♪ shery: good evening from bloomberg's headquarters. i am shery anh in new york. haidi: and i am haidi stroud-watts in sydney. welcome to "daybreak australia." china rebuffs u.s. criticism of his virus response saying washington is shirking its responsibilities and initial optimism over a vaccine is draining away. global cases approaching 5

million. brazil is the world's pandemic hotspot. infections in india rising at the fastest in asia. the fed chief is staying neutral on u.s. aid, dodging senate attempts to make him take sides. he says more help would be needed but stopped short of a full endorsement. shery: we are seeing further afterre of u.s. futures stocks fell to the last part of the trading session. we have had a strong start in week but there was a report on moderna's vaccine study did not produce enough critical data to -- ss its success. there are similar patterns with drug makers like gilead. we saw the selloff. the s&p 500 fell for the first time in four sessions for the nasdaq was outperforming at one

point but turned negative. look at what oil is doing, seeing wti above the $30 a barrel level after closing at the highest in nearly two months. we have june futures expiring tuesday. a month ago when may rises plunged -- prices plunged, we are not seeing that reaction this time around. there is more signs of markets slowly rebalancing for let's look at how markets in asia are setting up. investor optimism could be deflated. kiwi stocks opening to the dance like, to snap a two-day gain in wellington into a session that brings up policy decisions from thailand, earnings from xiaomi and lenovo. google watch the boj ahead of the emergency meeting on funding

for small businesses and china expected to hold after last cut very weis point will get pulmonary sales data for australia. forreliminary sales data april in australia. imposed duties on barley exports from australia. more true troubles emerged, unsurprisingly is virus concerns and the latest fund manager survey by the -- two thirds believe we are in a bear market rally. while there was a jump in global growth expectations, 10% of those surveyed expect a v-shaped ofovery with a second wave infections being debated -- being the biggest risk. haidi: which showed optimism over a quick virus vaccine has

drained away with questions about the initial trials of moderna's vaccine. early they said they were safe and data shows immune response. early nature highlighted by the health publication was enough to put a pin in investor hopes. let's go to our opinion columnist. this is not new information. if you are accustomed to reading this early clinical trial data, this should not come as a surprise. >> no. reading the biotech press releases is an art and science in itself. you don't always get as much data as you want or need and you need to put it into the context of what sort of work needs to be done in the future, how much data is revealed and the specific context for the data. in this case you had an entire market trying to react instantly

to very new data, that looked at first glance white exciting. when you take a closer look, eight people is vanishingly small. and that note about protective antibodies, we don't know if that level of antibody -- that is actually protective in the real world against infection. we don't know if people who recover in the long-term are vulnerable. the actual baseline they are comparing against is not something we know has any real relevance. the bottom line is something people should have known from the start which is the trial with a few dozen people it is only intended to look at safety as opposed to actual efficacy. tell you mucht about the much larger trials to

come. i can only tell you so much. gileadit reminds me of and remdesivir. what are we seeing in the treatment funds because the president is saying he is taking hydroxychloroquine and. do we have any preventive at this point or anymore progress in the treatments? there is always ongoing progress, but when you talk about a hydroxychloroquine, there is no solid evidence it has an effect against the virus and even less when it comes to its usefulness as a prophylactic. of, usingis evidence settings inf hospitals, it can mess up your heart rhythm. whatever the data that president

is acting on, it is not something reflected in the wheel -- the real world record. remdesivir, similar situation with initial excitement about the positive trial but closer into the data, you have a medicine that in the trials, it was looked at to hope to get people out of the hospital re or somethingu to change the trajectory of the virus. that is why the stock dropped off. you have to look at the context of data and what it does. hopefully in time we will get a vaccine, clinical antibodies that can be effective treatments, but we have to wait to get real verification how real they work. looks like the market getting ahead of itself again.

max nielsen with the latest. we are getting a look across the bloomberg, hearing from the new york -- new south wales state premier saying there will be no travel restrictions as of june 1 within the state. if you want to, you can go on a road trip or a holiday within the state, but nothing will be the same as before the pandemic. there will be extra planning, precautions and social distancing to be taken as well. shery: plenty more to come on daybreak asia for the rbnz 9:30 sydney, 7us p.m. in new york. jay powell takes a virtual stand as lawmakers question his stance on whether more record stimulus is needed. extreme behavior is on display everywhere in the market. we look through the noise. this is bloomberg. ♪

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you are watching daybreak australia. fed chairman jerome powell has dodged senate efforts to make him give endorsements, -- -- will an stephen mnuchin powell and mnuchin testified. how will says more fiscal help may be needed but stopped short of a full endorsement. china said president trump's threat to quit the world health organization is an attempt to shirk responsibility for america's failure to control the outbreak of the virus. the president attacked the organization for being a chinese puppet and said he is prepared to end u.s. support and leave altogether. beijing says it is an attempt to slander china. leader's letter is

full of mimi and possibly. it tries to mislead the public, to slander chinese efforts to control the pandemic. this is futile. china has taken another swipe at australia over calls for investigation into the origins of the coronavirus pandemic. having put duties on barley and beef, they are now threatening to target wine and dairy. china is said to have drawn of a list of seafood and food that could face punitive measures and there could be a consumer boycott. the advice of australia -- we these australia to read original text carefully. abandon political manipulation and return to the international community. 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: u.s. stocks fell for the first time in four sessions over optimism fading with the moderna study. our next guest says there could be further economic disruption not even factored into equity valuations. joining us now is rebecca felton . great to have you with us. this reminds me of what happened with gilead's remdesivir. saw the rally and the selloff. is this sort of volatility inevitable when you have a big disconnect between the equity markets and the state of the economy? thank you. i agree with you because of the run-up to the march lows and the fact we are sitting at 22 times

the forward number. looking at the calendar, it is still a moving target. in this environment, is it inevitable we will see the biggest, strongest companies perform balance sheets the smaller ones which would maybe not exist in the next few years? weyou are spot on because as saw coming into the last several weeks, prior to some of the more cyclical companies beginning to rally, the bigger companies with the strong allen's sheets, the recurring revenue stream were the ones showing the most strength. that is one of the reasons why we had tilted our portfolios to those sectors like tech and health care. haidi: do we see more of a comeback for small caps if we

see the pickup in volatility? spiritre still cautious we have seen on the days you have had the more cyclical types of sectors rally, the small caps and even the s&p are equally weighted in that system. we are probably not out of the woods. even with over 100% of the s&p 500 having supported earnings, there is concern how smaller ,ompanies world -- will fare particularly if there is not a bigger stimulus package and if we see a resurgence in the vaccine. given how much of the economy or how many people are employed by smaller businesses, the unemployment data continues to be worse. we are out from the

november election six months and we are seeing the pandemic narrative, china-u.s. being played into the campaigning and grassroots kind of communication ahead of november. how much volatility do you expect markets to brace for going into the elections? >> we would expect a fair amount and you almost don't see much of it being discussed today, which is one of the risks we believe it is still out there. with the bill that was passed in the house last week and the dollar amount at the front of it over $3 trillion, you heard the senate republicans saying it is not going to pass. you have got a lot of partisan entrenchment going on and it is not likely the senate will us anything before mid-june. that will have folks worried that there is not something more pertinent on the horizon. willis a time party lines

start being drawn and people will have to think about what they are doing for state and local governments, many of which have june 30 at the end of the fiscal year. shery: when it comes to fundamental changes whose pandemic, should investors factor in that these resellers, we saw -- it was a really mixed bag with walmart outperforming and calls missing expect it -- missing expectations. with the new element of the post-pandemic world, which could include more margin pressure for essential workers, more cleanly -- cleaning and tweaking in a way they operate their business? >> that is right because companies that reported today did make their top line or number but missed on the bottom line because companies are having to pay more for childcare , double overtime, higher hourly

wages and that sort of thing. it is likely that will continue for some time which will keep margins under pressure. that can result in lower valuations across the board for some of the retailers and hospitality industry companies as well. always great to have you. riverfront investing group rebecca felton. our next interview is coming up, the rbnz governor joins us at 9:30 a.m. in sydney. more on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u.s. retail names next. this is bloomberg. ♪

shery: retailers have been among the hardest hit by the plandemic. -- the pandemic. we now have the latest round of earnings. let me get started with walmart. they beat expectations but they withdrew guidance for 2021. how well-positioned are they? allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. but omar tidwell. they increased same-store sales -- but walmart did well. they increased same-store sales. they are providing people what they need. haidi: in terms of forward

guidance, do we have any expectation what they think the next recovery could look like? >> it is not clear. they are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what walmart is selling. difficulties other retailers are facing, but are not selling those things that people have drawn back on buying items like clothes and other things they don't think as timely for this moment. cold seems to have -- kohl's seems to have struggled. their online sales did not. jumped 60%.ales that was a testament to them focusing on digital marketing. last month pretty much all of their stores were dark.

said theyis, the ceo can only replace a small proportion of sales lost to the stores. the stores are still pretty important to that end -- that company. we have seen high-profile bankruptcies, j.crew for example. what do we expect in terms of, is there going to be further to come or have we see most of the pain and we are focused on what the recovery could have with the reopening? marcus,w, neiman jcpenney all filed for bankruptcy. and this person thinks her company is well-positioned to gain market share. jp percent -- jcpenney is closing one in four stores. the stores are still important

to consumers. the other department stores could win over those customers in areas where jcpenney [indiscernible] shery: thank you, joining us with the latest on the retail earnings out of the u.s. we have breaking news. we are seeing that brazil had 17,408 coronavirus cases. this would be a new daily record area when it comes to the number of deaths in the past 24 hours, a new record of 1179. brazil has been emerging as a new hotspots. we are talking about their new cases accounting for 13% of new cases globally in the past week. now we see the new records, whether it is new cases or

deaths around brazil which has the third largest number of cases in the world. now the business flash headlines. haso as outperform -- baidu outperformed. signaling a return to growth this quarter. sales fell 7% to $3.2 billion in the march quarter. they are forecasting revenue growth rate of -- they have been diversifying ad rival -- seats -- putting extra says putting extra seats quickly to airfare soaring. social distancing on a plane is impractical and could mean a jet flying with just 22 people on board. tickets could be a or nine times more than before the pandemic.

5%tas is currently flying capacity domestically and 1% internationally. u.s. airline stocks reacted weakly as demand for travel could be picking up. southwest airlines says bookings are starting to outpace cancellations for june while united is producing cancellation rates and fees moderate strengthening of demand domestically and on international routes. delta has seen a slight bounce in leisure bookings. haidi: staying on the complete destruction with travel demand, we are awaiting the latest numbers from sydney airport, announcing april domestic passenger numbers saw a contraction of 70%. international passenger flow for 96%. was down it makes sense given we have

just seen qantas for example running one or two, a handful of flights a day on the bare minimum flights with travel restrictions. congress is calling on jay powell to settle the argument over when and how much of the net -- next round of fiscal stimulus should be. his outlook is next. this is bloomberg. ♪ erg. ♪

haidi: you are watching daybreak australia. global confirmed coronavirus cases are approaching 5 million with fatalities above 320,000. brazil is now the pandemic hotspots. infections in india are rising at the fastest pace in asia. deaths linked to covid-19 in the u.k. surpassed 40,000, making it the worst -- the first country in europe to reach that threshold. virus cases in india have topped -- as the nationwide lockdown is eased. india is among the nation's worst hit by the pandemic with a

28% rise in cases since last week. singapore will allow more businesses to reopen from june 2 for the bombing 75% of the steady-state economy will be back to work. from june 2. that means 75% of the city state's economy will be back to work. the bank of japan will be meeting and could talk about a lending program. they aim to show practical stances for business and follow-up meetings of this fed and the -- the fed and the ecb. european union offering a low-quality trade deal as talks between lenders and brussels to send into -- they say the u.k. is unworthy of a fair agreement has told their counterpart in brussels to think

again. michel barnier a once -- says k. once the benefits without being a member. a cyclone is expected to make month on your the bay of bengal wednesday. -- near the bay of bengal wednesday. been difficult because of the lockdown and social distancing in the coronavirus. federal reserve and jay powell stuck to his guns -- reserve chairman jay powell stuck to his guns on capitol hill, dodging attempts to get him to take sides on how big the stimulus should be. kathleen hays joins us. really jerome powell has been vocal for a federal reserve chair when it comes to fiscal stimulus. what did he say?

kathleen: he is in a delicate backgroundse of the for the quarterly assessment of the cares act, helping workers assess -- workers displaced by the virus. republicans are pushing back against democrats pushing hard towards more stimulus. don't wait to see what has happened with the pieces in place for let's get more. jay powell was called out on the times he has said something more will need to be done. if you think he agrees with the democrats -- is he saying he agrees with the democrats? >> i want to call out the risk, long-term risk to the economy. that is what we are doing. we could have to do more and congress may as well. : there is a good example of how a fed chair tries to make a point, which is you think the job displacement, it will take longer to bring people

sow the work, this could seeds for something worse like in 2008. it could be something approaching a depression with long-lasting consequences. he did repeat when asked about this something he said a lot. it has a lot to be unemployed so long that you disconnect from the labor force and it becomes a problem that will take a long time to correct. of lasting damage to the economy, to the labor force because of long-term unemployment and unnecessary avoidable insolvency, those things create a risk. kathleen: unnecessary insolvency related to bankruptcies. jim bullard has spoke about this

, if people don't get back to work. secretary ofin, the treasury, said he got pushed back from republicans. he continued to argue, go towards reopening, get the economy on track. he said this could cause permanent damage. upwill see, but let me sum by saying it doesn't help either side for a republicans or democrats. they will have to battle it out and see who wins. you will be speaking with someone who has also demonstrated willingness to do whatever it takes when it comes to getting the economy back on track, the rbnz governor. what are the issues for him and what will you be tackling in the conversation? kathleen: he is an interesting central banker. he went into the meeting of the

reserve bank of new zealand last week with everyone wanting to hear about what he had to say about negative rates. if they were to move towards that, it might not be until spring next year. it is one question what would make you move, what are you watching? his assistant the runner spoke to tracy withers -- a assistant governor spoke to tracy withers. he said after raising the fiscal stimulus last week, they almost as the them out of bonds budget deficit grows, new zealand also embarks on spending plans, steps to get the economy righted from the lockdown which have proved effective for them. he says the amount of fiscal stimulus doesn't need to be changed after the release of the budget must week, but that is another thing i want to pursue because there is

banks and economists and many others thinking having doubled it, it would be surprising to see the rbnz race that limit on how many purchases they can buy again. a lot of things to ask him about. haidi: looking forward to that. kathleen hays. you will stay tuned for the interview in just about an hour's time at 9:30 in sydney, half past 7:00 in hong kong. it is hard for the u.s. to begin to reopen from the lockdown. one person says that doesn't mean it should relax guidelines. she talked about how reaction has changed. adrenaline rush of the ambience -- ambulances have diminished everyone has not changed is the demand for icu beds. beds, demand for the icu

what does it signal to you? is it a larger body of older people or is it across all age groups? >> the majority of the ages at hopkins that are impacted are in the 30 to 50-year-old range. it is spread across all ranges, but that was very surprising to us to see it was not just the elderly population. >> you make a point saying reopening is not relaxing, but how do you change perception, because people will say, we are over the worst. i can get back to normal life. is a good question. you have to have a good message about the balance between science and economics. and not have it as simply

political all the time. if you notice, that is what we see quite frequently. but the things that have worked are the masking, the social distancing, that part needs to stay. are people understanding? or are people refusing to do that? i don't know what your perception is in what could be done better. >> people are relaxing. out the other day, i noticed people without a face mask and that was not the way it was a few weeks ago. while i don't want this to be an doom and gloom, i want people to really understand that in order for us to stay ahead of this curve we have been working so hard on, we need to keep the masks on. i saw your segment about uganda where they are giving masks to

children. that is an important message. we need to keep those messages going. social distancing, washing your hands, it is important things. we are in a different place but not out of the woods. the nurse manager at johns hopkins hospital. the johns hopkins school of public health is supported by bloomberg philanthropies. australia's ties with china are under strain as the two sides spar over the virus outbreak. this is bloomberg. ♪

shery: let's see how markets are setting up. sophie: taking a look at the board, futures under pressure, dob -- wti holding under a barrel but the yen extending a two-day decline as traders gear up for the emergency meeting friday. on friday $1.3 billion of yen futures were treated in a 10 minute span indicating a buildup in bearish positions. let's check on australia. you have futures suddenly lower indicating losses after the asx 200 closed at a march 11 high. we have bonds edging higher with a 10 year yield off two basis points while the aussie is

gaining ground. a two-day qe holding drop. optimism may be fading -- a2 milk was among the worst more australian companies are being targeted by china. australia is working with its companies. more than one third are unaffected. haidi: we will get more on the escalating tensions. china could be considering further economic retaliation over canberra's calls for a call into the room virus outbreak. paul allen has been watching this. what else could this affect other than beef and tariffs on early? -- barley? paul: chinese officials have

drawn up a longer list of goods. seafood,dairy, also oatmeal and fruit, all of those subject to tariffs or any other delay you care to imagine. this is according to people familiar with the matter who didn't want to be identified. -- trade minister saying china's foreign ministry says that hopes australia and china can meet in the middle and take measures to improve the lateral relations and deepen mutual trust. all of this follows from tuesday -- from -- no mention on mining exports such as iron ore. could cause pain if they went that far. unveiling new

measures for when air travel resumes. how will the social distancing on planes work? paul: it is an oxymoron. if they observed that 1.5 meter rule it would put 22 people on a320 and aireat tickets would have to raise by a factor of eight or nine. it will never work. they have unveiled fly well safety measures. that means staggered boarding and disembarking, contactless check in. they will distribute masks at the start of the flight although it is not compulsory to wear them. will be distributed and passengers asked not to move around the cabin. the risk of catching the virus on a plane is low because the air run through hospital grade filters every few minutes and takes fresh air from outside and passengers don't sit face to

face her the back of the seat is a barrier. so qantas is offering attractive things when things get going and hope to get the cash burn that is $26 million a week down by the end of june. shery: if you are away from a screen, you can find in-depth analysis and the big news makers on bloomberg radio, now broadcasting live from our studio in hong kong. listen through the app or bloomberg.com. this is bloomberg. ♪ ♪

shery: sony plans to take his lucrative finance unit private for $3.7 billion to inject more stability into electronics and entertainment. it is warning profit would fall as much as 30% this fiscal year as the coronavirus bites into consumption. it has been hit with sales staff unable to pitch customers directly during a pandemic. apple is said to be shifting the production of its air pod headphones as it looks to lessen reliance on china. apple has already chosen manufacturers and hopes to have the first batch ready for shipment in july which means

relief to consumers late summer. mass production will begin around the same time. walmart shares opened strongly but sank as virus stockpiling -- same-store results rose 10% in the u.s. and the fastest pace in almost two decades. resultseat forecast so show how consumers shifted from discretionary to staples during the coronavirus lockdown before normalizing as the quarter played out. investors are looking at infrastructure. while deal activity did slow, capital raising does continue. digital culminate reportedly sought billions to raise second funds focus on such debts. in april blackrock secured $5 billion for infrastructure funds

and with the market implication as well as liquidity issues, j.p. morgan is putting together a roadmap there to deploy billions of dollars as well. looking at the u.s., borrowing costs at historic lows, unemployment at why we -- i watery levels. there are prospects of a package to drive a building boom. they have a 40% rating in the u.s. market. one alignedy this with president trump's infrastructure plan and is more than 50% weighted utilities. joining us now is the co-ceo of capital management -- sustainable infrastructure investing. i am curious about one of the things you mentioned in your notes, shifting perceptions of risk. has there been a duplication

given the volatility we have seen in the market, or are investors more than ever drinking the kool-aid of this being a fed back liquidity backed rally? thehere is a perception in change of risk. -- change in the perception of risk. but investors don't have much options. with bond yields where they are the bond market is not attractive. so where are they going to put money that they have on the sidelines? the stock market has been one of those places. the issue that i think is the purchase -- i see is the purchase of stocks has become disconnected from the earnings-per-share. investors are assimilating to a new normal but larger

institutional investors are looking for a more defensive investment that is uncorrelated to the overall market. that is where i think there has been some change. there is no value in the market right now. earnings are going to decline substantially over the course of the next year because of the shutdowns and fall off in global trade. so where can you find value? that is the question. where can you find value in terms of the spaces you operate in? david: we are an investor in renewal bill -- in renewable energy. we do energy efficiency and other renewable modalities. these are long-term contracted assets, meaning they have contracts in place to sell all of the electricity they reduce,

generally utility or the disparity. these are essential service providers, meaning they cannot cease to provide their service to the public. serviceed is a critical without which the economy could not function. we think there is a lot of value in that sector. we think renewable energy infrastructure has turned out to be a truly uncorrelated asset class and has produced test performed extremely well in this pandemic environment. shery: what about oil? really it has been a nonfactor. generally when we buy projects, they have long-term contracts with set prices. we know what the price we are going to get for selling

electricity. the contracts are 25 years in length. we have this set in advance. with regards to oil, oil accounts for less than 1% of electricity in the u.s. there is no real effect. where there is an effect is a natural gas which accounts for 38% of u.s. production. natural gas prices have fallen because of weaker demand. of i -- this is a byproduct oil drilling. if there is no drilling for oil because of low prices it could and higherrtages prices going forward. we don't see it as a major affect. i think people are looking for certainty in terms of energy prices and renewables fits the bill there. shery: we are heading to the

national people's conference, watching it this week. what are we in terms of china taking the need -- the lead with renewable energy post-pandemic? obviously china has been a big player in all forms of the energy market, manufacturing, renewable energy, goods, solar panel converters and other projects. they have also been a builder of coal fired power plants. al is on its co last legs and china will tilt in the direction of renewable as most countries have. share,all right, david thank you. we will have to leave it there. let's take a look at what markets are doing because we continue to see the weakness we

saw on wall street playing out across asia. kiwiocks are down .1% -- stocks are down .1%. we have the rbnz governor to speak to us later this morning. sydney futures are down 1.5%. we expect the leading index to come out in about one hour to two hours, so watch out for those numbers. we are expecting japan's march quarter machine orders. we will bring you those numbers as we see the risk off sentiment. the optimism over the potential vaccine fading today. looking ahead a great lineup of guests joining our show. the rbnz governor read also the hong kong secretary for labor and welfare and exclusive interview with singapore's minister for trade and industry and one founder and ceo.

this is bloomberg. ♪

haidi: a very good morning. i am haidi stroud-watts in sydney. we are counting you down to asia's major market opens. shery: welcome to "daybreak asia ." china rebuffs the latest u.s. criticism of its virus response, saying washington is shirking its responsibilities. optimism over a vaccine may be draining away. global cases approach 5 million with 320,000 deaths. brazil is