haidi: a very good morning. i am haidi stroud-watts in sydney. we are counting you down to the start of trading. shery: welcome to "daybreak asia ." asian markets set to rise amid positive signs for an experimental vaccine. oil rises to pre-lockdown levels with china's demand all but recovered. softbank loses aliens of start billions of startups.

throws its weight behind the world health organization and says any vaccine success will be shared by all. president xi says cooperation is vital. it was really this help vaccine -- help on this vaccine obnoxious safety but also the immune response effort to see vaccine -- that really de u.s. stocks higher. we did have the s&p gaining more than 3%. u.s. stocks surging the most in six weeks on the promising early results. that has led to a pretty steady sense of positivity. we are seeing u.s. futures as well as trading in new zealand. australian futures among one of the asian features that are trading up by over 2%. in fact, the highest since march 11. we are seeing highs for hong kong and japan futures going into the start of trading in asia.

let's get more on china. xi jinping is promising to make any coronavirus vaccine universally available once it is developed. this as he reiterated beijing's support for the world health organization. the pledge is part of efforts to defuse criticism of his government's response to the pandemic. >> the virus does not respect borders. we must strengthen international cooperation. mankind is a community with a shared future. solidarity and a cooperation is our most powerful weapon for defeating the virus. tom mackenzie has more from beijing. -- talking about universal access to vaccines, support of the who. xi and his president team trying to portray themselves as the adults in the

room on these major issues even if sometimes, the reality does not match some of their rhetoric on issues. president xi jinping addressing the world health organization and saying that any vaccine that is developed in china will be sent abroad as well so there will be a global public good. five vaccines in trial so there's been some progress. he also announced china will be providing $2 billion over two years to support the fight against the virus. president trump has cut off funding to the world health organization. china has come under pressure not just from the u.s. but also the european union and australia over its initial handling of the outbreak and some of the aggressive diplomacy in terms of response, or criticism it has faced. it seems xi jinping has consciously accepted the need for an investigation at some point. it will have to be led by the

world health organization. shery: china trying to reign in the outbreak. more than 100 million people back under lockdown in china. tom. people in china under lockdown again after there was an infection have caught off transport. trade, buses, schools, universities, and thousands of have been put under quarantine. it is pretty powerful response from officials of the concerns more broadly about a second wave of infections and the economic cost it could have as china tries to get up to full capacity. there is a warning for other countries as they reopened their economies. in terms of one of the reasons we saw oil prices really consolidate overnight, this idea that demand in china is actually

doing pretty well. what does it tell us about the broader recovery? almost back to levels seen before the virus. you are getting oil traders saying consumption has bounced back up to 30 million barrels a day, short of what they were consuming in may this time last year. thereint to the fact that was a lockdown in china. demand fell by 20%. it does suggest that there are more cars, factories have reopened. people are avoiding public transport. gasolinemand for and diesel. the number of flights remains restricted domestically in china. there is something of a tightening in the oil markets. iea, international energy agency, they have remained pretty pessimistic about chinese consumption going forward.

are predicting it will consume less oil. shery: tom mackenzie in beijing. let's get to karina mitchell with the first word headlines. karina: confirmed new cases of coronavirus in the u.s. rose 1.2% monday to 1.5 million. that is the lowest daily increase since the end of april. the news came as madonna said and their mental vaccine is showing promising signs based on a small human trial. andrew cuomo says western parts of the state including the city of buffalo, will be able to reopen on thursday. meanwhile, jerome powell confirmed he is prepared to use the bank's full range of tools and leave rates near zero until the u.s. economy is back on track. in remarks ahead of virtual testimony to the senate banking committee, he promised strong support in challenging times although any actions are part of a broader book sector response.

how will speak remotely on tuesday morning, eastern time. china has slapped an 80% penalty on barley from australia for five years. the measure is effective immediately and includes almost 74% of antidumping duties. around $900ports million of barley to china each year and says it will challenge the ruling at the wto. canberra has been pushing for an independent investigation into the origins of the coronavirus. ma -- thet boss, pony tocent boss will skip due unspecified health issues that he has been a leading figure at the annual meetings in beijing, where china's corporate leaders gather to debate targets for the year. despite his absence, he is said to be preparing to submit several proposals for discussion. 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.

haidi. still ahead, the cochairmen of oak street capital says the support from the fed is only temporary and that distress is coming for credit markets. here are exclusive interview with him later on. first up, we will be speaking with the nippon capital partner about her market strategy and why she says -- right now. this is bloomberg. ♪

haidi: investors are turning to corporate earnings as a guide to which companies are winning, losing, or simply surviving the covid-19 pandemic. the trick is knowing which ones to pick. on the lineins us from california. it is great to have you with us. given that so many companies have really pulled guidance, it

is tough getting any sort of visibility into the next few months during this pandemic. how are you playing the earnings season? focused on stocks we think are likely to report strong earnings over the next one or two quarters. we think this earnings season will see significant surprises because consensus estimates have not adjusted enough. the market does not know what to expect so the reaction to earnings is much stronger than usual. our approach to investing is systematic and what we are doing is updating all of our data and models pretty much on a real-time basis using structured data like news, company announcements, as well as monitoring what companies and respective sectors are doing. for example, within markets like exposures.y want many of our sectors like ,ackaged foods, internet retail

we think vstoxx have upside in terms of earnings. how big are your picks? there is so much concern. the big companies with good balance sheets, they are the ones that are doing best. >> that is true. our exposure tends to be within the mid-cap range. our research shows that a lot of the large-cap stocks are quite theyiently price because are traded more by global investors versus if you look in many markets across asia and em as well, a lot of the neglected stocks tend to be in the 3 billion category where there is arbitrage capital. that is where we see our sweet spot these markets. does value go even cheaper

from here? where would you see it being the entry point? a good question. value as a strategy has had a tough 10 years for a variety of reasons but i think even stocks that are reasonably valued and have very strong and long-term earnings prospects could get cheaper in the near term just depending on which sectors they are in, the quality of the balance sheets. wele we are building value, think value is defined in the context of future funds and future earnings, so we are not buying value stocks just looking at both values or dividend yields because dividend yields can get cut as well but we are defining value in the context of where future earnings are coming through. and you are right. value stocks can get cheaper so there will be many points wheren now and year-end

they continue to remain volatile. what we are going to do is look for better earnings before we buy even valued stocks. haidi: when it comes to issue emerging markets, you make the interesting point that we have seen foreign outflows area they have been in large part made up by a kind of a surge in retail thailand where the recovery has been driven by retail as well. what are the implications for these market that are seeing a higher makeup of the retail investor? longer-term implication. in the short-term, investors are not looking at fundamentals when they trade so they tend to buy stocks that are in the news which means stocks that have recent momentum are likely to keep doing better. the longer-term implication of course is that you are going to

see more and more mispricing in these markets. you pointed out thailand. in thailand, we have seen retail activity become over 40% of the market. almost 80% of the trading volume is retail so i think in the short-term, you continue to see glamorous stocks and do well but in the long term, you see a very significant opportunity because these stocks will suffer away from fundamentals. there's going to be a lot of opportunities there. shery: in your notes, you tell us you are very positive on taiwan. i wonder how much of a medical discount factored and given that we continue to see these rising tensions with china. of course, we have seen taiwan also having a showdown with china at the w.h.o.. pooja: you are right about that. the taiwan-china issue is an issue.

are likely to be impacted by the tech were as well. our approach to taiwan has been to stay away from technology stocks. we have stocks and sectors that have domestically oriented exposures. a stock we have in the portfolio company,ernet retail domestically oriented. we like it because it has good cash flows, positive investor sentiment, and strong near-term earnings. we are staying away from the semiconductor supply chain. of the where we see more regulatory and political risk you talked about in terms of relationships with china and the u.s.. was surprised about saudi arabia because you like this country but at the same time, we have seen the collapse of oil, recovering a little bit today, but at the same time, that puts so much pressure on the government.

why do you like saudi stocks? pooja: it is down 16% year to date. it has not then one of the best markets. we see saudi arabia defensively within emerging europe and emerging middle east. the oil recovery will drive markets and i believe it is in their interest to see oil prices recover. hitsprices are low, it saudi arabia from an income standpoint, revenue standpoint, but also from a balance sheets standpoint because so many of the assets are in oil. they control the price of oil and they can moderate supply, which they have done to support oil prices, so as oil recovers, i think the market will see upside. isimportant point to note that it is an objective market from a global perspective. less than 10% of the volumes of that market are from foreign investors so there is a lot of mispricing in that market because most of the capital void

in the market is less informed. arabia, we in saudi like some cement companies, a lot of mispricing in that market, currently. really great to have your insights. pooja malik with us. do not miss the big interview later today. opposition leader joins bloomberg exclusively. this is bloomberg. ♪

haidi: germany and france have agreed to support a fund to help the european union whether the worst recession in living memory. the two leaders appear together in an effort to bridge the divisions over the recovery fund. let's get to bloomberg markets

anchor yvonne man with us. this is significant in terms of what a lot of people have been saying. this is what europe has been missing. yvonne: right. you see here germany and france taking the initiative and angela merkel hoping that the rest of the e.u. will listen now. they proposed this plan backed by debt wit based on contributi. merkel says the funds will be within the framework of the e.u. 's budget and this is seen as an e.u. e.u. historic step'that will strengthen thes financial power -- strengthen the e.u.'s financial power. there are deep divisions among the poor and rich nations pick spain and italy are pushing for more, barring it on the other side of things, you have the netherlands, sweden, denmark, asking for more loans in order to limit the risk of getting stuck paying the bills so that

still remains the biggest obstacle so it is not a done deal just yet. we are watching some new headlines that crossed in the last hour. brazil the world's fastest-growing hotspot in accounting for 13% of all new cases globally in the past week. it has taken over the likes of italy and spain and the u.k., inching closer to number two, russia, in terms of the number of infection cases, which only trails the u.s. so the spread has been going fast and threatening the public health system that was already underfunded and you also have a political crisis and infighting amongst federal and state officials, leaving the country with no strategy at this point. yet, indonesia, they are not ruling out using restrictions ahead of the holiday. yvonne: they enforce a ban on travel during the busy holiday

after we saw infections jumped 2 18,000 withmay the death toll climbing to 1200, 1 of the highest among the region, and there have been some reports of a large number traveling to their home towns. that is where the focus is right now. in beer, another area concerned. it seems like investors are saying this virus package fell short of expectations. we have a chart of just what they are concerned about. the headline suggests this is 10% of gdp. hsbc is estimating the cost perhaps is just 1% of gdp. this includes loan guarantees for small businesses, cheap credit for workers and farmers, so it does help in the quiddity but not so much in terms of demand. shery: yvonne man in hong kong. the bloomberg school of public

health vice dean spoke about how to prevent the coronavirus spreading further. >> i think masks will help a little bit and it is a good idea for people to wear masks. they don't have to be the fancy medical masks in order to protect other people. the mask blocks the droplets coming out of somebody's mouth and because people are not sure, they may not be aware if they are infectious because the symptoms have not started yet. it is a good thing to wear a mask to protect other people. the real thing that attracts people is the distance between them. the physical barriers, six feet, redoing the schedules so there are not as many people in the office. all of those things are important. the masks are like the icing on the cake, so to speak. >> it is good to hear that the masks are icing on the cake. the washington post chart of the seven day moving average, clearly, the tone is that we are moving to a better place.

where is the place we are moving to? is good news that there has been a little bit of a drip down and i think a lot of people are taking a lot of precautions, which is good, and people have to maintain that. the virus appears to be a little slower to transmit in the heat so that is a good sign for the time being but it also means that we could getting a false sense of security that we are distancing enough and when the fall hits, it could go right back up again. i think it is pretty uncertain right now. >> give me a sense of what we know about immunity. do we have a clearer sense now than we did 10 days ago about how many people are immune? >> i think that there is a lot of positive science and some more recent positive signs that there is evidence of immunity but the case has not been proven so the positive signs include animal studies where animals get

re-challenged and do not seem to get sick again. the fact that there are not compelling stories -- scientific investigations of people who have gotten very sick twice with different strains. i think more evidence will come out but we are going in the direction that when people are sick with coronavirus, they may have less of a chance of getting sick for some period of time and that is good for a lot of reasons. that is a little bit different from saying we know exactly how to measure that so the tests have to be really calibrated with that. getting a little that suchptimistic immunity exists. we will be able to measure it. that will be good not only for some people's knowledge about whether they are relatively protected but it will be good also as a sign different kinds of fair. it makes it hopeful that may be the convalescent serum will

provide some protection, and of course, with the fact that immunity does exist, once we know that sure, that would be a good sign for abaxis. >> when do we find out whether contact tracing is really effective in protecting all? -- protecting people? >> we know it is effective in general. we have to know whether the united gates can launch programs that do it well, and that depends on training. johns hopkins training course now has over 150,000 people enrolled, which is great. it is free online. a lot more is needed because these programs have to be run very well. contactse able to find quickly, support people in quarantine, get them food if they need it, get them other supplies. move them to a different place if they cannot safely quarantine at home. these are the requirements that have been successfully implemented in other places. if we can do that well, it will really matter.

is supported by michael bloomberg, who is the andder of bloomberg lp bloomberg's philanthropy. this is bloomberg. ♪

haidi: vaccine hopes creating that surge in u.s. stocks. let's get it over to sophie kamaruddin to take a look at this positive set up for asia. that rally weing saw on wall street, risk assets getting listed early in the asian session. the zi yan testing 70 once more, trading near a one-week high as the aussie dollar tops 65 and s&p e-minis edging slightly higher and nikkei futures in singapore opening higher by 1.7%. we will be watching japanese financials. new strategy in the wake of the

broker's first loss in five quarters. it is to reduce headcount by 6000 through attrition in three years as the cost-cutting theme continues for the sector. this morning, wti adding 5.1 percent, trading at a mid-march high ahead of the june contract expert. checking in on bonds this morning, treasury futures just matching slightly higher after the overnight steepening across the curve and jgb futures settled lower. the boj's upcoming purchases may provide some support but the superlong sector, likely to see pressure with the u.s. 20 year auction in fear. in australia, 10 year yields adding six basis points ahead of the rba minutes. sharing. shery.let -- shery: let's turn to the federal reserve. testimony, he is

asking for additional government spending. kathleen hays is here with a preview. mr. powell will be testifying along with steven mnuchin. what is expected? kathleen: the cares act is on the table for the senate banking committee. it is their first quarterly report about how it is going so far. this is a coronavirus aid relief and economic security -- $2 trillion to help people who have lost their jobs, small businesses, and more. let's go right to one of the things powell is going to be saying. testimony was released in washington by the federal reserve ahead of the testimony at 10:00 a.m. eastern tomorrow. and what he said was we are committed to using our full range of lessee tools to support the economy in this challenging time.

even as we recognize these actions are only part of a broader public sector program. i would say, in the first place, we can see that he is echoing what he said on 60 minutes on sunday night here in the u.s. when he said with fed is not out of ammo by a longshot. when he talks about this being part of a public-sector response , implicitly, he is acknowledging that we are doing something that is a bigger plan. the biggest part is congress. congress is spending the money, congress is looking to do more stimulus. that is what is so important. one thing he did in these prepared remarks is he basically is repeating forward guidance. drawingven think about the stimulus because he said, again, the fed will keep rates low until the economy has gotten through the recent events and is

on track for full employment and price stability. some basic things, repeating things he has been saying lately when he speaks in public. >> what does chair powell have to accomplish by urging more spending by congress? kathleen: it is interesting because the fed chair never used to do anything like this. they would bend over backward. alan greenspan, janet yellen, not to say anything. fiscal policy, that is your business. jay powell has not been shy about tactfully saying, yes, we could use, more money spent by congress and it is tricky because he cannot get into a partisan battle. republicans saying slow down and see how this goes. he seems to be echoing democrat a bit who want to get another stimulus package passed right away. he has to kind of try and avoid that but at the same time, he

has got a lot of influence and think people think it is good for the fed chair to show this is so important and so necessary that he is willing to say to the congress, to the nation, yes, more stimulus will be needed or this recession is going to get deeper and it is already the worst when we have had since the great depression so i think that is what, too. even though it is a tricky path to walk, jay powell is likely to walk it again although i think each side will get him to agree with them. haidi: kathleen hays with us. oaktree capital is the largest investor, of course, when it comes to distressed securities worldwide. the cofounder and cochairman, howard marks, says the fed has great power but not limitless. he spoke with bloomberg about how the feds bond buying program has affected the debt market.

♪ >> we were a very active buyer in mid-march and on the 23rd or 24th of march, the government and the fed started to talk about what their program would be. around the 26, they announced it, and that drove up prices in the public credit markets to the point where we are not buying as aggressively at this point in time. has changed the market from what it would have been if they had not gotten involved and that has had an impact for us. i think that is inescapable. do you think investment opportunities are likely to improve from this point forward, where you will see the possibility-- the

of making elevated returns again or are we here now and here for the time being? >> you tell me. will the fed be the buyer on every transaction? in which case, prices do not have to ever go down. in theory, there is no difference between theory and practice, but in practice, there is. let's talk about the future in a serious way. i mentioned that the rating agencies believed in the investment banks, that between 15 and 25% of the high-yield bonds outstanding will default. that is roughly 400 billion dollars, a lot to buy. wereril, i believe there 19 defaults or bankruptcies and i believe that is the greatest in history, greatest in single market history. we are just getting going. bankruptcies largely occur when companies run out of cash and the fact that 19 occurred in the first full month of the crisis and that the

crisis has months more to run tells me there will be more defaults and bankruptcies and as i mentioned before, there are large, highly leveraged companies and investment vehicles that the government and the fed rescue program is not likely to reach and take care of so we believe there will be know, it boggles the mind to think that we will have a crisis the magnitude of this one and not have fallout, and typically, we have been able to profit from that fallout. >> is that to say that while oaktree was buying aggressively in march, less so now? it may become a more aggressive fire in the months ahead? >> absolutely. like they say in the football game, we take what they give us. dislocation,he

usually, the greater the bargains, which means the greater our buying. we think there is a substantial opportunity ahead. shery: howard marks. more big guests coming up, including the chairman of hong kong industries. up next, softbank took some big losses on investments over the past year and there may be worse to come. we will look into the earnings, next. this is bloomberg. ♪

karina: this is "daybreak asia." i am karina mitchell with the first word headlines. china is leading to make -- pledging to make any coronavirus vaccine available to all. president xi jinping addressed the world health assembly, calling for greater global cooperation to fight the virus. he promised to billion dollars to support the fight and offered china's backing to control the outbreak. two of asia's biggest economies are fighting to shore up growth amid the coronavirus. indonesia is ruling out any rapid easing the lockdown restrictions as cases spike, and is banning travel during the holiday. india is being warned its $277 billion relief package falls short of expectations. failing to deliver an immediate boost to an economy that was slowing even before covid-19.

armany and france are backing 500 billion euro fund to help the european union survived the worst recession in living memory. angela merkel and emmanuel macron proposed to distribute the equivalent of $543 billion to member states based on their contributions to the budget. the plan is a major step towards bolstering the blocks financial firepower without breaking german rules over borrowing. europe must stick together. this is about rapid economic recovery and therefore, we want to set up a temporary fund in the region of 500 billion euros which will be from the e.u. budget, not a credit, but rather, a budgetary expenditure which will provided to the most affected sectors and regions. these 500 billion euros will not be reimbursed the beneficiaries. they can either be reimbursed by the member states according to a

distribution which depends on raising the budget, or other mechanisms that we will decide with the commission. 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. haidi. softbank's ceo, masayoshi son, admits he made the wrong decision for wework, his fund lost money. these are the worst losses in the company's 39 year history. joining us now from singapore is the equity research md, atul goyal. as we get the details of the share buyback scheme and the share offloading when it comes to alibaba, what is next for softbank given the liquidity demands that are still ongoing?

is there worse to come? thanks for having me. retweeted that what we like is the pattern of the buyback. the fundamentals are still not favorable. we are not very impressed with the companies investment decisions. however,. race and for the investors, what matters is stock and we saw last about600 billion buyback, $5.5 billion buyback get it pushed the stock up 50% from ¥4200 to y6,000. ¥25 year, the buyback is billion. almost four times as big, and the stock is about 45 to 46. a huge amount of demand and less supply will push the stock higher p at secondly, and very importantly, the backstop, not

just investment grade, but high-yield investment. softbank has lots of such investments. it does not directly or indirectly benefit from that spillover of funds and money supply moving around, so that allows the company to probably get more funding. imagine one month back, we would be worried about surviving the crisis. now, they are looking to acquire grubhub, so we are in that situation right now. buyback and the backstop is very helpful for softbank and its shareholders. our bloomberg columnist suggested this might be the time to consider a vision fund. may be the only vision fund ipo given that the more hopeful holdings within that, the likes of -- are not likely to go public anytime soon.

the ipo's might start to happen next year. the amount of money in u.s. tech right now, i mean, for me, the biggest case deems to be building towards a u.s. tech bubble. starting later this year has given the amount that it is doing. softbank is aso, positioned as plenty of u.s. startups and tech companies. are all saying they worthy of higher valuations. we don't want to talk about it. times when people do not talk about valuations at all .

as we head into that direction, softbank is well-positioned to benefit. on a sustainable business, they have to come up with generally good investments. a lot of these are the ones have seemingly gone there in the past seven years, which have been not so impressive, to say the least. is it that earnings results and investment performance does not really matter as long as softbank's buying back their shares?" if that is the case, what happens once the share buybacks are over? from what you have seen of their investment portfolio, can you really gauge that they have a sense of what part of would actually work? they should know better. that is something we could have said before as well. much balance sheets or leverage, finding every other

company. but you know, they have so far have it very clearly. plus what happens after the buyback is over. andbuyback between february may of $5.5 billion. the stock went up from ¥4200 to ¥6,000. once the buyback was over, the stock crashed. we would not be surprised if after the buyback, the stock comes back. havehe next year, they this buyback going on and that allows investors to sell at a higher price point. sustainable basis, there are many other things they need to do on an ongoing basis. surprisingad some news this week. the saudi arabia sovereign wealth fund lending to borrow

$10 billion, pledging some of its stakes in softbank's vision fund, according to sources familiar with this information. does that tell you a little bit about how committed they are in softbank and the vision fund? they have already been spooked 's failure -- wework and they were not willing to invest more in the vision fund, two. atul: to their credit, they refused to invest in we work in october or september last year, 2019, when softbank was insisting they wanted to invest $16 billion in wework. when softbanks was urging other investors in the saudi's put their foot down and did not allow that to happen, so they have been uncomfortable with this kind of investment process by softbank

and the vision fund before. they did not invest in the vision fund even though we kept hearing that the company is pitching to existing investors. they have been uncomfortable with decision-making. they will say it is friendly and cordial but the signs are not there. at the same time, there was some unconfirmed reports. we cannot comment on those but the saudi investment funds have been already making decisions which were very different from what softbank wanted. always great having you with us, pooja malik --atul goyal. joins us on bloomberg exclusively at 11:30 a.m. hong kong time, 1:30 p.m., if you are watching in sydney. this is bloomberg. ♪

haidi: the united airlines ceo says he remains bullish on the future of aviation despite a crisis he describes as three times worse than 9/11. david rubin side about the way forward. >> as a result of all this, since the results are down dramatically and down so much so that you -- nobody can survive,

the federal government as part of the cares act and said we will provide you some money and you have now gotten $5 billion from the federal government. is that right? they have given you a grant and alone. is that correct -- a loan. is that correct? if that is $10 billion that united airlines had and you will give warrants the u.s. government, you have already given some, but is that enough? is $10 billion enough for united, enough money to keep these airlines alive? >> that is the great question of the day, david. we do not know what we do not know. right from the start, when we saw this happening, we immediately went into market to boost our liquidity. we had a pretty strong financial balance sheet, preparing for something like 9/11. this is probably three times as worst so we went in the market for as much data as we could get.

we issued stock, we have taken the grants, the loans from the government. we have applied for the second loan and we will make that decision shortly about that. we are also finding other ways, in essence, to a degree, to improve liquidity to the best possible point and then work on your cost structure to bring the cash burden down to a manageable degree and it is just time oriented. roughly $40 is million a day. in other words, you are spinning $40 million a day, in effect losing $40 million a day. >> that is more or less right. it is roughly the same number we have reported publicly. competitors, american or delta, they have the same situation, i assume, largely. >> roughly. all all of us spent a lot of time together working through the cares act conversations and interacting with legislative leaders and we are forever grateful for the assistance they

have given us. we are one of the few industries carved out. economic impact, the impact we -- we have economy all worked together and by and large, we all have different situations and positions, but generally, i think, in the same vein. >> that was the united airlines ceo. breaking news at the moment. we are hearing from local media in japan. asahi reporting that japan is considering ending the state of emergency in osaka, kyoto, and -- prefectures. we have seen japan lifting the state of emergency for most of the country. 39 out of 47 factors had seen a .harp fall we have more than 16,000 infections in japan already. we will get you more as we hear information from japan. let's get a quick check of the latest business flash headlines.

hasadministrator shortlisted a number of -- was -- hade list well-funded parties with strong credentials in aviation. the afr says the final four find out binding bids are due by june 12. uber is slashing another 3000 jobs and closing dozens of offices as the coronavirus hammers travel demands. the latest cuts follow the dismissal of 3700 -- and customer support and human resources earlier this month and now represent about one quarter of uber original workforce. the ceo has written to employees but failed to say this would be the last job cut. we will have plenty more coming up in the next hour of "daybreak speaking to the

morgan stanley economist about which economies in the region are best placed to recover from the pandemic shock. the market open is next. this is bloomberg. ♪

>> good evening from bloomberg's global headquarters in new york. i am shery ahn. >> and i am haidi stroud-watts in sydney. asia's main markets have just opened to trade. welcome to "bloomberg markets: asia." >> any vaccine success will be shared by all. president xi says cooperation is vital. infections, 90,000 deaths

in the u.s. alone, 100 million people back in lockdown in china. unemployment is seen rising again in hong kong, climbing for a seventh straight month. the economy is reeling from the virus and the anti-china unrest. let's get more from sophie. we have seen an exuberant rally on wall street overnight. through after the overnight moves in u.s. stocks and bonds. taking a look at how japanese stocks opened. the nikkei to 1.6%. to the upsideng and the yen trading study. jgb traders. g -- the government considering more funding is economic growth is going further in the second quarter. switching the board to south korea where president moon is

pushing for more ambitious fiscal support, which has a chief warning against fiscal stimulus, the rising death -- the rising debt load. the korean won is on the front foot. aussie stocks gaining ground. the aussie dollar holding above dayfter topping its 100 moving average for the first time since january. pressure likely with china's antidumping duties on australian barley taking effect from today. aussie bonds, 10 year yield creeping closer to 1%. the u.s. 10 year yield, little changed after monday. they are steepening and brent opening higher by more than 2%. trading at a mid-march high before the expiration of june contracts this tuesday. are also watching carnival, cut to junk by moody's. the outlook turned to negative. we know the travel restrictions

with the cdc pandemic order lasting until july. carnival has lost all its revenue for fiscal second quarter. they are going to resume failing in august, partial. outstanding have loans around $14 billion and moody's has cut them to junk. this is one stock that was rounding today. let's dive deeper with mark cudmore in singapore. with all the optimism of a sendingl vaccine, carnival up more than 15% at some point, could we see this upside, that risk on sentiment, replicated in asia as well? mark: i think absolutely. that is the short-term theme, a positive tone. the wholeenerally, background narrative is changing. people are moving on from the

shift that economies will see a sustained slow down to, look, policymakers have done extraordinary things with packages they provided and they have promised more. powell said they are not running out of ammunition. there is a massive package in europe, one of the stumbling blocks. investors are going, policymakers will continue having their back, pumping more back in, even if there is a second downturn. we solved the credit market problem. overall the story is very positive. i suppose the question is, we have momentum right, but how. -- how long does it last? a tenuouse based on sample size of a study that shows safety and the beginning of potential efficacy. mark: i agree that the market seems to be getting over excited

by the news. thing, more important even before the news came out, we traded positively. it is the cherry on the cake. the market already made clear we were willing to stomach some of the virus pain because policymakers will pump liquidity into the system. asset prices will do well. the real economy is in a bad state. there are many people suffering horribly in this situation. however, financial markets are propped up by policymakers. that is important at the moment. i do not think the vaccine hope was hyped in the short-term. that is an area that will cause disappointment. it is only if we get material negative news on the virus, the second wave comes back and it is more infectious or stronger than before, or if we get a severe breakdown in u.s.-china. methods putmproper

in place, not just threats. kospi we are seeing the gaining ground, the highest level since march. has beenthe kospi doing well, gains of more than 30% since the recent low. we had a guest earlier talking about how she really liked taiwan. are we going to see these economies that have gone well relative to other countries and managing the virus outperforming? mark: i think we have been seeing them outperform. the kospi has been doing well. it is a little bit of a haven because it is tech-focused, which is more resilient and doing a better job. taiwan is the perfect example of a virus haven. i wonder if we are getting to a stage when we are getting more positive overall. is it the laggards that are now catching up? countries that have been seen as

most vulnerable and suffering the most. the european stocks had an incredible day yesterday as the package came through. they are the ones that have been the most beaten-down. economies are starting to reopen. further ahead in the virus yet there are more discounts in europe. policymakers in europe have come to the table as well. for is what i would go rather than the ones that have already been [indiscernible] latestwe are getting the daily tally when it comes to the china coronavirus cases. china reporting six additional coronavirus cases may 18 on top of three local virus infections in hubei province. about 100 million people or more in the northeast of the country are facing a renewed locked down

to prevent the second wave of cases. with china i thought it was interesting we have the gauge of demand almost at pre-level -- pre-virus levels in china. what does that tell us about recovery, and is it a foolish indicator for chinese recovery? mark: it is separate. it is a partial confirmation we are seeing this increase in demand for commodities again. it was not just oil. one of the biggest themes since thursday has been a surge in industrial metals. we saw a massive move and iron ore, aluminum, silver, and again on monday. said they were working on infrastructure projects. we'll commodities are buying into this enthusiasm. we saw that before the most recent comments. i think oil has more topside. they shut down supply in the

u.s.. it was more rapid than people anticipated. china is increasing its stockpiles. it is confirmation, but i would not say the oil surge confirms the global economy is recovering. in this case they happen to be correlating. oil has more topside and there was a more positive narrative. always important to get that context. let's check in on markets. a surge at the start of trading across asia. major markets trading. thes take a look at some of movers with sophie kamaruddin in hong kong. what you watching? sophie: i want to highlight softbank group shares in tokyo. share buyback plan and speculation over a t-mobile stake sale. a sale ofwe could see up to $20 billion worth of t-mobile shares.

this news on the back of the conglomerate that has seen the worst losses in its 39 year of $17.7fter a loss andion, including wework uber. revealing a strategy for the broker after it saw its first loss in five quarters. 10%.r is seeking 8% to releasing this at investor day. mitsui shares. the bank says it will reduce headcount by 6000 through attrition in three years and reduce holdings by ¥300 billion in the next five years. shery: the federation of hong kong industries joins us to

discuss the prospects for the territory and grapples with recession. and what looks to be the seventh straight month of rising jobless numbers. xi jinping chooses to take a different approach to the trumpet ministration and pledging to make any coronavirus vaccine universally available. this is bloomberg. ♪ this is bloomberg. ♪

>> you are watching daybreak asia. confirmed new cases of coronavirus in the u.s. at 1.2% monday to 1.5 million. the lowest daily increase since the middle of april. a vaccine is showing, seeing signs. governor andrew cuomo says western parts of the state including buffalo can reopen thursday. germany and france are backing a

500 billion euro fund to help the european union survive the worst recession. emmanuel mock -- emmanuel macron and angela merkel to distribute billions to member states based on their contribution to the e.u. budget. it is a major step to bolstering the bloc without raking rules over borrowing. >> europe must stick together. this is about rapid economic recovery and therefore we want to set up a temporary fund in the region of 500 billion euros, which will be from that you budget. not a credit, but budgetary expenditure provided to the most expensive sector and region. asia'swhile two of biggest economies fighting to shore up growth. indonesia ruling out easing of lockdown restrictions as cases rise and is banning travel.

billion warned its $277 relief package fall short by failing to deliver an immediate boost to the economy that was slowing even before covid-19. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am karina mitchell. this is bloomberg. shery: chinese president xi jinping promising to make any coronavirus vaccine universally available once developed, reaffirming beijing's support for the world health organization. a way toe part of defuse criticism of his government's response. >> the virus does not respect borders. we must increase international cooperation. mankind is a community, we share a future. solidarity and cooperation is our most powerful weapon for defeating the cut -- the virus.

shery: tom mackenzie has more from beijing. is this xi jinping trying to make amends for china's role in this pandemic? tom: to some extent. seemed to agree to an independent investigation into the coronavirus, which is pushed by the likes of the e.u., u.s., australia and by allies of china like russia. onceid they agreed that the pandemic has cleared up, and it would have to be led by the world health organization. there was also a line on making sure the vaccine developed would be available as he described it as a global, public cure. the other initiative xi jinping announced in this speech to the world health organization was an additional $2 billion over two years to help countries support

them in their fight against this virus. a bit of flexibility from the chinese side. they held the line on taiwan being an observer. essentially taiwan backed off on that. that is something china pushed back on very hard. they are slightly more flexible in terms of the question as to whether or not they will allow this investigation. in the meantime, contagion fears have resurfaced in china. officials are taking a tough line. we are getting details as to the locally transmitted cases in jilin in the northeast. 0 new symptomatic and a tomaticatically -- asymp cases all in jilin or hubei.

108 million people in that province being locked down. transport links, trade buffers. tens of thousands of people have been quarantines because officials are very concerned about this cluster of infections and they want to clamp down swiftly and avoid a second wave. people see how effective it is going to be. is anxiety at the local government level. it points to the situation other countries will face when they try to reopen their economies. it is very challenging. tom mackenzie in beijing with the latest. coming up on daybreak asia, hong kong's hang seng index given one of the biggest rebounds in its history, opening the door to alibaba and others.

the secondary listing has been long awaited. we explore the implications. this is bloomberg. ♪

index willhang seng allow it to incorporate chinese internet giants such as alibaba. a move to shake up the index. one currently dominated by financial services and conglomerates. joining us is investment head of research banny lam. give us your initial reaction. how significant is this for the hong kong capital market? banny: it is quite positive for the hong kong capital market. economy stocks have a high valuations and growth.

these companies entering the index will enhance growth momentum, the whole index. that will not only increase their market cap, it will increase investments. overall, everything is positive. in the future you will see more like ipo's in hong kong. going exactly, that was to be my next question. could that flood local share sales by u.s.-assisted firms? banny: yes. this is one of the beneficiaries. you see lots of investing in the u.s. now. lots of pressures from the u.s. government. kong, a greathong thing to do. how do you track numbers going

back? you have a chance of going into that index. they will increase momentum of stock prices. that is the interesting thing. haidi: do we see temporary downtime by blue chips in the meantime? banny: yes. it will have a short-term impact. alibaba has a mixed quarter coming in. you have to adjust back some of the heavyweight stocks. i would say traditional companies like banks or hong kong properties, they are under big pressure because they have to reduce the waiting. adjustments,fter

the whole index will be having a lack of diversity. we are helping investors to diversify their portfolio. it is a positive for all the stocks in hong kong. how attractive is hong kong as a listing destination now? we have seen lots of missed opportunities in the past. alibaba, for example. marwuee -- marquee name to take advantage of this. hong kong going into 2020, the second half, is not the same, appealing environment we saw even two years ago. even without coronavirus, hong kong have the protests. thehong kong stock market,

ability to raise money is the same. the money is still coming in, coming out. investors are investing in hong kong. there is a positive view on the development of the hong kong capital market. also, an equity market in hong kong. also, the ability to have a listing here and have a chance to go into those indexes and get more investors to buy your stocks. 5% weighting cut overwhelming? it is conservative. should they gone -- should they have gone to 10% right off the bat? banny: the hang seng index company would be quite cautious

to set the cap. from a risk management they areve, i think new, the economy stocks. sometimes i think they have to take a cautious move to set the cap first. but in the future once these stocks mature, they are more stable. it will lead to a higher level. that could be future developments in the index. always great to have you with us. head of research with us there. let's get you a quick check of the latest business flash headlines. the ministry to overseeing the collapse of virgin australia airline, receiving more interest than expected.

deloitte reviewed offers over the weekend and said they have well-funded parties with strong credentials in aviation. bain capital, indigo partners. final binding bids by june 12. deepening the relationship as the chinese carmaker rides out the impact of the coronavirus. ehey have already joined rid sharing. the pandemicsays has had impact, but its annual sales target of one point 4 million vehicles will not be affected. asian economies are best positioned to emerge from this crisis quickly? this is bloomberg. ♪ ♪ ♪

♪ there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us.

>> risk on among markets trading in asia right now. let's get a check of the markets. on, indeed. asian stocks gaining ground with heavy volume. japan leading gains tuesday. softbank among the biggest booths. a t-mobile sale weighed against its profit loss. i want to check on korean travel and tourism stocks, which are climbing. inean air jumped the most eight weeks as travel restrictions are being lifted this month. china and south korea opened up a tightly controlled traffic corridor between seoul and 10

chinese regions including shanghai. checking on treasuries this morning. yields near a five-week high ahead of the 20 year option wednesday. aussie benchmark yields nearing 1% by westpac. jp morgan downplaying the potential of breaking above this level. in the commodities space, above 33 before the expiration of june contracts tuesday. holding losses after retreating from a four-week high. while rising virus cases may be a secondary issue for investors, we are looking ahead to china's national people's congress friday. also indonesia and thailand to cut breaks this week. as lockdowns ease, the focus will shift to the type of recovery we will see and which economy emerges first.

is it a case of first in, first out when it comes to the quickest recovery for this area? i think it is most at risk. if you think about which economies will recover, there are three factors. how exposed each economy is to the global recession, how effective they have been, and policy room and easing we have seen. fourn asia, there are groups. group one consists of china. out when been in and it comes to the covid-19. [indiscernible] because of domestic manned, it has been underway. the next group in the recovery path will be philippines,

indonesia and india. these tend to be demand-oriented economies. we expect them to recover after china. the key thing is in terms of institutional response and whether they get covid-19 under control. the group which will recover slower will be thailand, malaysia, hong kong. these economies are external-oriented. an economy like thailand, singapore and malaysia, they have lockdown measures which will affect the mystic demand. -- domestic demand. shery: let's talk about indonesia. cutting rates to match an all-time record. i want to start with a chart for the benefit of our bloomberg viewers. this goes as far back as 2005. the majority of economists

expecting the cut to take it to 4.25%, the lowest on record. we know indonesia among the economies that do have the fiscal space and monetary policy space to keep easing. to what extent will that be effective? particularly when travel restrictions continue to weigh on services and tourism, key to places like indonesia and thailand? considerhink if you [indiscernible] the reality now is that policymakers are fixing to support the economy. get easing policies to work. we do not expect these policies to turn around the economy quickly until covid-19 is completed. they have to do something to protect the downside. in that context i think these

policy measures will help. that is the reason why we are expecting this and the second quarter of this year. widendecided they will the fiscal deficit to 6.2% of gdp. pboc: when it comes to the in china what we see more reductions? we are getting loan rates this week. we know already the rate has been reduced in april. when will those cuts slow into the real economy? that is an issue and a challenge we see not just for china, but for asia. on the rates front, we see more cuts. that said, most of the policy theng burden will come from

50 -- fiscal policy side. if we look at what policymakers have done in china, they seem to rely more on fiscal policy easing rather than the monetary policy front because of the private sector. the gdp has really risen in china. policymakers probably do new -- do not want to be excessive on that front. just over the weekend we have also seen policymakers to efforts to 14.4% of gdp. listing on the policy side will come from the fiscal policy. shery: we are headed for the launch of the national people's congress this week. what happens to the gdp growth target. if they decide to drop it given

the unusual circumstances around the pandemic, how will this guide officials and what they should do over the next year, given this is still a state-driven economy? deyi: you have to look at policy rhetoric. [indiscernible] i think policymakers will be dropping the forecast. this year because of the impacts of covid-19, generally across the globe as well as in asia and china, growth will be affected. from a policymakers perspective, it is how to ensure in the job market there is job security. if you look at policy measures undertaken, a lot has been focused on helping to keep small businesses afloat, as well as to

keep jobs still in the market. deyi tan, thank you for joining us. we have breaking news crossing the bloomberg. nasdaq will cut rules about listing chinese listings. while nasdaq will not cite chinese companies specifically, china's ipoy -- nasdaqack of tightening ipo rules which could impact chinese listings. we have seen more economic and financial pressures coming from the trump administration against those including halting federal dollars going into some chinese stocks. hong kong unemployment set to grow for a seventh month as the economy struggles with the virus

pandemic and continuing political unrest. we discuss this with daniel yip, chairman of the federation of hong kong industries. this is bloomberg. ♪ this is bloomberg. ♪

shery: we are hearing a response. the trade minister speaking to

reporters, responding to tariffs on australian barley in china the next five years, tariffs up to 80%. they say it concerns us deeply, looking at the best way to appeal the decision. we are hearing from the australian state government, saying they see the barley 200ff costing incomes million australian dollars. consult thewill industry with state commerce and talk about the best way forward. expectations are that australia will be launching an appeal with the w.h.o. on these antigovernment duties in australia and barley for a period of five years. >> in the u.s. fed chairman jerome powell confirms he is ready to use the bank's full range of tools to leave the rate near zero until the economy is back on track.

ahead of virtual testimony to the banking committee he promised strong support in challenging times though any actions are part of a broader public sector response. powell will speak remotely tuesday morning. president trump again championing a largely unproven drug as a treatment for covid-19 saying he has been taking a for 10 days. he says he has been medicating with hydroxychloroquine, despite his own government's warnings it can cause serious side effects. this news after mike pence's test secretary tested positive for coronavirus on may8. minister resumes later, almost two years after he was first charged. the last session was a in march when they said they may had been -- have been exposed to the coronavirus. chargesves 25 of the 42 he faces for his alleged rule in the scandal. he may have received hundreds of millions of dollars in bribes.

skipping china's most political -- important political event this week. the billionaire has been a leading figure at the annual meeting for beijing where leaders gathered to debate targets for the year. ma is said to be preparing several proposals for discussion. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am karina mitchell. this is bloomberg. shery: let's turn to hong kong. analysts saying its jobless rate is expected to rise to 4.7% in april, a 10 year high. the number unemployed has gone up to 40,000 by the end of march, according to government data. joining us, daniel yip. great to have you with us. your association has members

from 32 industry groups. what are you hearing from your members? us aboutthey telling business, cost-cutting measures, especially when it comes to jobs? daniel: good morning. members, major in the manufacturing industry. a small portion are in hong kong. look at the factories from the china side. because their export market has been almost stopped, a lot of them say they delayed the order. they even delayed the payment a lot of the manufacturers are facing a tough situation. they are running out of cash.

employment -- those workers in china, they have to lay off part of their workers in order to cope with the schedules. it is temporary, for the short-term. it looks quite gloomy for the export market. but on the other hand, the local chinese markets are picking up. so that is making up some of the losses. temporarily, it is a tough situation. shery: the infections in hong kong have gone down significantly. what does this mean for your members? are they fully operational at this point? what are some of the big problems they are facing other than as you mentioned, demand? manufacturers, even though they are based in a big they still have operation, a sizable operation

in hong kong. also some supporting industries finance,stics, banks, supporting industries. in general all the industries, because export business is slowing down, and recent social activities. also, the atmosphere. the current situation in hong kong, we are struggling. having said that, i think things are improving. we see a light at the end of the tunnel. fortunately, the hong kong government has been reacting positively to these problems. they are giving out a lot of subsidies, short-term loans, to help companies. we are in a difficult situation. short-term, we are receiving different help from the government.

that will alleviate the problem slightly. where do you see the biggest pressure, sector-wise? moment, areas in the tourist and all these local restaurants, those are the biggest risk. --the manufacturing side those people in apparel, those are facing a difficult time. once they miss the season, say it is summer time and they are making swimming trunks and hats and sunglasses, they already missed the season. on the other hand, industries like electrical products, computer products, they are having reasonable business. some industries are suffering.

some are doing ok. what more can companies in hong kong do to promote this idea of resilience? after covid-19 the economic recovery is likely to be prolonged and painful. people care about the manufacturing side. the reason many people talk about the coupling or globalization. some of the hong kong manufacturers, mostly in china, i think they can see the past 18 months with the trade dispute with china and america and increasingly in china. there are several types of have changedready

manufacturing to some other part of asia. very recently. the dispute is accelerating and escalating. are considering to have a second manufacturing base in china. manufacturers i think they will rethink their market strategy. they will think about marketing tools. before it was mainly exposition and traveling overseas. i think they will think of a new way of running the business in the future. daniel, so great to have you with us, daniel yip joining us. we have another great interview later on bloomberg tv you will not want to miss. leaderan opposition joins us.

on daybreak asia, facebook says one third of all small businesses in the u.s. have stopped operations altogether. coo sheryl sandberg tells us with the social media giant is doing to help. this is bloomberg. ♪ . this is bloomberg. ♪

ofdi: facebook says 1/3

small businesses have stopped operating completely while another 6% expect to fail in the next three months. sheryl sandberg spoke exclusively to bloomberg earlier. what you said. we planned this survey a few months ago. when we first thought we were launching, three months, we expected a rosy picture for small businesses, but that is not what we found. what is important to understand, small businesses are the engine of job growth in our country. for --jobs created before coronavirus were from small businesses. along with statistics you just shared, 11% expect to fail. a number that jumped out at me, more than half of small businesses do not expect they will be able to rehire the employees they laid off within a reasonable period of time.

that means we have challenges cut out for us in getting america back to work. >> small businesses account for 2/3 of u.s. job growth and the vast majority of advertisers on facebook. talk to us about how crucial they are to facebook as a constituency and what small businesses mean for facebook 0trategically area sheryl: 16 million small businesses use our free tools and services every month. 8 million are advertisers. company and we are lucky. our focus is not on our own business, which is doing fine, but on helping small businesses. we launched a $100 million fund. half of that earmarked for minority women and veteran-owned businesses. our focus is on their business.

we want to help small businesses survive because we all have a responsibility to do as much as we can through this crisis. emily: i know a lot of businesses have been getting creative using technology, the web. facebook has for some time been working on bumping up the e-commerce experience on the platform. i wonder if you are accelerating those efforts to help the small businesses, whether shopping on instagram or whatsapp. will have will and we more to share with updates tomorrow in commerce and other things. what we are seeing small businesses do on the platform is incredible. there are so many good stories. there is a bookstore out of missouri. bookstore, forty black children to see books and get books about their own history, and see positive role models that are not written about enough. they really did everything in

person but now they are doing classes on facebook online and pushing online sales. they have morphed a thing totally off-line to an online activity. there is a grooming company out of kalamazoo, michigan, taking their expertise, they make men's grooming supplies, and helping a local distillery make hand sanitizer, helping them make it and donate to hospitals. the resilience of small business is so apparent. businesses, despite all the bad stats we shared, they are still optimistic over the long run for the future of their business. that is hope we all need to hang onto. sheryl: you are highlighting challenges faced by female entrepreneurs. can you share thoughts about how the pandemic is affecting female entrepreneurship and women in issues, given childcare schools being closed and how that might be a double whammy

and make the situation even harder on women than it already is? sheryl: we talked about this so many times, but women work a double shift before the coronavirus. the data my foundation put out last week is showing clearly women are putting in a double double-shift. the average heterosexual straight couple right now, the woman is working 71 hours a week doing childcare and housework, in addition to what is often a full-time job. men are doing 50. that is a gap of 21 hours a week. 21 hours a week is a full-time job. we talked for so many years about what has to happen in the workplace has to happen at home. isn't it a great time for men to lean into their families? it is a huge burden for everyone right now. to take as much of it as they can so women are not completely burnt out, which we are already seeing. plenty more coming up on

bloomberg markets. we will speak exclusively to the ceo of electric carmaker faraday future. this is bloomberg. ♪ s is bloomberg. ♪

>> it is not :00 a.m. in beijing, shanghai and singapore. welcome to "bloomberg markets: china open" our top stories. the world health organization sang any vaccine success will be shared by all. president xi says cooperation is vital. tend toward 5ons million with 90,000 deaths in the u.s.. 100 million people are back in lockdown in