pushing the economy to its worst recession since world war ii, as this and send household confidence collapses across europe. gdp will fall by more than 6% this year, more than the financial crisis. the government hopes it's $1 trillion rescue package will limit the damage. prefectures asking the government to extend the state

of emergency as numbers rise. the situation remains severe. unemployment claims are surging in southeast asia, with 9 million people registering. the labor market is slumping and singapore, the sharpest contraction since 2003 and the sars virus. hong kong says that economy will contract 7% this year, the virus follow-up adding to the pressure from months of protests. gdp is due out monday. hong kong has been in recession since the second half of last year, with tourism, retail, and entertainment under severe pressure.

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. >> thank you. our tech editor joins us now from tokyo. taking a look at softbank numbers, operating estimates have not changed. what is the reason for the revised net estimate? issue -- the wework issue. softbank, they invested heavily ework and recovering the company after its failed ipo. they put it simply here, the change in the fair value management they made in the financial guarantee contract, that is the driver in the increased net losses now. is there any sense that the

worst that this is over? to what any guidance as the future might look like? itself,from softbank work,he outlook for wee there are no rosy things ahead. they handlen how the covid-19 situation, but softbank itself, the roadmap ahead involves a big share buyback. that is where we are seeing the sustained share price after ups and downs earlier in the year, and analysts and investors are looking beyond the current state losses and write-downs softbank is facing, and essentially taking this idea that the buyback will sustain the price.

indi: what are we hearing terms of softbank writing out the cope -- writing out the epidemic? funden in the vision portfolio, there can't any companies necessarily thriving, in the way zoom is. it should be doing better because it does that remote work in collaborating software, but not the stuff you might be ofing for, so it is a matter sustaining the price, selling off assets, doing that massive buyback that experts say is overwhelming. keep softbankll going forward. >> the latest on that revised

loss from softbank. more to come on daybreak: asia. this is bloomberg. ♪

♪ the federal reserve held rates, while talking of the damage caused by the virus-led lockdowns. i guess that the likelihood that the u.s. central bank jumpstarting the economy is "remote." >> the likelihood that the fed will be able to jumpstart this economy with extremely accommodative monetary policy is remote. this is not the kind of stuff that monetary policy was designed to do. monetary policy is designed to keep credit flowing and markets

functioning. it is not they are stimulate growth. it is not there to deal with our fundamental structural issues in the domain of congress. >> i am wondering. the fed said it would continue to buy securities, but didn't say how many they will buy, didn't say how long they will buy. does that bother you as an investor? would you rather more clarity what the fed is doing with qe? >> i like the way you refer to that. that the lack of clarity on the part of the fed increases the likelihood of volatility, and in volatility, there are opportunities as an investor. as and of pleases me

investor. is let'sion in my mind assume markets become more evolving qee ever or non-qe purchases, as everyone refers to it, so that uncertainty could spill into the bond market, in which case the fed would be very, very quick to react. one question i have for you is, this is for bloomberg subscribers only. the price of gold come up today? >> so how do we get out of this extraordinary situation. you project unemployment to reach 30%, could be in double digits by the end of the year. should the fed identify a threshold for unemployment to fall to before discussing and exits strategy for interest rates? >> that is inevitable.

they should establish the criteria. let's assume my projections are correct. unemploymentt won't be better than 10% by the end of the year. that was approximately how the worst of the great recession, and it took another decade of low interest rates to get the wenomy to operating levels were at in just december and january this past year, so i think they do ultimately need to provide some kind of guidance in .his area otherwise, i am concerned the market at some point we'll get it itself into a tantrum. we blew through the taper tantrum in 2013. through 2018.

those were not productive experiences. given the vulnerability of the economy, the fed is forced to be more aggressive than it would be. >> hard to get a real, on what the fed things that longer-term damage will be, but in their statement they say the economy will be affected over the medium-term, which is thought of as a year or two. do you read it that way? the fed is suggesting we will have problems in the economy for or ule and any talk of a v is misplaced and we should get used to the idea we will have problems? >> i was pleased with that part of the statement, a sobering look at reality. we all hope we will have a onhaped recovery and airplanes and going to hotels

and being in movie theaters, but that doesn't look realistic, and the fact the fed is prepared to anticipate problems over the medium-term is encouraging because it shows they are taking this very seriously. scott minerd. in southeast asia as the coronavirus and oil slump a fall in income to $829 million from more than one billion deal -- $1 billion a year earlier. airline slumped in the fourth quarter, and the warning there is worse to come as the coronavirus has hammered

demand. air china, china southern, china eastern lost a combined $2 billion through march, operating at less than half capacity. ,omestic flights have eased up but international demand remains weak. sinopec, a loss in the first quarter as a collapse in prices. the refiner reported a net loss of $2.7 billion, compared to a profit of just over $2 billion the year before. they were the first to shut facilities in early february because of the coronavirus and demand took a massive hit. we are watching anz, some downside pressure after this earnings season. anz was the first of the big four to delay paying a dividend.

a first half profit plunge of 60% as the virus sent bad debt provisions through the roof. we hearing from the ceos now that bonuses will take a hit. they also expect the unemployment situation won't be materializing until three to five years down the track. we are watching bhp. bhp saying they have the balance sheet to write out the changes out the changes. watching fortescue metals after it lifted shipment guidance on shipments.e coming up, and exclusive interview with singapore's minister for communications and information, talking about singapore as it continues to battle the coronavirus infection with its nationwide lockdown. lots more to come.

this is bloomberg. ♪

haidi: you are watching "daybreak: asia." i'm haslinda on in. as the city moves ahead with the rollout of 5g, at a time when the coronavirus has forced people around the world to stay and work from home. singapore'sin minister for communication and information, s. iswaran. good morning. pandemicxtent is the accelerating 5g adoption?

i hear you. i can't hear you. extent is the pandemic accelerating singapore's 5g adoption? this is an important milestone, building a world-class 5g system in singapore. track to have two standalone 5g networks with 50% coverage by 2022. time, thisthis investment and announcement takes on added significance. first, what we see is an is importanthat

for the digital economy in doing business. the importance of digital economic connectivity and the infrastructure that supports it has taken on added significance, so this is an investment in singapore's economic future. second, these are substantial investments that come at a time of uncertainty. forpeaks to the confidence the long-term economic potential, and the potential of 5g in singapore. i think it is an important part of the overall effort and shows singapore is digital future ready. in the context of the covid-19 situation, we need that digital economic infrastructure. quantify that for us

and put that into perspective. how much of a boost will 5g provide the economy? which sectors will generate the most revenue for 5g providers? challenge is the use cases for 5g are evolving. that business use cases in transportation, aviation, areas around ,anagement of estate and so on and the movement of people, there is a whole range of applications in use cases. there are also consumer use cases which will become more important in the years ahead. we have been working with a

toge of partners in order work on use cases which can anchor the value proposition. it's not just the initiative in terms of the infrastructure, but also working on use cases because the demand side will be key for the commercial value proposition. haidi: -- haslinda: minister, this is a , billions ofnt dollars. surely there must have been some calculations made in terms of revenue that can be generated by 2025 -- 2022, 2025? >> i think the telcos will be in a better position to answer this with specificity. is a license this

for 15 years, so it is not about recovering the investment or creating returns on the investment in the first two to three years. it is about taking a long view and establishing the value proposition. , iterms of the investment think you can look at what has happened around the world, it will have something that will run into hundreds of millions and probably billions of dollars. the first thing i would say is of the goal of 50% coverage by 2022, and 2025 for nationwide coverage, it allows the telcos to stake out there for the development of the asset and infrastructure. so i think there is enough flexibility. the investment is long enough, to take a long view, we look at but thestment,

significant returns on it. haslinda: maybe this is a question that the government can't answer. in terms of how much is the government collecting from the allotment of the spectrum? had both parties paying $55 million. if you compare that and normalize it for population or duration of the license, plus the spectrum, 100 megahertz, that we are awarding, it is somewhere in that median have international benchmarks. outset, our focus has been not just getting a ,eturn to pay for the spectrum

it is actually the overall investment that the telcos undertake to maximize the benefit. paid will bet they 15% of the overall calculation. what was weighted more heavily is what value they could bring in terms of value added solutions to businesses, solutions for consumers, and this is an important part of the evaluation deciding what value they bring. haslinda: minister, are any of the telcos using huawei equipment in implementation of 5g? >> we have not certified any vendor. in fact, our approach has been inemphasize our requirements terms of security and resilience, and any toco providing the network will have to meet the regulatory

requirements. ensuren we also want to that we have certain level of resilience in the system. thehe second part, based on vendors available as part of the process, it is clear we will have diversity in our system. no single vendor has been excluded -- go ahead. 5g networks, including singapore's 5g networks, include a high level of service and performance without huawei? >> i think that is a technical question and is best put to the telcos. in the process, there will be technical evaluation in the telcos will have to evaluate the

solutions put forward by the various vendors. , but others like also have 5gnokia systems around the world, so in the end, it will come down to the evaluation from a commercial perspective, on the other hand, the obligations under the proposal, and the regulatory requirements for security and resilience. minister, a question on the virus. ago,we spoke one month singapore had 160 cases. now singapore has the most cases -- i forgeter india the other country right now. singapore about how must not be complacent in the it manages the virus.

has singapore pin complacent when it showed a low number of cases? think that is partly the case. viruse taken the seriously. whether the effort in terms of restrictions on travel and other restrictions in terms of the domestic population, and also the work we are now doing with the broker community in singapore, i would say that all our steps have been informed by the data, and then the trade-offs in making irrelevant decisions for our society and economy. we remain resolute. is to curb this virus in singapore. we are sparing no effort in

that. the circuitnded breaker until the first of june. the cooperation of business in the population and we will overcome this. youinda: s. iswaran, thank for your insight this morning. plenty more to come on "daybreak: asia." this is bloomberg. ♪

haidi: china's april pmi's due today, analysts expecting a pullback after last month's outbreak to new levels. joining us now is our guest. great to have you with us. what are your expectations for chinese eco-data today? a return toe seen manufacturing, production, could we see a significant rebound going forward? , our forecast for manufacturing pmi is below bloomberg consensus. we saw solid activity march, but it has lost momentum has locked down measures were adopted across the world.

if you're looking it , you willency data been at there has limited increase in manufacturing activity since march because of order cuts in china. what does that mean going forward for the second half? if you're not seeing the rebound in the momentum starting to fade , does that mean the rest of the year as well? quarter,ly, the second there can still be recovery in china's domestic consumption, and curtailed external demand because of the continued worry that infection outside china, but for the second half, i

growth has china's there is less worry about infection, there will be more consumption, especially online shopping and services. stores in china are still seeing 70% as people than usual. if that number can resume gradually, those activities in china can return to normal, and that is where china start to stabilize. with meetings rescheduled expectingat are you that this balancing between economic recovery in presenting

a second wave, and will they have to draw up the gdp targets for 2020? government chinese by setting the date for the annual npc suggests the government has already prioritized the task of bringing the economy back to normal. it is not easy given the global number of new cases, over 70,000 per day, and there can still be a second round of virus outbreak caused by imported cases. i think the government will have economice between

recovery and a second round of virus outbreak. this means any moves by the to ease restrictions ,ill only take place gradually making a v-shaped recovery less likely over time. the specific gdp targets for this you, we only forecast 2.40 growth for china's full year gdp, and we think it would be more realistic for the --ernment to set a compound combined gdp target for this year and next year and focus more on extending employment right now. we have to leave it there. thank you for joining us. that ahead of pmi numbers from china. we continue our coverage later. we will speak with one analyst on bloomberg tv. this is bloomberg. ♪ ♪

haidi: facebook jumped in a trade, showing slowing advertising demand before the covid-19 hit marketing budgets. our guest told us which sectors are under the most strain. >> weakness in some categories

like travel, automobile. strength in places like gaming, application installs, online conversions. that gives you some of the flavor. thes broad-based across small and large advertisers. i would not say it is concentrated on small business. >> are you seeing some regions perform better than others? >> if you look at our top every countryser, has some sort of lockdown measure in effect right now, so it is broad across countries. , we dos of advertising have an advertising business in china that is export-driven. we have advertisers in china trying to reach users outside of china. we did see that business come off quickly in q1, and some

recovery in china. a lot of those advertisers and verticals like gaming and e-commerce, and those verticals are doing better, but we saw that quick drop-off in china earlier in the quarter. >> 95 percent of folks at facebook are working at home. what is your timeline for bringing those people back to work, especially there will be some government guidance, but you could choose to even be more cautious than government guidance? >> i think we will be more cautious. we are blessed with being able to work from home and operate relatively effectively. we have 95% of our people working from home. code, able to ship new able to moderate content, keep connected with our business customers, so a lot of the essential functions. whoave a lot of employees

are in our data centers, for instance, so we are focusing on safety for those folks, but we will probably be more cautious. part of that is we can do our jobs from home. we want to make sure the infrastructure is there for people who have to go into the office, so we don't want to overload public transport by going back to quickly. dealu did a $5.7 billion in india with geo. we we see more investments like that, where, partnerships? >> india is a special market. who is a special company has done great things to bring hundreds of millions of people into the digital world, that geo is an exceptional effort. anda is important for us, it has been the driver of growth for facebook and whatsapp for

many years, so india is a critical market in the long term. we were fortunate to have the balance sheet to be able to make an investment like this in a troubled economic environment, so we are pleased with that and look forward to working with geo platforms to help small businesses to connect with people on whatsapp and drive commerce and payments for that. >> it sounded like mark zuckerberg indicated you would be doing more. i'm wondering if you can shed more light on regions in particular that might have facebook's interest. >> i think generally what's up in the power of that platform and doing more on the payments front across the globe, there are certainly opportunities to this was clearly a

special opportunity and something that warranted the largest investment we have a for made. facebook cfo speaking with emily chang. we will be watching dbs when it starts trading. it has posted its first profit decline in three years. analystg intelligence's joins us now. what do you make of these numbers? where they worse than expected and what does it mean for the year? >> thank you for having me on. good morning. i think the numbers are bad, of ,ourse, and not surprisingly this comes from a surge in provisions. i am expecting healthy topline growth. the bigger hit was from the $1 billion this quarter in provisions. the key take away is the $3

billion to $5 billion provisions willnd how much the market add to this. i think the topline was still up 13%, the provision profit of 20%. that is great, but those numbers will come down. the key catalyst like that lockdown and singapore and china's recovery will be key catalyst. >> what are some of the big topline headwinds for dbs now? >> the provision side, they have given some guidance, but the bigger concern is on the margin zero.rates at about march poses risks. ,specially trading floors

deleveraging and portfolios. on the long growth side, i think that may hold up because repayments will slow down in business will draw on credit fines. some margins in provisions are still bigger issues. >> thank you very much. seniorrg intelligence's analyst. we will look to dbs trading soon. don't miss our exclusive interview with the ceo of fortescue metals. that is coming up later. this is bloomberg. ♪

♪ >> it is 9:00 a.m. here in beijing. welcome to "bloomberg markets: china open," i'm tom mack kenzie. david: i'm david ingles. we're extending the gains we had over on wall street amidst optimism about a treatment for the coronavirus. oil futures are rebounding as we speak after dramatic declines. tom: