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New zealand going to issue 60 billion kiwi with Government Bonds between now and next year saying the net debt will rise. That will be in 2023. That is coming out of wellington. Looking at what is happening we have got the australian markets on the way. Of huge ball in the number people out of work but the Unemployment Rate better than expected, down to the dissipation rate their, falling quite drastically as well. That is where we have it. China 10 year bond. We have got yields going back as the price goes up. Risk off sentiment, facing unprecedented threats from the coronavirus and monetary and fiscal policy makers must rise to the challenge. Jay powell pushback talk of negative rates. Is an unsettled area i would call it. There are fans of the policy, but for now it is not something considering. We have a good toolkit. That is the one we will be using. Haslinda joining us from new york is nicole webb from weld enhancement group. So the fed saying not likely to go negative, but it is hard to whereear in a market banks say we have what it takes, we will do whatever is needed. Hard to be a bull as well. We look at the numbers unnecessary Monetary Policy going on around the world as we heard leading into our segment here. The Weather Forecast for the market globally remains that uncertainty remains in the forecast. It is unprecedented polarization between pessimists and the optimists. Haslinda you talk about uncertainty for demand. You could have lower rates with stimulus spray what assumptions are you making about when demand will recover . Powellg off of what said, we are expecting experiencing something never seen before. We dont know how we will come out of this. There has been unprecedented coordinated working between the administration in the u. S. As well as the fed and the treasury. We have to look backwards and remind ourselves what started out as a multimonth phenomenon is now a multiquarter or longer term territory. Lets not forget this really was supposed to be a shortterm it to supply, demand. That was going to require a shortterm change to growth expectations and the Ripple Effect has been greater than anyone expected and almost unprecedented in its impact to the global market. Also the systemic impact to trade. The tensions between the u. S. And china, china and australia, we can go on and on. This will take quite some time to recover. When you had oil into the equation, we are looking at something that is multifaceted and needs much consideration. Haslinda if you take a longerterm perspective, are there anything in the market you can capitalize on . Is a couple of things. Too often when we talk about the overarching thematic level, we have to remind ourselves are we talking about an investment that proxyay in cash or cash or looking for investment into the market and not anticipate or attempt to time the amount or the village with the the volatility out there. It will remain high for some time. The dislocations, there are quite a few. In the u. S. , if you strip out the big names in technology, apple, microsoft and take them, capitalization awaiting, you will see a very different, very different numbers or return to the valuations we have seen previously . Can add together the real estate sectors of the s p and have a smaller capitalization weighting. There is dislocation and the stronghold names will continue to be of value for investors. We need to invest in companies we know have access to liquidity, the Consumer Base and have weathered storms before and they will know how to navigate them. So what is actually being priced in . Market participants are looking at three to six months ahead and largely getting ahead of themselves. They have got two big investors out there. David tepper saying a quick snap back is fantasy. Stan miller saying the risk reward ratio is the worst he has ever seen. Over the last couple of days, in the u. S. 30 million evil have lost their jobs. 77 expect to be hired back. What we are looking at, it is likely about half of those jobs are permanently lost. It is fantasy to think there is vshaped recovery. When you think of how hard it is , readyoard or rehire million unemployed people. We are talking about unemployment numbers approaching 10 in the u. S. You can couple that with every bailout package out there and trillions of dollars of stimulus. There are enough tools to weather the storm, but longterm growth expectations dont need to change, in the shortterm there is a big impact, something not priced into the market. Will be hard it will be hard for the consumer to go back until there is transparency in testing or there is herd immunity. Have clarity on anything. You will see Governor Cuomo of new york tackling with de blasio from manhattan saying that she had a tweet suggesting anyone who tells you they have any clarity is lying because there is not any. The markets have not priced that back in yet. Rishaad you are getting to the heart of it when you are talking about the consumer and losing your jobs. If you see the jobless rate go up as it did in the last nonfarm payroll report, it creates uncertainty for people who do have jobs and dont spend. It turns the money multiplier from a Virtuous Cycle into a vicious one. Absolutely. Behavior, this is not as isolated as it felt during the financial crisis. Why the market bounced back so quickly is there was the human component where people said i am choosing to change my behavior, shelter in place because it is for the best for humanity. As we watch this, we see the consumer is hesitant now to understand or grasp when is they go back it is they go back to normal. A large study suggested if people were told they could go back to living their life, would they . People saw was 75 of were saying no. They would not because there is not a vaccine, antiviral, there is not clarity around testing. They are not feeling well prepared. They dont understand the impact. We can talk all day long about reopening economies, but we have major issues to overcome first. We saw twitter announce they will not make anyone go back to the office indefinitely. What is the Lasting Impact on real estate . That is another game changer that has to be priced in. Commercial properties as well. Thank you. The l. A. News from times, the federal bureau of investigation has served a search for it on richard burr, against allegations that he sold a significant percentage of stock portfolio in 33 different transactions on the 13th of february because he is on a committee which was receiving daily coronavirus briefings and became and it came a week before the stock market declined. Much of the money was in businesses that subsequently were hit very hard by the market downturn. Lets move it back to new york and the first word news as we join katrina mitchell. Karina we start with australian employment numbers. It has been a record all with the number of people out of work april. 600,000 people in that puts National Unemployment at 6. 2 . Better than estimates, although the reserve bank is forecasting unemployment to rise to 10 as a result of the virus lockdown. Is warning the coronavirus quibi race four years of growth from the Global Economy and push 100 Million People into poverty. Worldwide infections are above 4. 3 million with deaths approaching 300,000. The u. N. Says attempts to find a vaccine will only be the first step in a long road ahead. Virushas details of its rescue package aimed at Small Business and utilities. They are making 60 billion available with more funds in the pipeline. This is part of a 265 billion plan Narendra Modi announced this week which is 10 of gdp. They are also giving cash to power companies. 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. Ahead, more on india. The country spelled out the details of its massive rescue package three we analyze the measures with our next guest. This is bloomberg. Rishaad we are back with bloomberg markets, china not doing what it was expected, to cut Interest Rates and to drain liquidity from the Banking System. Tom mackenzie is the markets coming to. Watching this surprise nonmove. Various News Agencies were highlighting there was no news out of the pboc. Tom there was an expectation it would roll over its part of the medium Lending Facility and they would cut the rates as well. The consensus, they would look at a 20 asus point cut. We did not get either of those actions. It matured. They have the pboc also held off on injecting liquidity with the shortterm, for a 30th straight day. There seems to be a view there was inadequate liquidity and is despite the fact the economy remains under significant pressure and you have this flood of Government Bond issuance as well. The pboc has reduced rates multiple times this year and has found a more powerful policy response going forward. There is the view they will need to cut further to support the economy and to give a boost to the bond market which has braced for the additional issuance at bond level. Sent we chartered have could get a said we could get a cut. This group did not expect any movement. They thought the move would the National Peoples Congress Next month. We are getting chinas latest job data tomorrow. How bad is it expected to be . Tom the official jobless rate is expected to decline. The official rate only moves measures those people working in cities. It leaves out 50 of the workforce. It is not very reliable. The real picture could be worse. Bnp paribas say 131 million or and it isobs or really closer to 12 for the jobless rate. They see the market will shed 10 million positions when the government hoped to add 10 million. All of this is going to weigh on consumption and you have got the external picture west remains bleak, china facing a serious spill back with the Global Demand picture remaining week. Major economies that are most affected by the virus, including the u. S. , asia and europe, will pose a drag on chinas output. We heard from the finance minister in china a few hours ago in the peoples daily saying the virus hit the government revenues and the deficit will be increased. We are waiting for the details on that at the National Peoples Congress Next week. Haslinda Tom Mackenzie in beijing. Coming up, coronavirus creeping up as china seals off areas near the north korean border. Macau has 50 cases. This is bloomberg. Newsad of it of breaking a bit of breaking news, korean air seeking to raise one point trillion 300,000,000,001 300 billion won. This sharen from sale. And some government aid to boot. China is sealing off cities in the Northeastern Province that borders north korea as a growing cluster of cases threatens to undermine containment of the coronavirus. Yvonne man has the latest. China is on high alert ahead of the npc. Pressurehere is leading up to the political gathering after it was wished back because of the outbreak and now another headache with 22 infections across three cities and two provinces. This one city is under lockdown. Bus and rate Rail Services have been halted. Schools that just reopened are closed again after we heard of six new cases of infections that were found. The six people came into contact with a cluster in another city that went into lockdown for we heard of new cases in both of those areas. These are becoming one of the biggest clusters that have emerged in months. These cities border north korea. There is no link between the cases and that country, but there are fears outbreaks there are spilling over to china. North korea has not confirmed any infections, but the u. S. Military suspects cases. Another threat is north, russia, one of the biggest outbreaks with more than 230 thousand cases and 2000 dead. Rishaad we have got hong kongs streak of no local infections coming to an end. It was a mysterious case with one daughter with no travel history and her daughter or son also contacted it. Contracted it. How big of a setback is this . Saw no for 23 days we local infections. This is a disappointment and stopping hopes the city contained a virus after months of social distancing measures. A 56yearold woman tested positive earlier this week. Authorities dont know how she got it. Unfortunately it was her whoyearold granddaughter also tested positive. Six other family members have shown symptoms and they are in isolation. This is a challenge for covid19 because most cases are asymptomatic. This is happening with the government was going to reopen schools and loosen restrictions with mainland china. They will not push back the reopening set for may 27. The resurgence of cases may complicate the political picture in hong kong, how quickly distancing measures should be eased. Carrie lam has eased the gathering limits, but some have accused her of stalling protests from coming back. They have come back anyway. Man there. Vonne we have headlines out of korea. They say the nightclub linked to virus cases has increased to 131. 20 30 more cases, taking the total above 10,000. Korea has been trying to trace more than 4500 clubbers from seoul to pusan. A look at where we are in terms of the market, we are lower by what Jerome Powell said is warning of significant Economic Risks and that is not helping either. They are fueling doubts about valuations. We had some comments from miller and tapper talking about valuations. We have the asia index down. 7 , not surprising given the risk off sentiment today. China down. 7 . Disappointment the pboc did not mls offer, preferring to drain liquidity. The nikkei 225 down. 6 . Dragged down by tokyo electric, mitsui. Falling for a sixth straight day. Coming up we are drilling down on oil. We are discussing the timeline possibly for a rebound. With the inside we see oil prices edging up on the wti contract. This is bloomberg. It is 10 29 a. M. In hong kong. 10 29 p. M. Here in new york. President trump has worked to curb huaweis access to the u. S. Market. He renewed for a year an order to restricts them selling products in the u. S. As washington battles beijing in he fight for 5g supremacy. The administration is pressing allies to extend restrictions. G. D. P. Grew. 7 through march over a year earlier thanks to domestic demand but thats the slowest pace since 2009. The coronavirus canceled exports from vietnam, trig earg trade deaf soist 940 million. The u. K. Is facing deep recession with the government admitting worse is yet to come. The economy contracted by almost 6 in march and the treasury expects following data to underline the slump. The readings undermine an already weak economy with a bank of england warning of a dramatic 25 contradiction in the Current Quarter which would be the deepest slump in three centuries. And the director yen of the World Trade Organization Roberto Acevedo told member government he is plans to step down before his tenure ends in august of next year. The 62yearold brazilian is in his second term having held the post since 2013. His departure would come at a difficult time for the World Trade Organization which struggled with the u. S. China trade dispute and now the coronavirus. Of land at the hong kong airport failed to sale. The government rejecked all four offers received for the site after they didnt meet the reserve price. Its only the seventh failed auction in eight years and an about turn from last year when developers were paying top dollar for land. Global news 24 hours a day on air and online powered by more than 140 journalists in more than 120 countries. Haslinda . Haslinda asia tracking those losses in the u. S. Overnight after Jerome Powell warned of a long, long road to recovery and investors not helping either. David tepper adding to the pessimism. The c. S. I. 300 index down almost. 9 . No mlf operations today choosing to drain funds from the Banking System instead, the first time its happened since april, 2019. It is well see if it does cut rates further down. The nikkei 225, down. 6 . We vals the economy minister insisting that deflation and be capped. The effects lower by 1 . Unemployment at a record. Were looking at a rate of 6. 2 . Korean air among movers were tracking, down 1. 9 . We have korean air trying to raise more than 00 billion to stay afloat. Hhs health care up by 2. . Take a look at assets linked to risk right now. We have the bloomberg dollar , x up about. 1 , 12. 5 rising as risk ap kit declines. Dollar a haven play. Aussie yen a popular Risk Appetite, failed to reach that key resistance level for a second time in two weeksing suggesting Risk Appetite could e in gold. Global oil offering an even more bleak assessment of the market. This is a pa this ases the pandemic drives on demand. Cutting supply requirements by three million bafrles a day about 15 . Thank you for joining us, vander. Lets start with the basics. Whats your view of the market . Good morning. Thanks for having me on the show. I think the oil market is past its Inflection Point that happened toward the end of april. We have seen crude bounce off 18year hes and alltime his poric historic low which is happens arn the 20th and 21st of april. I think the major factors for the market right now are two. First is what is going to be the slope of the curve as prices recover. I think theres no doubt about that the worst of the demand supply gap in april. And the second is how smooth or otherwise the recovery is going to be. I expect it to be quite very gentle slope, a swoosh recovery as its being called, i think i quite agree. I expect it to be quite jagged. I expect a lot of pullbacks along the way. Rishaad naturally, bound to get that. How does the whole demand side get addressed . All sorts of different commentary pieces being written saying demand will go back to where it was or the world changed in its entirety and we wont be needing as much of the fossil fuels as we did before. The truth has to lie somewhere in the middle, surely. Absolutely. I think demand uncertainty right now is far bigger than supply. Sthrysplie side the world is able to do calculation and assessment of what are your expectations of opec, nonopec compliance and other cuts appening outside that. The untern uncertainty is that the world still knows very little about the coronavirus, how its going to behave. And the easing of the lockdown, we saw a lot of optimism come back so the markets end of april and early may as lockdowns began to ease but we have had minor flareups in country loosic south korea and northeastern china. In germany, the virus transmission rate has gone up and so on. We see it flipping back, to concern about whether well be able to get out of this lockdown in a smooth manner. Oil demand is directly related to that right now i would say huge uncertainty over oil demand recory. Recovery. Haslinda you talk about a yagged recovery yet some of the markets say we could see a replansing in the oil market by june, july. Whats running that optimism . I think the word rebalancing needs to be defined carefully. Lets face it. We are coming out of an estimated 30 Million Barrels per day of mismatch between supply and demand in april. Clearly its logical to assume that this gap is going to narrow which is being described as rebalancing. If rebalancing is to be described as oil demand and supply globally being closed close, quite close to each other, i think thats a long way off. Because opec, nonopec, just about 10 Million Barrels per day. As far as demand is concerned as i mentioned earlier, its not going to rebound. Thats not a word i would use for oil demafpbled clearly the International Airline traffic is going to remain quite subdued. Potentially for the next six, 12 months. Could be longer. Some form of restrictions on travel even within the country, economic activities, are going to happen. Until we can find a vaccine and i think even the caveat there is vaccine being available equitably across the globe. A lot of hurdles there. Dont expect a rebalancing in terms of supplydemand coming close to each other. Ot any time this year. Haslinda drilling at the lowest level in about the last 10 years. How much of that will come back . So, you know, thats i think sort of a narrative that i would like to debunk. Its been doing the rounds in recent days. Some reports that some companies that had shut were starting to reopen. I think its the truth is far from that. Its not certainly i dont think shale operators preparing to come back. The shuttings are going to continue. The spending has been slashed, it will remain so for the rest of this year. So i expect atp, least one Million Barrels per day month on month drop in u. S. Production. Sometime next month. Rising to at least two Million Barrels per day by the end of july. Rishaad thank you so much. Coming up later here on oomberg, Dubai Airports thoughts that passengers will return to the skies once they believe its safe. But theyre not sure when that will happen. Hear our interview at a quarter past 12 00 hong kong time here on bloomberg day break middle east. Haslinda up next, india spells out details of its massive rescue package for Small Businesses and utilities. This is bloomberg. Haslinda india has spelled out details of its virus rescue package aimed at businesses an utilities. The government is making more than 60 billion available with more funds in the pipeline. Its part of a 265 billion plan that Prime Minister moe die announced this mohdi announced this week. Modi announced this week. With ill this will address liquidity concerns but may not boost growth. Thats right. The measures announced yesterday by the finance minister are the funding at with Small Business sector. So what we would actually wait in subsequent announcements, hopefully tomorrow, should be a package that puts more money in the hands of the poor, hands of the lowest income people. Are orm of loan guarantees art of this. Haslinda what assumptions are you making about indias recovery . Some say an lshape red covery could be the best scenario at some point. In terms of what shaped recovery is going to depend on what we hear from the finance minister in coming days. Indias announcement has been underwhelming compared to most other country bus there are a couple of things in here. Gone part of covid has in about five parts of india, largely in the urban centers. The Rural Economy has been barely hurt. It would not be fair to make an assumption that growth would see a sharp fall and a prolonged downturn because a large part of the economy remains, and it is highly concentrated in india and like most other countries. That it there could be much larger relaxations and the confinement zones could be much smaller rather than the Geographic Area of a district. I would warn that we could see a very flattish kind of ushape red covery. But as i mentioned a lot would depend on what you hear if the finance minister in terms of guiding cash an benefits in the coming days. [two people speaking at once] im sorry, i didnt get you. Rishaad its my fault, i was talking over haslinda. Is it money youre referring to, what are the mechanics of doing that in a country as vast as india . The mechanics call for making sure the cash transfers are executed. Dia has close to 383 million for nts nofrill accounts, the poorest in the country with no minimum balance. If you have that kind of account youre automatically given about. 7 of g. D. P. Thats lakely to give a boost of rts and help kind of cushion any consumption and income shock we see people witnessing already. I think the easiest way to go about transferring income is basically that account. Rishaad all right. Huge amounts of money elsewhere being in stimulus. Whats the sort of economic profile that india has . The linkages are sometimes quite leaky, to put it diplomatically. How do you ensure the money gets o where its needed . We do have challenges in terms of getting things executed properly and in a timely fashion but just to give you a context, the government of india on march 27 announced theyll be transferring a minimal amount to about 208 million female account holders and no frill account holders of india and since march they have already transferred amounts total totaling about 150 billion. So at least two traunches have already happened in the past one and a half months. Because the detail of the accounts is easily available, it is across the board with all the issue banks, private banks, regional banks, transfering to this medium should not take much time and should be easy to execute in my opinion. Ishaad thank you so much. Lets tell you what we have coming up. A look at this Global Pandemic as it drags on. We were asking Goldman Sachs what needs to be done nord to support the American Economy . Our interview on the way next. You are with bloomberg. Rishaad Goldman Sachs saying the United States will node to provide more stimulus to help the country recoverer from whats going on around the world. Hief economist jan hatzius sharing his observations with bloomberg for the economic outlook. Jan our expectation is q2 sees a steep decline and then we have strong sequential growth in the second half, plus 29 in q3, plus 11 in q4. So from that perspective its a fairly rapid recovery that said if you look at the yearonyear rate which is might give you a better sense of the underlying trend, were at almost minus 3 in the Second Quarter and still decline of more than 5 yearonyear in the Fourth Quarter. Thats an important thats important because minus 5. 4 in the Fourth Quarter would actually be the weakest number history on a yearonyear basis if it werent for q2 and q3 of this year. Its a partial recovery, fastener some sectors than some others. The industrial sector may recover more quickly than Consumer Services that require facetoface interaction. Thats going to be a disrupt effector until basically we find much better medical options, probably a vaccine that seems like its a ways off. Haslinda how much do you mode el do we need to see in terms of stimulus back stopping, however you want to labible label it as to get to your forecast . Jan i think we need additional fiscal support for building in phase 4. Which would deliver another 500 billion or 600 billion of stimulus in 2020. And probably additional numbers beyond that for 2021. That are probably well above that. Another trillion, trillion and a half. Thats our expectation. That we will get. In particular a significant demand of support for state and local governments. Were not assuming quite as much as what was in the house package that was passed yesterday. They had about 1 trillion. We dont think its going to be as big as that. But we do think therell be more. We also think that the expanded Unemployment Benefits are going to be partially extended and were expecting another round of rebates to households. So substantial amount of additional help to build on the effort thats already been made which has been very substantial. We have seen a very large amount of fiscal support both in absolute terms and relative to other countries that have been hit by the same shock. So thats clearly one of the ways in which the u. S. Is maybe better placed than other places for an economic recovery. There are also ways in which the u. S. Has bigger problems. The virus situation if you look active ew number, the numbers, while improving are not its not improving as quickly as it is in other countries. On the fiscal side, the u. S. Has done more. Haslinda Goldman Sachs chief economist jan hatzius there. Now a look at the latest headlines. Indias bank is tightening up on new loans. They say the bank will tight then screening process after reporting profits fell by nearly 10 in the latest quarter. And banks are bracing for a surge as the economic lockdown triggers mass unemployment and leaves Many Companies facing bankruptcy. Amazon said business is returning to normal in the coronavirus era with one in one and twoday deliveries recovering as customer demand surges in the u. S. Amazon had restricted supply times as the pandemic spread but says the situation is improving of the virus closed traditional brick and mortar outlets sending millions searching for and buying products online. American carriers plunged to their lowest in 2013 amid warnings that global air travel industry wont revive before 2025 at best. Traffic will remain at least 10 below original efforts for at least the next four year, well below fore kas made before the coronavirus crippled travel demands. Theyve had the worst performance this year on the s p 500. And more great guests coming up later today including Zurich Insurance c. O. O. And lloyds of lond c. E. O. John neil. Dont miss those interviews. Rishaad and on friday, watch leadership live, they speak to eric schmidt. How the former google c. E. O. Is helping mitigate the economic fallout were witnessing in new york. Thats to come on friday. On leadership live. Only on bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. Haslinda its almost 11 00 a. M. Im has nondominant im haslinda amin. Here are the top stories. Asian markets follow wall street down as the fed says the u. S. Economy faces unprecedented threats. Jerome powell says policymakers must approach 4. 4 million with china sealing off cities near the north korean border. The pandemic could erase years of global growth. And here gives details of its virus rescue package aimed at india gives details of its virus rescue package. This is where we are at the moment. They are just having a look at this lack of real optimism at the moment. Thats reflected on what we are seeing on the hang seng. Nikkei 225 closed off its 2 3 of 1 ession nearly lower. Dencent moving to the upsi after some blowout numbers. Firmly in the red. Slower and uneven recovery. Thats the theme emerging this week, putting a lid on sentiment. Upes where we are shaping in terms of the u. S. Futures pointing to a lower ning this point in time open at this point in time. We await the u. S. Weekly jobs report due out on thursday. The virus has destroyed all jobs created over the last 10 years. 10 year bond yields looking like that. We have Jerome Powell slamming the door on negative rates, calling it an unsettled area, but not something is considering. He says the fed has a good tool could at this time toolkit at this time. It will take more than a year for oil to recover. Take a look at where we are in terms of the nifty futures, pointing to a lower open. We are tracking indian bonds. Indian bonds have been falling. Benchmark yields have risen in the last two sessions. 7546 at thisdr at point in time. The United Nations is warning that the coronavirus could erase 4 years of growth from the Global Economy and push more than 100 Million People into extreme poverty. Worldwide infections are above 4. 3 million, with the deaths approaching 300,000, although rates are declining. Find a. Says attempts to vaccine for covid19 will only be the first step in a long road. In australian jobs. The national Unemployment Rate at 6. 2 , better than estimates. The reserve bank and treasury are both forecasting unemployment to rise to 10 this quarter as a result of the viruslike town. Meanwhile, india has spelled out details of its virus rescue package aimed at Small Businesses and utilities. More funds are in the pipeline. The measures are part of a 265 billion plan that Prime Minister Narendra Modi announced this week, which is 10 of gdp. The government is funneling cash to parent companies. Wtodirector general of the has told member governments to plans to step down before his ds in august next year. Hes held the post since 2013. Has departure would come at a difficult time for the wto, which has struggled with the u. S. China trade dispute another coronavirus and now the coronavirus. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. And karina mitchell. This is bloomberg. Markets got upended a bit thatJerome Powell said market moving message wednesday, saying he has no intention of adopting negative Interest Rates, even though the economy is in such potential bad shape. He says more Government Spending will likely be needed. With whatays is here he had to say and why. Why did this negative rate question get so big . Repeated comments from fed officials saying no way over and over again. People say, dont fight the fed. The markets have fought the fed in the past on the markets have won. It remains to be seen. A lot of people in the bond market in particular is having led the fed lower. In this case, Jerome Powell made it pretty clear. She may have said hes ready to do whatever is needed he may have said hes ready to do whatever is needed. When it comes to negative rates, its just not on the agenda. Its an unsettled area. I would color call it i know there are fans of the policy, but for now, it is not something we are considering. We think we have a good toolkit and thats the one we will be using. If you look at a chart from the bloomberg, you can see we are looking at how fed funds futures were pricing in the possibility of a move to negative rates by january of 2021. It was kind of a briefly held bet. Fed fund futures traders have not completely abandoned. They could push it back over that 100 again. April contracts are still just about saying, maybe we could get those negative rates. That was one of the biggest things that came out of what Jerome Powell said today. I think what he said again about the economy, about his concern that this deep recession could be something worse if more isnt done. He makes it pretty clear he wants the federal government to do more, too. Take someery may time to gather momentum. The passage of time can turn into insolvency problems. Additional fiscal support could be costly but worth the if valves to avoid longterm damage leaves us with a stronger recovery. This is something that hit the stock market. There has been enough negative data out of the u. S. Jobless claims, more than 30 Million People moving their jobs since midmarch. The forecast for secondquarter gdp down 10 yearoveryear. The other part of this story is what this is doing to the deficit and the debt. The treasury wrapped up its , pretty good demand for the three year note, 10 year bond earlier in the week. This is the question for a lot of governments issuing a lot of debt. They want to take steps that will help them get that debt sold. Some argued that a move to negative rates would help the fed. Haslinda meanwhile in china, surprise, the pboc did not make a move to lower rates today, as many expected, but is expected to move soon. What happens next . Its interesting. I feel like today it was like someone was waiting for their date to pick them up and waiting and they realize, there was not going to be a date. The pboc has refrained from doing open market operations. Week, people said that must mean on thursday, they are going to come in and do mediumng to get the Lending Facility rate down. In fact, they didnt. They didnt change the amount of what they rolled over. It was another signal that they are not ready to move yet. People are expecting them to let and drop down about 20 basis points but they kept a neutral position. Another thing that set people up for this was the Monetary Policy assessment report that came out recently where they talked about more powerful using, sliding rates lower. Now, some are expecting a move may be as soon as tomorrow. Lets step back for a minute. Now china is facing right is is millions of people who are so out of work. Industrial production, retail sales, which have been weak recently. This is another reason why people are expecting the pboc to make a move like this. It is a lesson that Central Banks and governments around the world are watching. Many countries now at these high levels of Unemployment Rate, people who have no way of finding a job yet because a lot of companies are not open. What happens in china could be a precursor for what a lot of other people will be facing as well. Haslinda kathleen hays. Coming up, we tightly text we talk latex. We find out how one of the worlds biggest maker of latex gloves is dealing with the pandemic. Singaporebased asset manager telling us where they are putting clients money is the Company Warns that market valuations have risen too far into fast. This is bloomberg. Asian markets retreating at the moment. Jerome powell warning about rising Economic Risks. We have a big name investors fueling doubts about valuations, saying that stocks are vastly overvalued. On next guest is in the same camp. Lets bring in ankit khandelwal, cio of maitri asset management. I suspect you would be in total agreement by whats been said. He is mentioned that hes never seen worse riskreward ratios in his life. And also others, saying things have gone too far, too fast to justify where we are. Ankit yes. Back, it is not something we have seen in recent history and the space of the drop we saw in march. What we see now here, there are still a lot of uncertainty in the markets. Having said that, there is still a lot opportunities in the market, which makes us believe that the riskreward ratio in the market is not right now. In effect, i think that when you look at what is happening, we have also got further walls ,f worry come into play as well not least of the outbreak or the reemergence of conflict between beijing and washington. Started with covid19, now going back into the trade argument. That is another overly. Ankit definitely. The last thing the world needs right now. Seemsing is, right now it more to be in words and little bit of actions. If this gets translated into more actions, i think that will be very bad for the markets. Hopefully this seems to be politically motivated right now. , fully we are looking at a lot of uncertainty. We are looking at consolidation possibly, as you indicated. When you take a look at volatility, it has come down considerably, currently hovering around 32. Is it a mistake to think that volatility will not stay overrated. Elevated. Ankit if you look at historical standards, volatility precrisis. It is not at the kind of levels we saw in march. We dont expect to go back to levels. If what we are saying about the market valuations being higher and the uncertainty we face in the economy, with other countries open up, as well as how the second wave of infections happen, we can see pickup and volatility in the near future. Haslinda what do you do . By gold right now . Prepare for the future buy gold right now . Prepare for the future . Ankit yes. What we are talking about right now is a nearterm outlook. Vol is something that we are quite bullish on. That, there are certain sectors in the economy which give a lot of Growth Outlook in the future. This might become a new normal going forward. China obviously i think will come back. People will become a more and more health conscious, so i think health and wellness will become a big thing going forward, and social media. Sectorse some of the which we think present a longterm opportunity and we are focusing on them. Haslinda what is your view on commodities . We have this question of the day , how far will commodities rebound this year . It all depends on how the reopening of the economy happens. Yes, we can see a rebound in some commodities if the reopening goes as per plan. As you mentioned earlier, there are a lot of opportunities. The commodity market is telling us that they are not very sure how the reopening will work. We take a slightly longer term to. Longerterm view. We are worried that inflation might come into the foray. Commodities could be a good way to play that. Other question here about your business itself. Are you seeing redemptions taking place or indeed, perhaps people are investing with you . Investors generally are longterm investors and they investors our generally are longterm investors and they take the longterm view. If you had to pick one asset class and one item within it, what would it be right now . Mind forld comes to sure. That would be a Good Opportunity to load up on gold. Thank you very much indeed. Ankit khandelwal therefrom maitri asset management. Tencent beating expectations. This as self isolation measures led to a surgeon game sales a surge in game sales. Its postpandemic outlook is not looking so rosy. A surge in in game sales saw tencent post record revenue. While the latest results offer a ray of hope for investors, and new Bloomberg Opinion article says tencent and its peers would have a rough ride ahead. Lets bring in our columnist. Lets start with why tencent is doing so well amid the pandemic. Really occupies this Perfect Place during the a large amount of the revenue is online games. They had a lot of time on their hands so they were playing games. The other thing tencent benefits from his social networks and the revenue there also rose because so many people were basically on their phones chatting to each other. That was two great areas where tencent managed to benefit. They get money from ads, but it is not as big for tencent as it is for Companies Like alibaba. There was a drop in ad sales. It is not a huge problem for tencent because they are not so ad focused. They had a very large rise in video subscriptions, music subscriptions, and they benefited from the content side of the business. It was a really good quarter for them. Haslinda there are areas of weakness. What are some of these that it faced during the quarter . Ads, theirond payments business, and this is a company that has done done a lot to get people from physical payments to online payments. During the lockdown, the online payments business didnt do that well. Payments dropped. In fact, a lot of the payments business is kind of on online to physical. People use other Payment Systems when they go shopping, when they go to a restaurant, when they buy food. With people not going out physically to purchase products or consume, payments actually dropped. Another area that dropped for s not aand it huge problem yet, they are trying to build the cloud. And a lot of the deployments and the revenue that would come from that has been delayed. It has been pushed back and might get pushed back further. Those were the two areas of weakness for tencent in the quarter. Argue that things may not improve too much for these Companies Like tencent. Should they actually should investors be more worried and tencent in tencent . Given where they are with valuations. Thats, i believe, a huge discount compared to their net as well. 60 discount for that one. Does tencent have more to lose . Is all the good news priced and now priced in now . I dont even know what investors are doing in terms of driving up stocks in asia. There is so much madness going on. This is something that tencent pointed out in the conference call. As people go back to work in china and there is more normality going on, they are going to be spending less time on we chat and less time playing games. Bosses hope less time watching videos and listening to music. Those are kind of lockdown Consumption Patterns that will return to normal. Normal is not as good as during a lockdown. Yet on the flipside, the revenues they would get from things like advertising are not necessarily going to rebound as well as you would hope. Because the Global Economy and chinese economy are still in massive, massive headwind for the advertising business. You are in this i have the storm where everything eye of the storm where everything is comb, but there is calm, but there is dark clouds ahead. The macroeconomic headwinds is consumers will be fearful, or should be fearful in coming months, even in china, that they may be losing their job, salaries will get cut, then maybe furloughed. When economies around the world, including the United States and europe, are facing downturns, its not really possible that china is going to escape that. Thanks for that. Tim culpan in taipei. You can have a look as we head off to the lunch break for shanghai. It recovered a little bit. We are off the lows of the day. Draining funds from the Banking System. Thats a little bit of a surprise move. It has been coming under pressure to handle higher demand for funds here. We were expecting some move on the mediumterm Lending Facility. That did not happen. It kept the overall Market Indices in the red. We get japan returning from their lunch break. This is bloomberg. Haslinda thats a Beautiful Day its a Beautiful Day, even as the markets are down. 1. 3 . Ti down about on the back of warnings that troubled demand could lag through 2025. It has options to raise more funds by selling convertible bonds within 15 months. The sti down 1. 3 . For now, here are the first word headlines. The Federal Reserve says the u. S. Economy faces unprecedented threats from the coronavirus and monetary and fiscal policy makers must rise to the challenge. Jerome powell pushed back on negative rates but said liquidity problems could turn into solvency issues. He added that Additional Support could be costly but worth it. Among for japan has fallen to a record low. 7. 9, the first single digit reading in data going back to 2002. The survey offers an early indication of how people are reacting to the spread of the pandemic and the governments response. Kongs of land in hong former airport failed to so. Cell. Sell. The government rejected all 4 offers after they did not meet the reserve price. Last year, developers were paying top dollar for the land. President trump has widened the u. S. Efforts to cut huawei access. He has renewed for a year a National Emergency ordered that zte froms huawei and selling their products in the u. S. , as washington battles beijing. Allies to extend restrictions. Lets get to the market action. This is the story at the moment, pessimism currently very much at the fore. The nikkei 225 coming back as it finishes its lunch break. Seeing Japan Bank Lending jumping. Crisis has been 2 inflation, many had thought the target had been consigned to history, but clearly not. This is what we have from governor kuroda, who is making that speech in tokyo. Lets quickly look at the prospects of the session in mumbai. This is the nifty 1. 4 down on the futures contract. Nifty just shrugging off some of the gains we saw in the session on wednesday. Rupee pretty much unchanged against the dollar. We have a big steepener taking place. This week, we saw the steepest yield curve in ages. Thatis also, as we look at , some of that steepness is actually flattened because of that massive move to the downside in terms of the yield. 5. 8 , haslinda. Haslinda lets talk latex. Shares of glove makers have been rattling, buoyed byi rallyn ing, the lead by a surge demand. Y a surge in followed by orders from the u. S. And europe. Coo,ng us is founder and good to have you with us. Quantify that for us. What kind of growth in demand have you seen . Probably something about 10 , 20 level. Glove industry is all the time running at full capacity. There is great demand in the market. About 10 , 20 sort of growth. Thats probably the max. Forward, we have more and more economies reopening, emerging from the lockdown. We are also seeing possibly the second wave of virus cases. Are you expecting demand to surge from here as well . Yes. The market is big at the moment. A lot of people are looking for gloves. I think from the supply side, there is something called strain. Because capacity is full. I think there is a situation then. Supply i think is an issue. Upt we can do is try to production capacity. I think thats all. Yvonne i am just wondering haslinda i am just wondering the demand from overseas. Where are you seeing the most demand . Is that an indication of the situation of the virus . , usa, everywhere in the world, even china. I see that in fact because this pandemic, the real demand in the market probably increased by 30 or 50 . I think that is possible in the market, because Everybody Needs gloves. A lot of people need gloves to protect, especially frontline people. Big demand in the market. There isward, i think still big demand in the market. I want to get your view on your company itself. You must be making money hand over fist at the moment. What do you do with the money that you have made . It is is it something that you have to save up for a rainy day . Because there certainly will be after this covid goes away. We have a lot of customers. We still had to supply to them. Be ethical. D to we still need to be price increasing, i would say, is. I cannot say, overnight, i increased my price by 30 , 40 . It is not talking about, ive made a lot of money. Probably, weve got better profits going forward. The company has been spending since 2002. We are every year spending. We are doing business on a longterm basis, you know . The old adage that when the sun is shining, which it is for you, it isnt for most people, when the sun is shining, we should try and repair the roof. What are you doing . Kossanyou solidify Rubber Industries looking ahead . Business, we call it to Continuous Improvement and sustainability. All the time we think hard, how to grow the company, how to sustain the business. It is not a case of this pandemic happened. It is a continuous process. We are improving, increasing, spending and hope the company, the business can sustain going forward. Every year, we try to increase capacity and how it goes. Haslinda are you benefiting from cheap, Natural Rubber prices . At the moment, Natural Rubber prices are low. We are using a lot of synthetic rubber. That is also cheap. At this time, and Raw Materials are cheap. A lot of Raw Materials are cheap. I think market supply and demand is a situation. Again, its just this time that pandemic, the demand in the market for a month commodities coming down so there is an oversupply situation in the market, especially if you look at the oil price. Lower Raw Material Prices haslinda is also looking very cheap. Yes. Up and down. At the moment, its lower. View,aw material point of from the socalled market demand point of view, but there are definitely other certain price during this time, especially in malaysia. Its definitely at this time is a better time for us. When i look at business, we are not looking at this time. We are looking for longterm. I think thats important. Thats the point we are trying to get out of the, solidifying your future. Tell me about new markets. Andthis unfortunate horrible disease created new business where you hadnt done business before . Our product, i think we are supplying to nearly 160 countries in the world. So all the time, everywhere in the world. Consumption, definitely more in usa, europe, and probably japan. China also may be using a bit more. Or an countries countries using less. The other countries are more concerned with the socalled protection. Its normal. I would say that all the time is everywhere in the world. Are business supplies and many countries in the world. Business supplies many countries in the world. Mr. Lim, what about sustainability and improvement in your products here to make them more bio diverse . So thats why mentioned business is not just dependent on this sort of special situation to have more demand and more money. You are talking about longterm. We are looking at how to build a ,ompany, how to keep improving become more competitive in the market, create more things for the market. I would emphasize technology, how to use technology to create more value. Is mportant thing creation. How we commit ourselves able to be competitive in the market and how the company can sustain over a number of years. Our company has been in the market for the last 40 years. Thats a long time. I started the business back in 1980. It is still growing. Growing, it is still but as you look ahead, would you be tapping technology to make biodegradable gloves, for instance, to stay green, to be sustainable . See, as a responsible manufacturer in the market, i think to protect the environment [audio drop] i think thats our duty. Itself i thinkby is synthetic, i think everybody is working hard how to make it biodegradable going forward. This process still continues. Haslinda kossan Rubber Industries coo, thank you so much for joining us on the show. The head of Dubai Airports is confident that passengers will return to the skies once they believe it is safe. She is just not sure when that will happen. Hear our interview with Paul Griffiths on daybreak middle east. Why some economists dont think indias stimulus package will lead to a speedier recovery. This is bloomberg. Just at the start of the session in mumbai. , fromg at negativity here not mistaken, given where we were if im not mistaken, given where we were. 10 year yield certainly not study. Bonds steady. Bonds seemingly test lets have a look at some of the Industry Groups within the indices. Nonbanking finance companies. Ist we have right now is, india right now is india going to be offering 265 billion in liquidity. 120 million jobs shed during this crisis. Looking at our finance and some of these power finance, and some of these distribution box. Delhi is goingin to be injecting some 12 billion into 12 million into power. People are finding some solace and finding them as a haven given what is happening elsewhere on indian markets. Haslinda lets get more on that stimulus. India making more than 60 billion available to small and utilities. More details of the spending and Prime Minister narendra 265 billion dollars stimulus package will be reviewed in the coming days. And mega stimulus package. Your Research Suggests you are still not enthused about a speedier recovery. Why is that . Hi, so yes, i completely agree with you, it is a mega stimulus package. It has lifted the overall sentiment in the liquidity markets yesterday. As they say, the devil is in the details. ,f you focus on the details there is not much in terms of new fiscal spending. The stocku look at itket reaction this morning, had largely given up all of its gains after the announcement. You need to understand that if you look at national account, output is equal to Government Spending. Thats a really small proportion of indias gdp. You are unlikely to see any boost coming from consumption. Much additional economic spending thats going to take place. Largely, all of that is by way of credit guaranty. That does not help boost demand in the economy. Haslinda so having said that, what does the economic stimulus package really do . Is it really just about addressing liquidity concerns . That the, i would say economic package does achieve something. If i look at the latest growth projections that i had in mind, i was looking at a vshaped recovery or lshaped recovery depending on the Virus Outbreak on the fiscal aid provided by the government. The current stimulus package now lowers the risk of a stark recession or lshaped economy. What this is going to achieve , the is going to help credit provided by the government would in some ways allowed the bank to take all of this surplus liquidity to further go out and disperse that money within the broader economy. It reduces liquidity risk. Still, these measures do not do much in terms of lifting aggregate demand. Even if you look at the ,dditional 1. 6 trillion rupees 10 of gdp announcement, that additional fiscal spending also could very well come by way of cutting government expenditures elsewhere. While this does not really provide upside to gdp projections, which i expect to 4. 5 year on year in fiscal 2021. Nevertheless, it does reduce or lower the risk of an even deeper recession in the economy. Ok, what is the actual size of this fiscal stimulus being provided by the government, in your view . On the one hand, you just mentioned how they have been taking with one hand and giving with the other. There is also some double counting going on with regard to previous fiscal stimulus as well. Yes. ,f you look at the total size the size of the package announced by Prime Minister modi, which is 10 of gdp. We could largely break this into the parts. First is the amount of physical, economic package that has been r. B. I. s earlier port liquidity measures, which have that announced. That amounts to 3. 78 of gdp. From the remaining percentage of gdp, yesterdays announcement was about 3 of gdp. That did not content any additional fiscal spending, only 0. 1 percentage of gdp. Percentage,maining you have to get clarity from the government. Thank you so much for joining us. Plenty more ahead, including a look at Deutsche Bank accelerating its program and job cuts. That more. This is bloomberg. Just to getting some news coming out of the Intel Services telecom and Satellite Services company. It has applied for chapter 11 Bank Protection in eastern virginia. Still filing for that. It needs to spend more than that on clearing activities. This is also more complicated and nuanced than just meets the for chapter 11 bankruptcy for a Company Incorporated in luxembourg. That is what we have. Big fall for that stock overnight. There were reports that that filing may be coming and indeed, it has. Haslinda . Haslinda and of course, it is the way forward for innovation and growth. Taking a look at where we are in terms of the markets in asia, read across the board, taking the two from wall street overnight. Jerome powell warning of a long road to recovery and bigname investors not helping. David tepper adding to the pessimism in the markets, saying that perhaps stocks are overbought. The nikkei 225 currently up by 0. 8 . Japanese stocks of course getting that assurance from the economy minister insisting that deflation can be kept at bay. She says the boj and government are united in ensuring it does not go back to a negative cycle. The hang seng index down about 1 . The kospi also lower by as much. Checking on the indian markets, which are headed down, despite the stimulus program. Sun text, 1. 5 lower sensex 1. 5 lower. Bloomberg daybreak middle east is coming your way next. Announcer the following is a paid presentation brought to you by rare collectibles tv. The California Gold rush is considered to be one of the most impactful event to affect america during his first 100 years. It has certainly had a longlasting impression in numismatic history as well. The people of california soon needed a way to standardize the value of the new gold, so they set up as sayers offices

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