Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Suggest a post virus recovery. Highest andsides smart and Mark Zuckerberg toends the response controversial president ial tweets but his unstaffed is not agree. But his own staff does not agree. To shrug offng tensions on the streets, curfews being applied in major cities. We are seeing asia heading into the wednesday session looking likely to extend the basking in the globe we saw overnight. We have nikkei futures in australia as well as in hong kong, all pointing to a positive start to trade. The dollar fell overnight, the yen also slunk leading to some positivity out of trading. The rckiwi pair trading at its highest since october, really an indication as we see these outperform, investors feeling risk on despite gdp numbers that could show the first technical recession we are headed into in about 30 years. Pretty flattrading after seven consecutive days of gains. Americans are bracing for another night of unrest. Cities have extended their curfews. Trumpile, president feeling embattled on all sides for his violent response to peaceful protests at sign the white house and across the country. Our reporter is on the line. We are seeing bipartisan criticism here of the president. Absolutely. Ago, trumpst one day was giving a speech out in the rose garden, saying he supported theeful protesters, but at same time, protesters in Lafayette Park were being teargas and remove so that trump could walk across the park to st. Johns church for a photo option he held up a bible. Republicans and democrats have come out. The only black republican senator has said that teargas should not have been used to clear a path. A bishop in the sea called the move baffling and reprehensible. You are seeing congress try to move forward with legislation to start discussions about what can in terms of justice for police and treatment for black individuals. Heidi emily, what has been the response to the pretty extraordinary announcement he would put it use the military to put an end to these protests. He said yesterday that if states dont take forceful enough action, he could use the insurrection act, a 200yearold law, where military personnel would carry out operations in the u. S. , which is otherwise not allowed. You have seen trump get on the phone until governors they need to be aggressive, we have heard the same from william barr. I think the response he has seen from at least the number of governors has sort of been that they are trying to handle protests in their own way. In many states, these protests have been peaceful and have not led to riots and looting like we have seen in some cities. So its interesting, the interplay here. Trump has said he wants to let governors handle things and yet we have seen he is ready to go ahead and wield federal power to make sure things have the outcome they think needs to be there. Shery we have been hearing more from Vice President joe biden. How will these shape the elections . Biden has faced a lot of criticism that he has not been out front on the coronavirus with the protests, consider that biden could not do the normal rallies the handshaking, a lot of these events that he would be doing right now if it were not for coronavirus. But we are seeing restrictions lifted, your see in we are seeing ayden back at biden back out. Were starting to see biden get out there a little bit more and rise up as the potential counterpoint to what we are hearing from President Trump. We always appreciate your time, Emily Wilkins there with very latest out of washington dc. Up them a on the protests. We are joined by the Western University professor later this hour. Chris westup next, joins us to give us a few protestsas these continue to brush up geopolitical and social tensions. This is bloomberg. Shery lets get to the first word headlines. The pentagon is distancing itself from President Trumps threats to use the military against protesters, saying it would be better to rely on the National Guard for law enforcement. Some active duty forces have been placed on heightened alert or possible deployment washington, officials tell us the Defense Department would prefer other options to restore law. The government of tokyo is issuing new warnings. The capital recorded 34 new Coronavirus Infections since tuesday, a daily high. The governor triggered what she called the tokyo alert, which could lead to businesses being closed down. They see many of the recent cases have come from nightlife and use and hostess clubs. Vethen use and hostess nues and hostess clubs. Property values fell in the biggest decline since the financial crisis. Thank of england data showed borrowing has collapsed with households repaying the most since records began in 1993 as the virus hammers sentiment. And its allies are entering closer into a deal to extend opec adduction cuts while still discussing the next meeting. Theyre sent to favor another month but it is not clear if that would be enough for saudi arabia. Producers worry about a damaging price for. War. Heidi investors are continuing to buy on optimism of the economic reopening story worldwide. Chris weston is from the pepper stone group and is in the risk of favoring gap. Are they managing to shrug off the other risks . Chris i think the Balance Sheet program expansion, that is something people definitely continue to talk around. But anything will give you sent youre, anything that gives better times and has that market. That path is going to put a tailwind to the markets. The openings, the highfrequency data, it is improving. Obviously, you have liquidity and fiscal measures as well you have got to add in other functions as well. The idea that the systematic crowd is filling their boots at the moment and have flipped to a long position in are trending beautifully across futures and all descriptions. They are doing so in the u. S. As well theres a lot of institutional money on the discretion side that needs to come into the market as well, so i think it is a combination of factors. The liquidity argument is one that has appreciated that. s rotation still the story Going Forward . Intontinue to see rotation cyclicals or out of the stayathome pandemic into those that go out reopening . Value has been a big talk the last couple of days. Its a problem if you are looking at the value growth argument. Despite property or oil moving , there is nor moving or breakevens. The still anchored at 55 basis points and 61 on 10. If we were to see yields moving higher, that reinforces the idea that you want value overgrowth. That then continues to be quite an interesting trade. Curve,ork higher in the thats a big if. , triggerss to happen for equity will broadly come under pressure. Cyclicals continue to outperform offensives and thats where we are looking to position ourselves at the moment. Where are we in the currencies market . Chris there is obviously a lot of capital that was deployed into the u. S. When we saw the Capital Market lockdown. We went past the stage and went with currencies and transactions. It was such a concentration of capital in the u. S. Because of this synchronized whove in global assets, it has asset that out and managers are very long euros at the moment. At the moment you look at other currencies, obviously it has been very strong indeed. Reflection that people want to suggest. If you tell me where the s p is going to go, i can tell you where the aussie dollar is going to go but there could be a secondhand kicker. It is going to reinforce the idea we have also been saying buying an fx as well that continues to be a currency. So in this environment of risktaking and that suppressed volatility in fixed income and real yields where they are, we can continue to expect pullbacks and risk exceptions to be fairly shallow. Chris i certainly like the aussie dollar higher. We are getting to the stage where the news flow may resonate , but you have got to look at the rba. It just barely passes what they are saying. Seeing. If they plan to fix the markets, fix the markets. They are well below target and have not got bonds. I think they are very happy with way things are going and people happens people have been paying divergence for those currency pairs. It still favors thes of leith the path of least resistance. Heidi does gold still remain attractive or does the weaker dollar pay into that on the others as well . Chris the dollar is obviously a contributor to that. Right now, they are lifting a catalyst and it is just going sideways. Something that is really going to move prices upward. We have really found a shortterm fair value. I still like gold as a longterm asset with its ability to spread the variance. Like it from that perspective. If inflation was here longerterm. Gold is going to get it on in the shortterm. There will be higher Inflation Expectations and nominal bond yields staying. That could be a big catalyst for gold markets. They need to get capital shortterm from the bond market. At the moment, we are missing that. Longterm, we still see attractions because of the way the benefits spread correlations. We have seen reports that joe biden has won the democratic the wayial primary and forward to secure the nomination. We were also seeing and if sos 47 saying that biden has voter support versus 37 President Trump. You aredering how assigning risk around the potential results of that election. Chris when you think of the investment banks put together, where thereituation are taxes and have impacted the bottom line positively. These companies are now starting to underperform. That tells me the market is and his policy being somewhat hawkish starting to resonate in certain areas of the stock. The pure volatility play has yet to be seen we know what we are getting with biden, certainly more than other democratic candidates, but there are other areas that are starting to be more affected by his hawkish tax policy. Now, if it was down to the popular vote, biden could be fairly confident. Electoral college mode, the system probably has trouble somewhat ahead. Has biden somewhat ahead. The democrats need three new seats to get the senate. It could then become more of a market or volatility story. Heidi great to have you with us. We will have plenty more to come on bloomberg daybreak asia. This is bloomberg. Shery wall street of dozens of chinese firms from document changes. He spoke exclusively to blumberg about the risks he sees from american investors. Bloomberg about the risks he sees from american investors. With Chinese Listed Companies versus other u. S. Companies, it has gone on for too long. Step, lets make sure they understand it. , kennedy and van hollen to have a bill that has a very sensible approach to this, which will give people time to level the unlevel playing field. And we are about it going to figure out what to do about it. Is this enough of a practical matter . I think the rule is, if you dont allow access, you get delisted. Do we need that kind of power . First, exposure. But i do think about if we need more to level the playing field. Is a veryou mentioned sensible way. Before youople time take any action. Im not a guy who wants to take precipitous, nail on the head tomorrow. If you dont, then its time to take measures beyond. We have watched this over sometime. It was different than at least some of the big Mega Cap Companies that we know the name of. You bring up a good question. It applies in every market. Financial controls, audit , thereres and the like are a lot of Smaller Companies that have operations in china and investors might look at those differently from the multicap or state owned enterprises. I am not an expert on international investing, but i do know you shouldnt look at a particular jurisdiction in a monolithic way. You should look at an International Company that derives a lot of revenue from outside that jurisdiction. Do you talk with your counterparts in beijing and china . Save you want to harmonize and cooperate open up the markets. There any process of that harmonization coming about . We do talk to my counterparts around the world. Theres nothing i have said to you that i have not said to them , that this is a problem that i believe needs to be addressed. I hope it can be. Are you hopeful . Guy, imn optimistic optimistic because i know that at some point, hope is not a strategy and you have to do other things as well. Is it doable . Something you could enforce without too much difficult . Difficulty . Yes, it is a sensible piece of legislation and it captures the issue, in a way. I tried very hard not to Tell Congress what to do. Way to a very sensible approach a problem that has been around for a while. Heidi that was the fcc chairman speaking to us. Coming up, we continue to discuss the ongoing protests in cities and states, bracing for another night of unrest. You are looking at live photos of whats going on in milwaukee as protesters are lining up, facing police for another night of unrest. This is bloomberg. Heidi this is bloomberg daybreak asia. Itself then is military against protesters, saying it would be better to rely on the National Guard. Shery some active duty forces have been placed on high alert but officials tell us the Defense Department would prefer other options to restore law and order first. The state of minnesota has filed a civil rights charge against the Minneapolis Police department for the killing of george floyd. It will investigate practices and policies to determine whether the department has discriminated against people of color. There have been years of retaliation and determination against minorities. Zuckerberg has defended his decision not to censor up roast from President Trump that threatened protesters. He has been criticized by facebook staff who feels the message violates their policy on violent rhetoric. They told staff that facebooks policy team could not justify the message that clearly incited violence. Joe biden could clinch the democratic nomination in the stateshours, this seven in the district of columbia hold president ial primaries. He is 646 delegates short of the number he needs. However, with Bernie Sanders still on the ballot, wide and may have to wait another week to claim the right to challenge President Trump. Shery cities across the u. S. Are being hit by protests over years of incidents between White Police Officers and a black americans. Our next guest said we are living through the perfect storm of historical events. Michael flamm joins us on the line aired great to have you with us. Telus first what you mean by this perfect storm. In the United States, we are experiencing an economic crisis, health crisis, and looming ahead is a political crisis, so this is truly a historic moment. Shery when it comes to the ongoing protests, we continue to see violence and looting. How much will that affect the protest movement . Unfortunately, the violence and looting may discredit the andtimate grievances positions that Peaceful Protesters and demonstrators are trying to make. I also feel that it may contribute to some sort of political backlash. May see the revival of law order politics in the United States, which tends to help and benefit conservative candidates. You just pointed out the interconnectedness of that has led us to this perfect storm snaring. Scenario. Does that mean that this movement has more mainstream momentum behind it . I do think that this round of , they have more support from whites in general. They have more support in this case in the polices conduct is so brutal. Murder or homicide. There is a typical Police Shooting which takes place in a split second. It is surrounded by murky or confusing events. This was such a clearcut case of injustice that has moved many, many people. Heidi there has been criticism of the violent nature of protests and violence. The other side of that, as protesters are say, is that we have been pushed to our limits. They havestem perceived to be inherently racist and set up against the. Is that the case, and if so how do you move forward to be able to actually change that system . That is. I also think it is important to understand that you are really talking about three different groups of people participating in these protests. Out whoe those from wants to demonstrate peacefully, express grievances, and express clinical change. Then there are the curious onlookers simply want to observe. Then unfortunately, there is the third element that tends to come out under cover of darkness that is interested in smashing, burning, and looting. I thing it is very important to those three in mind and not let the third group overshadows the legitimate political message they are trying to put forward. Difficult because the kind of changes they would like to see are going to take years to accomplish. Professor, we have seen President Trump tweeting about the liberal governors and mayors who are weak. Much of this issue is because of partisan divisions and how much is just president way . Try to frame it that President Trump is seeking to exploit a partisan division that already exists on almost every issue in the United States. Even wearing a mask during the pandemic has become a partisan issue. , conservative white men are not. President trump ran as a law order candidate in 2016 and he woke hopes to win reelection as the incumbent by revising this law order issue. How long will this issue last . There are still months left before the election. Ans this miss you have effect that could impact another outcome . It could. But in the United States, we are living in a stern ore times where you think you see the story of the year, in a week later you are on another. Im not sure the story will have staying power. I would add that it is very difficult for incumbent like President Trump to run on a law order platform. After all, if he wants to decry the loss of law and order United States, they could easily turn that around. So i think President Trump himself may want to distance himself from this issue in the coming weeks and months. And yet he is running headlong into it, right . He is using this to appeal to so far as talking about the Second Amendment and the right to bear arms in the remark that he gave yesterday. That is absolutely true. He is certainly using it to mobilize his base and he may continue to try to deepen the divisions on American Society by widening the divide and law order. President trump is, if nothing else, extremely unpredictable and prone to taking actions that dont always benefit him politically. We also saw bipartisan criticism of the way the president had protesters violently removed to set up that photo opportunity in front of st. Johns church where he posts with the bible. Found out that it was a lawenforcement order that came from the attorney general himself. How concerned is that make you about the protection of civil liberty in the u. S. . A great deal. We are headedthat towards a political crisis. This upcoming president ial the mostcertainly be important since 1968. Yes, i am deeply, deeply concerned. Shery part of these violent protests is also the looting. Seems to come from a place of desperation. How much does this affect minority communities . We know that minority communities have been disproportionately affected hard by the pandemic. It is the greatest unemployment since the Great Depression in the United States and also minority communities have been disproportionately affected simply by the pandemic itself. Looting also coincides with good weather. We are experiencing the first true summer weather in the United States. But unlike previous rights, this is now taking place in the Central Business districts of the United States. We are seeing it in new york city and other places. , rioting and looting took place in poor neighborhoods and that made it relatively easy to isolate what was happening and the rest of the cities and urban areas. That is not happening now. Writers and looters are moving into the heart of the city and political areas as well. Really great to have you on with us. We appreciate your time. Michael joining us with the latest on the protests. Back top next, we are 2019. We have the threat of no deal brexit looming as the u. K. Continues to deal with the fallout. We have the latest. This is uber. Bloomberg. Shery the United Kingdom is facing increasing threat of a no deal brexit, creating another obstacle for the pandemicravaged economy as it heads into the worst recession in 300 years. Our economics and policy editor is here with more. Its interesting. Taken theinfo had back burner for a while as we grappled with this covid issue, but what happens next . Kind of a perfect storm for the u. K. And for boris johnson. He is having to once again deal very seriously with brexit at a time when his government and nation is trying to deal with the pandemic. It really caught my eye today that the u. K. Chancellor of the exchequer warned of a severe recession, the likes of which we have not seen. Beyond that, he says it is not obvious there will be an immediate bounceback from the lockdown that has had a Significant Impact on the economy. The bank of england is predicting that a three month lockdown will cause the worst recession in 300 years for the u. K. A chargee a look at now just to give you a sense of where it is and where it could had. Head. Theall decline, up a bit in third, flat in the fourth, and in the first of the year, down 2 . A recession has started, and now when you hear the bank of england talking about a 14 drop in the entire year, you can see how negative growth could become. Its interesting that the u. K. Is going into negotiation with the eu negotiators ahead of us on that a summit at the end of the month. Risks are growing that they wont get a deal by that deadline, even with somebody months to go. That is a large part because Boris Johnsons government keeps moving out any delay in the departure, even though they are fighting the pandemic. Is because saying they want to for the cost of a , evenl brexit departure though it is already in the eyepopping, mindnumbing costs of stimulus to fight the pandemic. There is a group called u. K. In change in europe they say no deal brexit could cost the economy a drop of about 8 over the next 10 years. Surprising that citibank and others are saying we could see the bank of england actually be forced to cut its rates and move into negative. That is the big step somebody Central Banks are debating. There will be more talk of what kind of stimulus, not just physical, but monetary, might occur to fight off all these forces hitting the u. K. At once. Shery kathleen talking about stimulus. Extending is already the highest gains since march and there could be more german stimulus coming. What do we know . Angela merkel is very serious. On the second stimulus package, there are two sides but the Ruling Coalition is going back and forth over big differences in what they mean to do. Already initiated one round of stimulus and guarantees and now they are trying to pull back from a contraction specked at the 6 this year. That would be the worst since the aftermath of world war ii. Democrats christian and social democrats are looking at a number of proposals and the gaps between them are extending into tomorrow. Now,ke it simple, right social are pushing for spending that could approach 100 billion euros. They want to limit the amount of new debt. The Christian Democratic Union help toe additional help small and mediumsized companies. Ways, one of the most contentious issues they are looking at is a possible sales bonus for the car industry. The germans are looking at it. Neither have much appetite right now for subsidizing automakers. Thats understandable however, the economy minister is arguing could only return if the companies withs big auto manufacturers often find that no matter how you cut it, they have a lot of workers in their in germany is one of the most export pendant countries in the world. They are keeping the industry going, looking down the road to when they do recover. It is very important for them and it seems like as the talks continue, some kind of deal will to me, it echoes the kind of divides we see in Major Political parties. Ec republicans and democrats grapple over the same kinds of thing. Heidi Kathleen Hays there. Shery coming up next, mark kerberg feels that response to his own employees and civil rights leaders. This is bloomberg. Shery the United States has posted an update to hong kong travel advisories. This is a light of the chinese law when it comes to the National Security legislation being worked on in beijing. It is being issued with updates on chinas introduction of that security law, saying americans should exercise increased and thein hong kong arbitrary enforcement of laws other than maintaining law and order order. Mark zuckerberg is feeling the quotever a controversial from President Trump the ceos over and own response. Sarah frier joins us from san francisco. Zuckerberg has said that, unlike twitter, he does not think that trumps post is in any way inciting violence. Looting leads to shooting and of course, it did in fact result. Whether because of the post or not, there was a lot of Police Violence over the weekend and so employees were upset that they did not act as though they could have. In an employee meeting today, zuckerberg told the sorry, we are not reversing our decision. A response and they are standing by the decision. He also had this call civil rights leaders on the recent protests. How did that turn out . Not that well. Civil rights leaders were understandably upset. They have had several of these calls and meetings with zuckerberg over the years, always trying to push him to be a little harder on violence or racist rhetoric on his platform. But zuckerberg says, listen, we dont want to be arbiters of right or wrong. Are just trying to be platform where people can see updates from people they care about. Say he ists leaders ignoring the fact that facebook systematically rewards content that will rile people up. Shery and it has caused some platforms to postpone announcements. What is the latest . Itis a bit difficult is a difficult time to announce product because a lot of people think this is a moment we should be listening to underserved communities in america. For companies especially is a difficult time to say look over here. At people tried to get their messages out and trying to be heard, especially at the black lives matter protest. This is something a lot of corporations are saying, lets take a step back. Let them have their moment to really communicate this to the country to avoid this having to happen again. Sarah flyer, are louvered tech reporter there with the latest on facebook and how big tech is responding. Lets get you a quick check of the latest headlines. The coronavirus upheaval has now seen zoom report quarterly estimates that top estimates is video piracy translates into more paying customers. Through april,0 more than analysts were expecting. It was almost double their forecasts back in march. On peloton has reached alltime highs after warnings that some may not return to the gym soon. Stayathome orders have forced people to change their workout regimes. Isattled startup we work said to be in talks in london and canceled an agreement with a developer. A lease would have been of two buildings with only the small remaining. Investors and landlords have become wary of we work amid the disruption and the collapse of its ipo. Hour, theon the next market opens in tokyo, seoul, and sydney. We speak with a guest for her outlook as markets continue to shrug off all of the unrest and uncertainty. Ey as theyeak to speak to consumers around the covid19 crating permanent change in spending. All of that coming up on the next hour of bloomberg daybreak asia. Plus, the market opens are almost with us. This is bloomberg. Welcome to daybreak asia. Australia, japan and south korea have just opened for trade. These are our top stories. President trump under fire for his Washington Church photo op. Critics and religious leaders say clearing protesters by force was an abuse of power. Asiapacific stocks set to fall follow wall street higher, suggesting opposed virus recovery. The s p 500 seeing its highest since march 4. Even so, there are fears of a second wave of infections. Tokyo issues a new alert and businesses may be told to shut down again as new cases spark. Spike. Lets get a quick check of the markets, kicking off trading in japan, the nikkei gaining 1. 4 , being led higher by energy and Information Tech companies as well as financials. We have more upside for wti and brent, rent nearing the 40 per barrel level. The japanese yen weaker, surpassing the 108 level against the u. S. Dollar. Weaknessn significant in the u. S. Dollar, the lowest level since march. Look at what the kospi is doing, railing more than one person at the moment, the korean won also strengthening more than six cents of 1 , and the kospi gaining at the highest levels since february. We have seen the First Quarterfinal gdp revised upwards. Of missing a little bit expectations, leaving room for the be ok to act. We are seeing a positive start when it comes to trading in this part of the world, despite an and future uncertain future looking at the data from australia. There could a first technical recession in about 30 years for the country. Still, gains on the day for the asx, following the leader sentiment. The aussie dollar holding strong. 68. 69 u. S. As indication of the risk appetite. Aussiekiwi the highest since 2008. New zealand stocks up about eight tens of 1 . A quick note on oil, some significant indicators suggest positivity as well as stability returning to the crude market. Towardrrent nudging equitation for the First Time Since early march and volatility when it comes to brent pricing, also down to the lowest in about three months as we headed potentially to 40 per barrel. We will be watching for that level through the day. Lets get more insight on the markets j. P. Morgan Asset Management investment. Janet, great to have you. We continue to see investors opting for risk over caution, shrugging off any concerns about trade or geopolitical and social tensions, be it in hong kong or the u. S. Is this a Market Driven by liquidity at the moment . Term i think for the near , there are forces driving the direction. On the positive side, macro indicators showing stabilizing. Numbers. Ok at the gdp we also have stimulus. If you look at the earnings that have stocks even if you look at the earnings that have stocks deteriorating. But on the negative side, you have rising geopolitical tensions between china and the u. S. , and the u. S. Itself. At this moment, [indiscernible] engineer an economic recovery. [indiscernible] term,g into the medium we are constructive on asian equities for two reasons. Number one, asian governments are generally wellpositioned to provide stimulus if necessary. Herer two, the companys are catering to the rising middle class in asia. Number three, equities are attractive, around four times. Overall, i think we have been constructive in asia. How does the rotation change . Weve been talking about rotation, value versus cyclical versus growth, and the idea that maybe we start rotating back into some of the unloved sectors during the pandemic lockdown as they start to ease. In terms of the structural rotations you are already beginning to see, do they still play out . Janet i think this is a good question. The past two months, we have seen a relatively what we call a growth sector. Retail space, health care space. [indiscernible] the partly because of [indiscernible] over the longer term, we are still more comfortable with the structural growth sectors. Sectorshe pandemic grow , Online Shopping and entertainment come online education, or even i. T. Already we have Lifestyle Changes and companies in asia. The past few months have only accelerated the structural trends. Believe these companies and earnings will move forward. I believe we are more comfortable with growth in these sectors. We have many of those companies in the chinese market, whether it is alibaba or baidu or tencent. How are valuations looking across china right now . Good i think you make a point. We have a lot of companies and , not just offshore, but there growth is in shares as well. As is concerned, we dont have an issue mainly because these companies are really generating solid growth. If you look at the Earnings Results from some of the giants in ecommerce recently, they continue to remain positive. Names, recently the guidance statements paint a more positive picture. I think while valuations look a little high, it is really about earnings. An issue and remain comfortable with these things. And we continue to see the Central Banks in china trying to support lending to Smaller Companies. How will the pbocs actions play to the market . Janet i think in the meetings last week, we had already there is no change in the overall policy direction, but in terms of the monetary side, i think china has become slightly more accommodative, including higher ratio financing to growth target this year. I think overall, the sentiment should be quite accommodative, while there might not be theessive cuts, we believe environment should be supportive for equities in general. Would you still consider, if you look at chinese assets, for them to be standalone and largely unaffected by some of the more broad regional slowdown factors . Particular if you buy into the story that they were first into the crisis and therefore the first to come out and see a more robust recovery. Janet i think china has been doing quite well this year, and varmint hase global a role to play. Global environment has a role to play. Environmentals remain healthy. [indiscernible] in tech or health care or consumer. We also have traditional cyclical like energy. In areas robust trends like i. T. Or health care, we believe the market has a lot of interesting opportunities. That is the market itself. Macro go back to the environment or policy environment, the support remains there. We dont really have any issues. Number three, at also mentioned that the overall valuation is quite reasonable. I think overall, while we have to be aware of the situation globally, i think the key is really to look at some of the longterm opportunities in asia, and china. Janet, the ecbs meeting this week and is almost certain to increase bond buying under the pandemic emergency purchase program. Im wondering what you think the implications would be for broader risk assets within the g10 space, amber taylor for emerging markets as well. In particular for emerging markets as well. Janet [indiscernible] two competing forces. On the positive side, we have stimulus feeding through. Whether you are talking about markets in the u. S. Or europe or even japan, we have additional stimulus last week. Global overall, the Central Banks or global toernments, they are trying engineer a recovery with a whatever it takes approach. Supportthey do have the to do that in general. Jp morgan assets management, thank you for your insights today. Still ahead, the cautious consumer. Or joins us. S also, the latest on u. S. Protests in past impacting business. We had to los angeles and look at unrest across the u. S. This is bloomberg. These are the first word headlines, you are watching daybreak asia. The government of tokyo has issued new warnings to residents as coronavirus cases spike. 34 new infections on tuesday, a daily high in more than three weeks. Started what she called a tokyo alert, which could lead to business being closed again. She said many of the recent cases have come from nightlife venues and hostess clubs. Consumer borrowing plunged during the pandemic lockdown. Property values fell 1. 7 last month, the biggest the klein since february 2009 in the aftermath of the financial crisis. Showsf england data borrowing has collapsed. The virus is hammering sentiment. Former Vice President joe biden could clinch the democratic president inr the coming hours as many states hold primaries. 470 nine delegates are up for grabs today. With Bernie Sanders still on the ballot, biden might have to wait another week to claim the right to challenge President Trump in november. Indias Financial Capital receipt for a rare storm with a cyclone building over the arabian sea. It is due on the coast in the coming hours, disrupting business and daily hours as they battle coronavirus upheaval. It is packing winds of 120 kilometers per hour. Move by has not seen such a powerful storm mumbai has not seen such a powerful storm in a decade. Americans bracing for another night of unrest as protest continue. Cities have issued curfews, including here in new york city. Meanwhile, President Trump is being better on all sides for a response to peaceful protests outside the white house and around the country. Joining us with the latest is our l. A. Bureau chief. How bad is the situation in los angeles . Weve seen plenty of violence and looting in new york already. Chris it is bad. Last night, giving a personal example, my supermarket and one of my local drugstores were looted. In hollywood this morning, broken glass everywhere from places,s to momandpop goods stolen and they were having to clean up the mess, calling insurance companies. It has been another day of protests. Three or four very large ones marching in the streets, thousands of people today, and unfortunately what is in the pattern the last four days is these peaceful protests turn worse as nightfall comes. Of socialse, a lot media activism we have seen has come from your part of the world, from hollywood, from big studios, from celebrities. How is that playing out when it comes to the corporate side of things where you are and has there been a backlash or support . Support, the social media trend with some people in the music industry, and some people took today off in solidarity from broadcasters to clothing retailers, sort of making a statement. But social media is being used also by some of the unsavory folks to coordinate and basically attack buildings. Leadersrmed groups of looters and use it to stay ahead of the police. What has been the reaction to President Trumps latest remarks on how he is dealing with not only the protests but also the violence . He has talked about sending thousands of troops if governors in theors cannot rein violence. How is that received in california . Chris not very well. There seems to be a feeling that part of it is bluster on the part of the president , sending in the army. We already have National Guard troops on the streets of los angeles. Saw new york Governor Cuomo criticizing the handling of the riots in new york by mayor de blasio. So we are seeing tension on all fronts. Chris, great having you with us. Our bloomberg l. A. Bureau chief. Youre watching live pictures of l. A. , and now we are taking you to denver, colorado, where we are also seeing protesters outside. Right now is looking like it is still a peaceful protest, but we continue to see people on the streets as more u. S. Cities extend curfews, including in new york. You can get a roundup of the stories you need to know to get your day going, including the latest on the protests across the u. S. This is the latest edition of daybreak, bloomberg subscribers can go to your terminals, or the bloomberg app. You can customize it so that you only get the news you care about. This is bloomberg. We have brent and wti futures climbing higher in the wednesday asian session, the highest since early march, right before the collapse with the price war. Lets get to our Energy Reporter in sydney. We have oil trading above these levels that we saw when the saudis and russia begin the price war. We are looking at the 30 per barrel pricing for brent. A lot of indicators for a positive uptrend. What is driving the trend toward normality . Definitely a more normal type trading than what we saw a month or so ago. Markets pushing toward the 40 per barrel level. In the immediate term, the theet is august on opec and meetings they are expected to have this week. We seem to be moving toward an agreement to extend production cuts for at least a month, maybe up to three months. I think the market needs that to sustain the rally at current levels. If you remember a couple of weeks back, shale producers in the u. S. Were already preparing to drill more wells if the market goes above 30, and its been above 30 for a while now. Russiaslso signs that are maybe wanting to that russians are maybe wanting to ram production up again. There is a risk we could go backward in terms of price. We will learn more in the meeting later in the week. Seen these, we have Oil Storage Facilities come off from highs, there is a gtv chart on the bloomberg. Willie coming off the highs since in may. Will this have an impact on what will this have an impact on the decision opec makes . James it is finally balanced. I think opec be wary of what is going on in the u. S. In terms of shale producers. Obviously they wont want to be caught out. They wont want those u. S. Producers to be taking market share. Its a fine balance to draw. Russia historically has been the one pushing to get output back up again. Its usually important for their budget to get oil revenues coming in. They will not want depressed levels of production too long. Saudis have been hit earlier in the year and will want to get back to normal levels of prediction production as soon as they can. Just come weve only out of a period of extreme volatility brought on by the covid lockdown. There will be an awareness that any steps to prematurely put production back into the market might cause another pullback in the price. It is pretty finally balanced and what we saw this week is marcus traded fairly is markets traded fairly sideways. I think that will be the way of things. Our Energy Reporter in sydney with the latest on oil. Lets get a quick check of the latest business flash headlines. As nissanom the u. K. Considers a car plan in the northeast, unsustainable if there is no brexit. Nissans commitment to the u. K. Could not continue. Nissan has invested inss in the factory, that employs about 7000 staff and suppliers. Under fire after losing all of its female directors. Sources say the londonbased Investment Association put out a report criticizing aspen aston for its lack of diversity. A canadian billionaire became executive chairman in april. Indias Biggest Airline will keep adding new planes to its fleet despite travel demand being crippled by coronavirus. Indigo is the worlds biggest airbus, for one type of and plans to replace its older planes in the next two years. The pledge was made despite canceling dinans reporting a fourthquarter loss of 115 million. Next, a preview of the upcoming gdp numbers from australia. We will ask how the coronavirus pandemic is affecting the economy. This is bloomberg. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. We are just getting breaking news crossing the bloomberg, when it comes to pmi readings out of singapore and hong kong. Singapore, the market pmi for the month of may coming in at 27. 1, falling further from the previous contractionary levels of 28. 1. Singapore is just emerging from the strictest of its lockdowns. Unsurprising as weve seen Economic Business and manufacturing essentially grind to a halt to get the infection curbed. Singapore pmi. Inhong kong, weve been contractionary territory over a year. We have seen the rebound continue for the third month and it is quite a rebound, from 36. 9 at 43. 9 forth may the hong kong pmi. Still in contractionary territory but certainly showing signs of recovery. Lets see how the markets are reacting. We see broad upside when it comes to the nikkei, the kospi, and qe markets all gaining ground were talking about the nikkei getting on was to percent at the moment. This will be the Third Session of gains. We have pmi services and composite numbers. Before the final numbers for may, a slight improvement and better than the preliminary numbers. Services coming at 26. 5, that still in contraction territory. 44th consecutive month. The kospi at the highest level since february. Also, First Quarter gdp revised upward. We have seen energy Companies Really leading the rally in asia as we continue to see the upside for oil prices with the brent approaching 40 per barrel. Gdp numbers for australia due out in a little under an hour. The country is edging toward its first recession in over 30 years. Isy a modest contraction expected this quarter. This is kind of the first step thewo to potentially losing 30 year winning streak and economic expansion. Thats right. First quarter gdp expected to see a contraction of 4 10 of 1 and that is a consensus. Others see less of a contraction , including bloomberg economics. Some brave souls think we will see a modest expansion. But the definition of a recession and australia, two consecutive quarters of contraction, and it is the second quarter, the one right now, that is expected to have the worst impact from the coronavirus shutdowns. It is possible but not the base case that australia could dutch the technical definition. On the upside, we have a survey from the university of New South Wales showing us trillions were world champions in panic buying in preparation for the lockdown. Government spending also providing a boost during the First Quarter. Constructionin activity, business investments, inventories, and huge hit to the Services Sector all point to the contraction in the First Quarter. The reserve bank founded optimistic about the economic recovery. I guess it is no surprise that they made no changes the policy yesterday. Change iss right, no expected. The cash rate and three year yield target still on hold. The governor repeated the same sentiment in a statement that he expressed a Parliament Last week. There are some reasons for optimism and he sees the possible dip of the downturn could be less than expected. Togives credit for that unprecedented fiscal and Monetary Policy support. The rba and government are really acting in concert to address the impact of the lockdown. He emphasized that the support could will be needed for some time and the future remains uncertain and a lot will depend on business and Consumer Confidence Going Forward. That refusal to change policy settings did give a boost to the aussie dollar and bonds as well. Our paul allen in sydney. Next, tokyo issues a virus alert as new cases spike. We assess whether businesses will again be asked to close their doors. This is bloomberg. , this is daybreak asia here are the first word headlines. They usedpolice admit smoke bombs and pepper spray to clear protesters outside the white house to allow President Trump to walk to a Historic Church that has been damaged by fire. The agency said it cleared demonstrators around Lafayette Square after officers came under attack. Witnesses say the protests were peaceful and riot police fired rubber bullets. The pentagon is distancing itself from President Trumps threat to use the military against protesters, saying it would be better to rely on the National Guard for law enforcement. Some active duty forces have been placed on heightened alert for possible deployment in washington, but officials tell us the Defense Department prefer other options to restore law and order. State of minnesota has filed a civil rights charge against the Minneapolis Police department over the killing of george floyd. It will investigate practices and policies over the last decade to determine whether the department has engaged in systematic discrimination against people of color. Minneapolis police have faced years of allegations of brutality against minorities. You are watching live pictures there as the u. S. Braces for another night of unrest. We are looking at the scene when it comes to houston at the moment. Protesters gathering. The ongoing turnouts in the u. S. Are stoking fears of an uptick in covid19 cases, as you can clearly see the lack of willingness or inability to social distance. Experts from Johns Hopkins hospital, the nurse manager there saying there are precautions demonstrators can still take. I am going to speak to the science. There is a lot we dont know about covid, but we do know that masking, the social distancing, the avoiding situations where there was a lot of projected speaking, like in churches, talking about not singing, those types of things. Those are things people should be very cautious about in however they respond to these events. Atlanta and i believe the director of Public Health in new york recommended covid testing for participants, and i spoke with my colleagues here in the viral containment unit and we think that is a good idea. We want people to be cautious about the testing because they can have false negatives and false positives, but i do think dois a responsible thing to if you are participating. Obviously we are talking about the general public that may be putting themselves at , whether they notice or not. As a nurse, and for the medical workers out there who have no choice but to go to work and be exposed potentially to the virus, can you talk a little bit about some of the measures that have been taken to improve the protections they have so that we can make sure they are able to continue doing their jobs . Sure. I will speak for Johns Hopkins. One of the things we have done is that almost a daily, we have information from our Infection Control team. Any patient care situation, we are wearing a face shield and a surgical mask. If we are in any type of environment where we are either working with the covid positive patient or a patient under investigation, a patient tested and we dont have the results back, we would be wearing a face 95, along with what is called a personal assistive respiratory advice device. Those are some of the options we have here and we are very thorough about that. Here at Johns Hopkins, we have been dealing with this pretty much since january when we opened the bio containment unit, and we are very comfortable speaking to each other and saying this is what you will need in this situation, please make sure you take extra time, these make sure youre not in the situation where you are so tired that you might make a mistake when you are taking off ppe. Im not sure if you have the answer to this, i know information is coming in moment by moment, but from your hopkinsive, is johns bracing for a second wave . Is that built into your expectations . It feels like from a market perspective that they have almost forgotten about the second wave risk. I think it is prudent plan for a second wave. Whether that happens in july or in the fall, we dont know. Our situation at hopkins has been fairly stable. We are at about 100 patients and that has not changed in the past two weeks. One of the messages im getting out to my staff is that this has not gone away. Even though we have seen some stability in patient population, we still have no vaccine for the virus and no immunity as human beings. So the planning we are doing is in preparation for what could be inevitable, and if it doesnt happen, we have done the training and set up the protocols to be prepared for that. The Johns Hopkins Bloomberg School of Public Health is supported by michael bloomberg. As schools restart across japan, and south korea is reporting outbreaks elated to church. Tokyo is sticking to the phase reopening despite the pickup in cases. Japanese authorities anticipated increase in cases, ill be at small, the emergency was lifted nationwide. An alert was triggered in tokyo after the case count rose by 34 and tuesday, the biggest jump in over two weeks. The governor maintained it does not mean an imminent change of reopening plans after the city has students going back to school. The governor does ask to rein in night loft nightlife activity. 1. 8 millionea, some students are expected to return to school while there are concerns about a second wave in the metropolitan area is linked to nightclubs, logistics center, and recently a small church in a western port city. As of tuesday, at least 45 cases have been linked to that church. In terms of what we are seeing in hong kong, or their concerns we are seeing new clusters and the reopening being threatened . Theie certainly, given increase in cases and a small uptick. Two days shy of relaxing rules, the government has decided to keep limits on public gatherings to eight people. Case count rose by six on thursday. Two of those were linked to a Public Housing estate that had been earlier flagged as a potential super spreader site i a microbiologist at hong kong university, who was also calling for more widespread testing in hong kong to better detect community infections. Currently the city tests up to 2000 people per day. In indonesia, where testing has been low, there is a push to get activities up and running as millions lose livelihoods. In western java, the most populated province near jakarta, the lockdown will be gradually eased for 15 cities, starting with places of worship in phase one. Stage two. Sites in places in stage three, and then schools and tourism in stage four in these Public Places and job. In java. Sophie kamaruddin with the latest on the virus. Coming up, the impact on Consumer Spending as economies reopen. Will consumers have the front spending habits as sentiment continues to be affected . We get the latest with patrick winter, next. This is bloomberg. We have breaking news the moment. We are seeing on brent crude above 40 per barrel for the First Time Since march. It is at the highest level march 6. We are seeing four sessions of gains for oil and we are seeing more news that perhaps opec and allies are edging closer to consensus on extending production cuts. Sources telling bloomberg that russia and other opecplus members have edged closer and are favoring expanding production cuts at least by a month. Lets get a quick check of the latest business flash headlines. Wei suffering another blow with two canadian wireless comedies planning to use quitman from equipment from europe. Nokia will be used. This comes after the prime ministers decision on whether from canadas next generation wireless plan. Wash scrutiny after a unit sued for unpaid fees. They have two weeks to respond to a claim in hong kongs high court. Demanding half a Million Dollars to cover an agreement signed in 2016, hna was once the top shareholder of Hilton Worldwide and Deutsche Bank before its acquisitions preturned sour. Acquisition spree turned sour. Our next guest says the pandemic has made consumers around the world understandably cautious and that will not just disappear when lockdowns and. Patrick winter is eys asiapacific managing partner and says that Companies Must adapt to anxious consumers. He joins us from sydney. Great to have you with us. Tell us about what youre modeling has found about how consumers are behaving post pandemic. Patrick good to be with you. It is clear that the covid19 pandemic has changed every aspect of lives across the world and the experience of living through the pandemic has made consumers naturally cautious. Latest consumer future index, which we just released, looking at over 13,000 consumers globally, we had a strong focus around asiapacific and in particular china. What this is telling us is there is a high degree of caution. A high degree of caution, as you simplyat will not disappear as lockdowns are eased. In particular and china, what we are seeing as the country comes and itshe pandemic consumers come out of lockdown and social distancing, that they are really continuing to be cautious. We are getting this concept of the anxious consumer and it will be very important for all businesses and industries everywhere to understand the concept of the anxious consumer Going Forward. Consumer anxious buying at this point . If they are, what are they buying . Patrick it is interesting, the anxious consumer is someone who went into the pandemic in almost a save and stockpile mentality. You saw panic buying in countries globally and throughout the asiapacific, whether it was toilet paper, tinned food. Andng out of the pandemic releasing social distancing, the focus is on things like fresh food, personal care, cosmetics, beauty products, footwear, clothes. The anxious consumer, its interesting what they are buying, it looks like they are coming out wanting to eat better, look at her, dressed better. They are continuing to buy, but continue to be quite anxious about how they interact and consume. We spoke with the president of Leng Crawford a couple of weeks ago and he talked about signs of revenge consumption, and reunion dressing. Are these trends that will peter out, or is it something you could potentially continue to see, particularly from the high consumption, younger demographics seeing economies reopen like and china and other parts of asia . Interestingh, it is , the analysis weve done particular around china, and theres a lot of focus on china, because it was the first in and out of the pandemic, nearly 50 of those surveyed in china strongly agree that the way they live and shop will significantly change as a result of the pandemic. The issue will be how long we feel that change will be, permanent or shortterm or mediumterm . There will be a focus on the china consumer for the rest of the world. China is the biggest consuming country in the world and there will be a big focus as to how that view changes the chinese consumer. Is this an ingrained change as to how the consumer looks at the world Going Forward . Is it a shortterm change or something that will blowout into the longer or medium term . We continue to report on the protests and unrest across the u. S. And the devastation for people of color and allies, we are also seeing a social Movement Toward saying support companies being led of people of color, i allies. By allies. Is that something you expect to see in the consumer space in a bigger way . Werick its not something have seen in the index we have done, and i will leave little cool debate the politicians, but the issue we will see is the change in Consumer Behavior potentially. How consumers will look to consume Going Forward, what they will consume. And the focus as i said before, around the concept of personal health and feeling healthier and better coming out of the pandemic. And the concept of what they will do Going Forward and how they are going to focus i think there will be a strong focus from the consumer Going Forward on personal health. I think that will be a strong focus for a consumer. With the world at the moment, whether that will change that, only time will tell. And of course part of that health is mental and social health. Patrick, thank you for joining us, patrick winter, ey asiapacific managing director. Lets look at markets right now. Asian markets continue to bask in the glow of the u. S. Markets rallying. The nikkei to do five up by close to 2 . Yenwiki and slump weak slump overnight impacting trading in japan the kospi up about 1. 9 percent, and australia gdp. Ng despite the weak thee will continue to watch ongoing unrest in the United States. We are looking at list pictures out of boston. We have seen curfews expanding largestome of americas cities, including here in new york and washington and boston as well. This as we continue to see more and more economies reopen. We are talking about new york reopening on monday, chicago entering the next phase of reopening plan scheduled on wednesday. We are seeing markets across asia holding steady. Monitor theto latest developments across the u. S. As investors continue to watch how this could affect the markets. So far, its not made much of a dent to the rally we have seen across the u. S. U. S. Futures gaining for tens of 1 at the moment as we continue to see oil rally with brent above 40 per barrel. And of course, we are watching live pictures out of washington right now as protesters are still out and about as President Trump has pledged to forcefully enforce peace if protests turn violent. Thats it from daybreak asia. We are looking a hide ahead to trading. China open is next. This is bloomberg. It is not 00 a. M. In beijing, shanghai and singapore. Am tom mackenzie. Our top story, President Trump under fire for his Washington Church photo op. Critics and religious leaders say clearing protesters by force was an abuse of power. Asiapacific stocks extend the global rallies as investors bet on a quick recovery. U. S. Futures