ask about saving up to $1500 on your installation. shery: good evening. we are counting down to asia's major market open. i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. welcome to daybreak: australia. for the coronavirus weighs on investors' minds. s&p 500 stocks were 25% lighter than the average over the last month. president trump warned the u.s. could pursue a complete decoupling from china, his

strong's comments yet on ties to beijing. debates travel ban's. job numbers underlie the impact on the economy. do a quick check of trading atarkets are the moment. u.s. futures are flat after stocks ended mixed in the regular session. we had markets really searching for a catalyst. sentiment was a little bit pressured. trading at u.s. weekly jobless claims above one million for the 13th week. andad gains in energy consumer staples on the s&p 500, but at the same time, real estate industrials weighing on the index. the nasdaq composite did gain and ended at the highest level in a week. the dow lost about 40 points. take a look at what oil is doing. prices finished higher in the regular session. it is up and trading above the $38 a barrel level.

we did get opec-plus looking to make up for mixed production cut targets, boosting prices to the highest in more than a week. let's see how things are shaping up for the asian markets now. we are looking at a mixed session for this friday. volumes sitting out over the course of a choppy week, giving the ongoing dislocations and question mark tsarnaev the stimulus we have seen is enough. qe stocks under pressure for a second straight session. when it comes to the outlook for asia, you have indonesia's more easing on a weak growth outlook. but taiwan held onto central bank rates. we have reopening's continuing, with the next phase kicking off in singapore and japan. we are watching airlines and travel related stocks on the back of that. that's check-in on gold. stock prices, we did see them

dollar strength stayed near a 2012 high. spot gold on the sidelines with investors waiting for fresh stimulus. japanese inflation data for the yen set for the second week of gains on renewed haven demand. the aussie dollar holding just ahead of retail sales expected to have jumped in may. the offshore yuan also seeing a race. with thes up elsewhere ongoing selloff for chinese bunds and the rising chinese money market rates on liquidity concerns. haidi: president trump has fired another shot at china in a tweet that was meant to qualify robert

lighthizer's testimony on wednesday. president trump said, "the u.s. certainly does maintain a policy option under various conditions of a complete decoupling from china." we are joined now for some context on the story and the latest from a day in washington that was heavy and rhetoric. emily wilkins is with us. what exactly was trump clarifying around the u.s.-china ties issue? emily: i think it is important to step back and look at the bigger picture, because i feel like so often we hear about this little back-and-forth between the u.s. and china and the upgrading tensions. this is not the first time trump has suggested stepping away from china. last night, he knew that he might end of trade deal. yet we have seen officials continue meeting with china, continue defending this deal. today you had mike pompeo meeting with chinese officials, saying they are committed to fulfilling their obligations under the trade deal.

and u.s. trade representative robert lighthizer said just yesterday that decoupling the two largest economies is not a reasonable option, and he defended the trade deal, saying that china is going to honor their commitments and obligations. shery: we also had drama playing out in washington with john bolton's book talking about president trump and how he is dealing with china. how is the president reacting to those comments that are expected to come out next week, although the president is trying to stop that? right, trump is reacting mostly how you would expect them to. he is denying the allegations in the books. he has called the book a complete compilation of lies and made up stories. the justice department has filed a lawsuit trying to block the book. trump is pushing back on bolton's accounts that we have seen here, and he is denying

almost everything at this point. it is really interesting, parts of his book claiming that the president of china's policies, everything through the lens of the reelection campaign in 2020. what are the political applications of this book? emily: oddly, that remains to be seen. before coronavirus, impeachment seemed to dominate the news, and now in washington, it feels like that was years ago. barely anyone is talking about it anymore. today, speaker nancy pelosi asked if -- was asked if she would be bringing bolton in for inquiries. she said that she does not know yet, that this is something she is going to have to discuss. but you could tell she was disappointed with bolton. she said she does not want to support an effort where he should have come forward initially while the

investigation was still going on with what he knew, not be writing a book afterwards, trying to make it paycheck off of that. haidi: emily wilkins, our bloomberg government congressional reporter. coming up, california, florida, and arizona reporting record spikes in virus infections. plus, u.s. money fund assets are sitting near a record high. we will discuss the recent move out of cash and whether it is likely to continue. portia capital management joins us from fort worth next. owner michelle connell's is one of the highest rated finance professors in the u.s..

states the united continues to be a focus of coronavirus infections, with california reporting its highest single day jump in cases.

florida cases rising the most ever. hospitalization hitting a seventh straight daily record. new york governor andrew cuomo is weighing quarantines for visitors from florida, while the nfl and college football seasons may be canceled. kino says the outbreak in beijing has been contained. the center for disease control says more cases will be reported, but they will not reflect people already infected. crossees will halt all province bus services from friday, having shut down markets in beijing to halt the spread. meanwhile, the peoples bank of china is reporting credit growth. the governor says it will be achieved through record special-purpose bond issuance plus higher bank loans. he says total financing flow should top $4 trillion this year

. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery. turn to a warning, and it's not about equity levels. bridgewater warned this week for stockst decade due to shrinking corporate profit margins. even if corporate profits recover from the coronavirus, some companies will die or their shares will devalue along the way. companies are likely to come out on the other side of the coronavirus more indebted. what could that mean for equity markets and overall corporate health? for perspective, let's turn to michelle connell, owner of portia capital management in fort worth, texas. pray to have you with us. this chart on the bloomberg also showing how u.s. earnings are

completely disconnected from stocks. morgan stanley saying u.s. corporate earnings have become so disconnected from stock rises that the gap bears watching. we have seen earnings drop in the first quarter by 16%, the biggest decline since 2008. how concerned are you about this? michelle: thank you for having me on bloomberg. i really appreciate that. . am concerned about that people keep talking about the disconnect between the equity and all investment markets versus the underlying situation. year-to-date, nasdaq stocks are up 15%, the s&p is only down 3%. that seems unusual given the greatest pandemic in 100 years. we have civil unrest and upcoming elections. i think people also need to understand where part of that

disconnect may be coming from. first, we have a large amount of day traders and retail investors that are coming in. we have had 3 million investors to sign up with robin hood. some of the largest trading volumes on the retail side in history in the past few weeks. along with that, we also have a lot of short covering by investment managers that thought that a lot of the value situations were going to get had to, and they have rush quickly as the market has bounced to cover those decisions. so, combine that with the amount of uncertainty, i think there is too much more downside risk that is coming in front of us. how important is cash in this environment? michelle: i think cash is very important. i would say that for

institutional investors and also for individuals, we are going to have a lot of opportunities in front of us. even though i have done some buying on the very small pullbacks we have had, i have been more focused on raising cash for the opportunities i think we are going to have in front of us. i am starting to look at some opportunities hopefully coming after earnings reported for the june 30 quarter. if you want to stay in this environment, what is your strategy? obviously, you've got the stock market pricing for a strong economy, bond markets pointing to a prolonged global recession, so what is the new playbook? the new: i think playbook is allocation. yes, i think you want to own , those the closed stocks that have been pushed beyond

their valuation. i would consider taking some profits off the table. i think there is going to be more opportunity in the smaller mid-cap area, and i also have been starting to do some buying in emerging market areas, specifically asia and india. so, emerging markets, i suppose, all things being even, do you expect more opportunities to arise? particularly here in asia, you can see a quicker recovery given the quicker containment of the virus element. michelle: that is part of it. they have bounced back a lot faster. but i am also looking at the valuations. the valuations have never caught up with emerging area versus the united states stocks. so i combined that with the fact that the great is going to happen in the areas of emerging

markets and how you are going to have a big growth in the middle class between now and the next five years. we expect that the middle class and the emerging-market area will match the domestic markets in the five years. michelle, great for having you with us. we will have big guests on alternative investments ahead. the owner of a portfolio with nearly 3 million square feet of estate'sommercial ceo joins us later. plus, we will speak with the ceo of pag. this is bloomberg. ♪

china's ambassador to the

european union says the push to find a vaccine needs to be a global effort. he talked about beijing's effort to curb the pandemic and reiterated china's stance on hong kong affairs are in internal issue. vaccine developed a tight think is global, for the international -- development i think is global, for the international community, not my job, not your job. we cannot do it isolated. announced in a videoconference, china will, vaccine,ome out with a we will take it as a public good. for all.

of course, we will share that -- >> ambassador, i want to ask you about hong kong, because this bill has been controversial in europe. there are some institutions, including the european parliament, that say they worry that democracy is being removed from hong kong by the chinese authority. what do you say to that? kong,n we talk about hong we must keep in mind hong kong is a special administrative region of china. arehong kong affairs , and's internal affairs noninterference in chinese affairs is a fundamental principle in international law. ,o the g7 states met yesterday and the european parliament joined the motion for resolution

of interference in china's internal affairs, which we are opposed to. it is not acceptable. european you think the parliament, for example, commenting on this, members of the european parliament saying that the one nation, two system is a way forward. that is something that china fundamentally cannot agree to, something that is just for china to deal with? country, as you know, national security is the duty of the central government. european countries like the u.k., france, germany, and others all have national security legislation. yet in hong kong, there is no such legislation. mpc aims to close the

loophole. we should not look at this issue with double standards. one country, two systems is china's basic state policy. it will not change. national security is a building block for the sound up limitation of a one country, two-state system. implementationd of a one country, two-state system. the legislation will not change hong kong's capitalist system. or the lifestyle of hong kong residents.

maria: let's talk trade. yesterday, the european commission put out a white paper that does not mention china, but many interpreted it as talking about china. they worry about foreign money, too much intervention, perhaps, in european companies. do you think the investment environment for chinese companies, or backed by chinese money, has become more difficult now in europe? i have noticed that the eu issued the paper and have been studying the paper. it is hoped that the relevant eu will comply with rules. keep clear of protection is the move, and the refrain from creating new trade barriers under the pretext of subsidies. recent measures taken by e.u.

have got some chinese investors , whorned, to speak frankly are afraid that the eu is closing its doors. this is a worrying direction. china's ambassador to the eu speaking exclusively with bloomberg's maria tadeo. returning to hong kong, china's top legislative body slaps deliberations on the new national security law, moving ahead with the proposal that critics have warned threatens the city's unique freedoms. let's move to selina wang. what new details do we know about this? selina: according to state suspended ang has draft to its top lawmaking body of the national people's congress, and deliberations are beginning with a three day

session that started on thursday. the report gives little detail of the draft, but it clarifies the four major offenses. post has china morning reported that the draft law also states the central government reserve the right to exercise jurisdiction over cases in "very special circumstances," while hong kong authorities will be responsible for the remainder. that leaves it unclear as to whether or not this law would allow hong kong or's to be extradited -- hong kongers to be extradited to the mainland to stand trial. the paper also cited a source saying the law is unlikely to be passed during this meeting. reiteratedwhile, has that -- that's despite the barrage of criticism from democracy

advocates, business groups, foreign governments, and most recently a very strong statement on the g7 --from the g7. shery: let's turn to the ongoing pandemic. we have heard that the break in beijing had been contained. what is the situation there? selina: that's right, shery. china's chief epidemiologist said that the peak of the covid outbreak has passed in the city and further infections will be sporadic. but the reported infections on thursday were all people who had contracted the virus before june 12, and that the peak of the outbreak was on june 13. so he is basing this finding on a curve reflecting when patients began to show symptoms. that being said, he says beijing will continue to see more reported cases in the coming days, but it is going to reflect the past infection period. shery: selina wang there in beijing. let's get a quick check of the

latest business flash headlines. jd.com has set a record for an online sales event, bagging 34 billion dollars in sales in china's biggest shopping gala in the post pandemic era. rival alibaba hopes that 618 has unleashed pent-up consumer demand and signals china's recovery is well underway. jd says sales were up more than 30% on a year ago and has surpassed 2019's total by midafternoon thursday. seeking reported to be a bankruptcy loan after its plans for a half-alien dollars --re or sell half-billion-dollar share sell was abandoned. german payment provider whycard has suspended its outgoing coo after auditors said they could not find billions of dollars in

cash. it's one of the worst german stocks lobs in history. mourns loans up to $2 billion could be terminated. ♪ you doing okay?

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now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. australia. i'm karina mitchell. president trump has given his most forceful statement yet on ties with beijing. the u.s. could pursue a complete decoupling from china.

robert lighthizer said a full decoupling was not a reasonable policy option. the president did not specify. secretary of state mike pompeo says this week's talks with -- global news 24 hours a day on air on down quick take by bloomberg powered by more than

2700 journalists and analysts in more than 120 countries. this is bloomberg. back to you. california, florida, and arizona have all reported record and single day increases coronavirus cases. hospitalizations in texas have climbed for a record seventh straight day. our health care reporter joins us now. the surge in cases coinciding with the reopening of many of the states. >> thank you for having me. what's important to note here is that while states have been reopening for over a month and a half now, many of these states are also seeing increasing cases. it's not totally clear that reopening necessarily leads to increasing cases. what is indisputably true is that americans are moving around more. with that and with close

prolonged personal contact, there's definitely the risk of getting the virus. we have not seen this to be true. california is a good example. haveparts of california seen a surge in virus cases. others are doing relatively well. it is something more complicated than simply mirror reopening. one explanation might be the culture in different places around taking safety precautions. like wearing a mask or social distancing. we've heard some of the governors of the states where surges are happening, talking about how people need to be embracing these precautions more. from the start of this, the goal was to flatten the curve. you can't prevent all infections. you can prevent the hospital system from being overwhelmed. if you look at that as a point

of how far we have come, has that changed since the start of the pandemic? >> you raise a really important point. this is an infectious disease. we don't have a vaccine. we have some promising treatments. we will not be able to stop the spread completely absent a lucky turn. the important thing here is not merely that the cases are rising. they can't be rising in an uncontrollable way. that puts pressure on health care systems. in the u.s., we did a deep dive on arizona specifically. hospitals weren't overwhelmed. there were some concerning trends. icus filling up. you were seeing people in hospitals who had covid-19 staying for a long time. one doctor told us in the beginning of the pandemic, people were older and it was more nursing home outbreaks. he was seeing younger people coming in.

these are trends that suggest that the virus may be spreading more in the community. ,t may be spreading in a more not uncontrollable way. self-contained like a nursing home. saying thatain amc it will reopen most of its u.s. theaters on july 15. a lot of these decisions have been made about who reopens and who doesn't. those decisions have been made mostly by states. the same decisions that were made when states went into lockdown as well. now that the federal government has really delegated this responsibility to these individual governors, how are they cooperating or being more confrontational against each other when it comes to the reopening phase? >> that news about the movie chain is really interesting.

think of a movie theater. a risky environment for an infectious disease. it will be interesting to see what kinds of precautions the company takes. if it's an indoor venue, people might be more spaced out. you could see the chain, for instance, having better air filters on their internal ventilation systems. things like that. to berse, it will remain seen if people will come. on the state issues specifically, what's been an interesting consequence of the responsibility being on the states for a lot of guidance, on the one hand, it allows them to tailor guidance to the local conditions. the viruses and spreading that much in a state, they may be able to reopen at a faster pace than a state where the virus is very prevalent in the community and where the risk is more prevalent as well.

we have seen as a consequence of that, interesting questions about how you jell with your neighbors. especially a state where you are doing pretty well that your neighbor has a resurgence of the virus. we saw that specifically with colorado. the governor said, we are concerned about our neighboring states where the virus is increasing. even though we are doing pretty well, we have taken caution. we are in a good place. we are concerned about people crossing the border. we heard that coming out of governor andrew cuomo. he's not having people from florida come in to new york or perhaps a quarantine or something of that nature. these well-established travel routes between states, otherwise, states or they also contribute to difficulty understanding how the virus spreads. >> appreciate your time.

coming up, we discuss the outlook for australia's travel sector. the government is saying international borders are likely to remain closed until next year. this is bloomberg. ♪

♪ > let's get a quick check of the latest business flash headlines. delta expects to break even early next year after bleeding cash because of the coronavirus crisis. the ceo told bloomberg the recovery has begun and rising demand means that more flights will now be restored. he called the rebound meaningful and says around 1000 flights a day will be added to delta schedule next month and begin in august. revenues are at 60%. jetblue is bucking the post pandemic trend, restarting flights and adding new ones. the carrier will add 30 new domestic routes from the new york area.

as well as extending its premium service to new work, new jersey. restarts will mean jetblue is operating more than half its typical capacity by august. areates and qatar airways adding more cities to their destinations and boosting flights on existing rates as they ramp up post virus. emirates is increasing the number of destinations to 40 by early july. qatar will see its u.s. network rebuilt to 39 flights per week by the middle of next month. the decision follows a recent move by the uae to ease travel restrictions. >> the biggest back to back monthly job losses on record amid restrictions to stem the pandemic. losses were felt keenly in the tourism sector. 20,000 jobs. our next guest says it's been an

impossible few months for the sector. tourism and transport forum, ceo joining us now. great to have you with us. it has been painful. it looks like that is not likely to lessen anytime soon with international borders likely to stay closed until next year. absolutely not going to lessen anytime soon, unfortunately. the issue for the industry is like any other. the issue around borders and the fact that state and international borders have been closed means the institution is in a unique position. we had devastating bushfires beforehand. the industry has been subject to a terrible double whammy. how does it survive? it's a dire tone in this conversation. they talk about a travel bubble.

new zealand is the obvious this -- obvious one. we will see a lot more interest -- interest really and travel. that will not be enough to make up for the last of tourism coming in. margy: certainly not. i think the issue is that when you look at the average spend for a visit there, it is infinitely more than a local tourist. your average chinese visitor spends a point $5,000. things like the bubble will be useful. they are important. being able to open our borders to other countries that have a similar disease management profile. that will start to make a difference. the job loss in the industry is a significant now. we are starting to worry about whether there will be a tourism industry this time next year if we don't get additional government support. >> even if you do have the

resumption of travel, how much more cost do you have to factor in to the fact that the new normal for travel will look different to pre-pandemic? margy: that's quite right. the most interesting things about what new travel will look like is the larger and much higher level of responsibility for travelers themselves. a part of what is being proposed in terms of our capacity to have a bubble is that if you have a cold or are waiting for a covid result, don't go to the airport. you are putting yourself and others at risk. we are going to have to see a level of responsibility and understanding from travelers themselves. >> when do you envision that we will get passengers from australia to the united states? margy: that's a very good question. to be frank, new zealand first. if we are fortunate, that will be august.

after that, we are looking at a range of asian destinations. japan, hong kong, singapore. until quite late next year, middle of next year before travel to the u.s. reopens without the isolation issue. being able to come into the country without having to be in isolation for two weeks when you arrive. >> can you expect the government to extend the job arrangement? all the affected industries. is the transition to job seeker a reality that a lot of these will come back on the other side of this? is that something we should be grappling with now? margy: tourism is a people industry. unlike many under his -- others that can become mechanized, we can't. we want. it will be all about jobs.

struggle to will get to anywhere near the figures we had previously in terms of employment. at the moment, we've only got 230,000 people in jobs in the industry. even with job keeper, we would only get back up to 400,000 by the middle of next year. >> we get the preliminary june numbers for retail sales today as well. so far, retail sales have held off. that's a result of the stockpiling. going forward, can the retail sector survive given that we don't have these pockets of chinese tourists anytime soon? >> from a retail point of view, a shopping perspective, there

are parts of the industry that have done extreme really well. i'm told chocolate has done very well which is something interesting. a whole lot of areas that have done well. home where, etc. people go into renovation mode. there will always be a strong place for the retail sector. it may change a little bit in terms of online shopping. it almost becomes like working from home. we've all been part of one of the world's most extraordinary social experiments, working from home. i think it will change the way business is run their arrangements. in the same way, it may have led more people to shop online now and use that as a better option. >> what can the transport and tourism industry do in order to

restore travel confidence? this is a really important question. the industry can't rely upon government to fix these issues. that's why the industry has been so heavily engaged in providing hygiene and safety information across the board and trying to make that a consistent approach. from the performing arts, cruises, air traffic, hotels. destinations everywhere are adopting these guidelines and pushing that out fairly strongly into the public. like the bubble opening are will help. it's not helpful that we are getting chinese media issuing sayings to their people,

that they should not travel to us trillion, they are at the risk of racism. ofada accusing beijing engaging and coercion. these deteriorating relations between the two countries. margy: the us trillion tourism industry and china have always had a very strong and healthy relationship. china has been the biggest source of inbound international visitors. we've always been extremely happy to welcome chinese visitors to australia. i think that austria -- relationship will bounce back. the industry is focused on it at the moment. manufacturing.ya all those industries have focused on making sure that we maintain relationships with our friends in china. >> thank you very much for your time today. margy: my pleasure. stocks, around a

one-week high at the moment. let's see how things are shaping up for the moment. sophie kamaruddin in hong kong. >> in australia, and i on tourism after the us trillion government issued guidelines protocol as we are seeing inter-border relaxing. the transatlantic bubble being planned for as well. web searches on the rise. given these latest updates from sydney airport, air traffic expected to stay muted. traffic falling 49% through may. the tourism industry lobbying the government for another six months of program. the government has been reluctant. we will see how this plays out when it comes to the tourism sector.

futures have fled lower. the aussie dollar holding a three-day drop ahead of retail sales after thursday's disappointing jobs report. aussie bonds nudging higher after thursday. the 10 year yield off by one basis point this morning. let's get you a programming note. you don't want to miss our coverage of the bloomberg invest global summit on monday. we will bring you the biggest names. ceo.ong kong coming up next, a closer look at a top stock. companymelbourne-based is on a tear. ♪

>> an australian drug maker

could be added to the benchmark asx 200 index next week. edwards, what are they working on and why are investors so excited? >> they have been participating in a coronavirus drug trial for the last month or so. it is being trialed as a treatment for ventilator dependent virus patience. the company did a pilot study between march and april where 12 patients were treated with the drug in a new york hospital. it had an 83% survival rate. investors have started to pile on to the stocks. the results underpin this larger study that is happening in the u.s. right now. they are looking into the success rate for it. it thatignificant is they are being added to the asx index? companya sign that the

has become a more mature company . it's a sign that investors are paying more attention to the health sector in australia as a whole. we've seen it happen quite a lot in this health crisis. investors are starting to focus more on health stocks in general. the fact it is being added to the benchmark is part of that. jackie edwards in sydney. coming up in the next hour, the outlook and markets. kevin smith joins us in 10 minutes. we have big tech guests when it comes to alternative investments ahead. a portfolio with 3 million square feet of great a commercial real estate. her views on the hong kong market. we will speak with the ceo of

hong kong's private equity firm. let's get you a check of the markets on this friday. a pretty muted session when it comes to volumes in the overnight session on wall street. just edging higher as we continue to contend with a stretch of valuations as well as a potential second wave. a downside of 7/10 in new zealand. the worst gdp print since 1991. kiwi dollar trading flat at the moment. sydney futures flat, a slight gain when we see the start of cash trading in sydney. upsidesie dollar seeing after falling yesterday. lots more ahead on daybreak asia. this is bloomberg. ♪

>> a very good morning. i am haidi stroud-watts in sydney. we are counting down to the market open. shery: i am shery and in new york. welcome to "bloomberg daybreak: asia." china's top policymakers debate plans for hong kong. critics say the move will jeopardize anything that has made the city of success. friday will be dominated by new data and the coronavirus.