Brent also lowered to about 2. 3 . With treasuries. Havens like the dollar, the yen. We saw where the nerves are with dollar renminbi. Seeing the hikes inching closer for dollaritory china right now. 6. 4 ,ing a contraction of so we could be seeing a deeper contraction. Financialrom the secretary paul chan saying we could be facing the worst contraction on record. The rupiah seeing some strength here. The carry trade has been coming back. 14,000, 935 around 14,935. The trump ministration is stepping up its attack on china, saying that there is enormous evidence that the coronaVirus Outbreak emerged from a lab in wuhan and china covered it up. Secretary of state mike pao stopped short mike pompeo stopped short of saying the virus was manmade. While the Intelligence Committee continues to do its work, they should continue to verify so that we are certain. I can tell you that there is a significant amount of evidence that this came from that laboratory in wuhan. Business confidence in the u. K. Slumped the most on record last quarter as leaders say they see no recovery. Respondents to a Deloitte Survey say they expect revenues to be 20 lower this year than previously thought and they dont see demand returning to previrus levels until the middle of next year. Hong kong says the virus may trigger the citys worst economic slump ever. Secretary paul chan repeated his view of a contraction as much as 7 this year, which would be the deepest fall since records began in 1960. They expect an economic decline of about 6. 4 for the year. In australia, sydney is to restart Public Health auctions next weekend as the government continues to ease restrictions. New south wales has seen volumes collapse as there has been a suspension of traditional selling practices. Australia has seen around a dozen new cases of coronavirus each day for the past week. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im karina mitchell. This is bloomberg. Tom thank you. Manufacturing pmi released across asia today are as bad or worse than expected as coronavirus driven lockdowns in the region and the rest of the world take their toll on demand. Policybal and economic editor Kathleen Hays is here with the numbers. A new record set today for contraction, not growth. Who was hardest hit . Kathleen six countries reporting. I have to give you all their numbers because the numbers were not so great to pretty bad. South korea did not fare too 42. 1 to 41. 6. In any other Business Cycle in south korea, asia, the world, you would say, how week. It is just that so many other countries have done much worse. Lockdowns in asian nations, lockdowns overseas have held their toll. Vietnam, from 41. 9 to 32. 7. You have to be above 50 to signal growth. This is contraction written large. 27. 5. Sia, down to the philippines, 31. 6. 46. 4 to 41. 3. These are numbers we have maybe not seen ever. South korean inflation rose to 0. 1 yearoveryear in april and 1. 0 in march. We know, when the bank of korea. As made recent rate cuts it should be may 28, just a few inflation and, as exports are weakening. Cutting rates more, we shall see. Bloomberg economics coming out with a terrific piece. They actually see the asian pmis index improving this month because they are looking at lockdowns starting to ease up. Some countries in europe, some states in the u. S. They are expecting that even if things do not get that much better, they will start getting worse. Is full ofs week economic reports from chinas trade report to the unimaginable u. S. Jobs report friday. What is the focus for you . Kathleen the end of the week is where it really gets hot, but i think you have to watch inflation reports, certainly in asia. Notthere are contrarians working because of lockdown, they think that ultimately, stimulus, big debt and deficit, that eventually, that will feed through to inflation. Indonesia today, philippines and thailand tomorrow. There growth rate is holding pretty steady. Philippines, a little bit weaker. Saying that there is room for easing in the philippines this year. Is going into further negative territory. As you mentioned, the trade reports for china, exports down 13. 3 yearoveryear. Now we know that china has worked to build up spending. There is a long lockdown in china, people reluctant to spend money as they get back to work. Remember, china, that is another reason why asian nations are experiencing weaker pmis. China, the number two economy in the world, not as much of a driver as it was. Payrolls expected to fall 21. 3 million in the month of april. The jobless rate is expected to hit 16 . Yvonne thank you, our Global Economics and policy editor Kathleen Hays. They fouryear bet on airlines stocks. We will check on asian carriers. Capitals edward lim sees a market bottom. We will discuss what markets and stocks are gaining his attention. This is bloomberg. U. S. Equity futures decline. We are seeing stocks open lower in asia to start the month of may. In world 10 rally shares in april, now being tested as investors assess efforts to ease lockdown restrictions amid a steady stream of ecodata. Lets bring that all in and ask for more from edward lim. Riskhould we look at heading forward in the month of may . Do you think that partial recovery is as good as it gets . Edward that is a very good question. The market has basically retraced more than 40 from the bottom. If you look at past president , where we arery in terms of however, we basically have this kind of price action one month into a recession. I think the market is due for some correction. Run up a little bit too much, too fast. In terms of, we could be seeing more of a correction, inld we retest the lows march . I think come before us retest the lows, two things have to happen. New cases, second wave of epidemic coming true. Hoping that it will be the last couple of months. Is economiceason fiscals, connected over and monetary policy. I think we looked at the numbers here, we tabulate in terms of the fiscal stimulus so far. More than 5 trillion, the u. S. Announcing another 434 billion. 6 of gdp, tohan offset the potential Economic Loss we are modeling for the rest of this year. Issues different from what they are expecting right now. Tom if you do get a significant correction in may, do you look at that as the ability to extend exposure, and where would you be looking at that as the case . At equityvie looking exposure we would be looking at equity exposure. Increasing equity exposure in late march. The last couple of days, taking that down. The market has run up too much. Deploying the risk correction. Where would we go . I think it would be effective in the same sector that we like. Still, a highgrade debt. Inequities. It is just really looking for structural trends. Now, ample, Service Software service company. Iny are actually operating terms of the forecast for the year. Microsoft come on the back of the teams application, and things like zoom communications, y are operating in a world structural trends that would not be derailed whether covid19 and lockdown extends further. Tom where do you see the opportunities in the debt market . Central banks of course stepping up. Where do you want to be positioned when it comes to debt . Edward in terms of regional for em to be focusing on highgrade stay away from highyield or highyield exposure, less than 20 . Looking at highgrade, thestmentgrade debt in commercial markets. You mentioned fiscal stimulus, Central Banks. Is that enough for us to see some positive returns this year . Eps growth for much of the world, it seems like it is still in negative territory. Edward the analysis a couple of weeks ago, looking in the last , do we ever get the stock market to return . I think there has been seven occasions in the last 30 years where eps growth has been negative. Of the seven occasions, six of them equity markets returning possibly six of seven. We try to analyze why that is the case. The reason is this. Epshe six occasions, the stock market return was positive , we actually had where either there is a fiscal stimulus or monetary stimulus. Qe1, qe2, qe3,t ecb,nset of qe1 with the all of these occasions have coincided with monetary and fiscal stimulus. Expecting eps growth this year perhaps down 18 . 6 of global gdp, central bank oflowship s increased to 70 gdp. Yvonne it was back in late january, before this demo really spread before this pandemic really spread, that you are seeing opportunity in macau gaming stocks. It has plunged close to 100 . Have you changed your holdings . Edward no, we have kept our exposure in macau gaming. We have recently added equity exposure. The premise is that we are looking at market leaders, some of the big guys. No revenue, instituted only a moderate cut. How long do these Gaming Companies stay liquid . That in have the view 18 months time, the lockdown will continue in the form it is right now. We are quite happy to be holding onto the debt. On one equity, last week of the names. Tom edward, thank you very much. Adding equities when it comes to the macau gaming space. Edward lim of covenant capital. Macaus gaming revenue for april falls almost 100 . We will get the details. This is bloomberg. Things are not looking good for macau after the Gaming Sector saw its worst ever month on record. Lets bring in our gaming reporter. Macau has managed to keep the Virus Outbreak contained. Why do you think the numbers for april were so low . The april number was down all of this time, the money could have been made in one day. The main reason was, in late march, china and hong kong stepped up their Border Control because the virus was making its way all over the world. E can see no operators some casino operators saying there are virtually no customers. People have to be quarantined for 14 days. For half a, closed month, they are losing millions of dollars a day but they dont have any revenue. Tom when are they going to see some improvement, do you think . Right now, there are coronavirus cases in macau, hong kong, china tapering off, so we are seeing very few increasing in the latest days. This month, we think there will be relaxation of the travel curbs. Macaus chief executive said that he will ask china to increase a number of cities coverage so that in the future, when these virus cases are over, maybe we will see more of the individual travelers being able to come to macau. That will be a boon for the whole industry. What are the analysts sector you about the right now . Are they saying it is a chance to buy on these steps . Dips . These jinshan regarding the cash burn, actually they are sitting on a large chunk of cash. They all can last for one year or up to more than six years for the case of galaxy. We are seeing signs of improvement in may and the coming summer. Already a lot in april. Of course, the evaluation now is cheap compared to average historical levels. We are already seeing investors coming to pick up the opportunity here. Consumers and china have already been hampered by the drop of the virus in the past month. Whether they can come back and consume like before, it is a big question. Tom thank you for bringing that down for us, consumer reporter jinshan hong. U. S. Airlines with a difficult start to the week after news that Warren Buffett has dropped all of his holdings. He told the Berkshire Hathaways livestream that he sold all of his stake saying that the fallout has probably changed the industry forever. Say koreanm Seoul Airlines will call a Board Meeting this month to discuss a rights offer worth more than 800 million. The carrier will also consider asset sales to help navigate it way through the collapse of air travel. They say the government is prepared to offer help if the korean carrier agrees to restructure its business in light of the virus. Lufthansa expects to finalize talks with the government soon on an aid package as an alternative to a bailout. They say they are having a Constructive Exchange with berlin and hope to resume flights as soon as possible. Lufthansa is locked in talks with the governments of germany, switzerland, austria, and belgium. Coming up, we look at how the world has changed for the aviation business. Upside. Sees an this is bloomberg. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. 10 29 a. M. In shanghai. White house sources are telling bloomberg that President Trump had two Intelligence Briefings before he imposed travel restrictions on china. On january 23, he was told the infection was set to spread globally. But that the infection would not be deadly for most people. A week later, he said that beijing was not sharing key data about the pandemic. Japan will start plans to restart the economy. The restrictions allow prefectures to shut businesses and allow people to stay home and work to end on wednesday. India is also extending is locked down by two weeks. Infection rates in europe continue to decline. Extend its shutdown until july 24. Fatalities in spain were at the lowest since march. New pictures of kim jongun did little to help evaluation of his spirits. There was no comment on the fact that he had been out of sight for three weeks and he had missed celebrations for his grandfathers birthday anniversary. With hiss show him sister. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Plenty of red across risk assets right now. The hang seng leading those losses. We are seeing it down 910 points. We are expecting gdp numbers later today. Philippines and the singapore and jakarta down by more than 2 . South korea dropped to the lowest level since 2009. You have this fear of renewed u. S. China trade talk. Each side is now trying to blame the source of the virus and who started it. You are seeing u. S. Futures lower than 50 . Yield sticking lower when it comes to fixed incomes. We continue to see that fallout. Watching when it comes to currencies as well. The dollar seems to be catching a bit of a haven bid. Could be wrong. We are seeing some weakness in malaysia. Some of these risk currencies like the aussie dollar are falling. Tom Warren Buffett is reversing calls on his airlines. It is interesting because he said years ago that he got burned by that and was sucked back into the trade in 2016. That seems that he is having regrets. That is quite a signal from Warren Buffett. Was trying tone get some more insight from him during that shareholders meeting. It seems like he is usually pretty bullish. He tempered some of that optimism. Is equitiesnks it that could outperform treasuries over the long run. Ittainly this reversal when comes to airlines will be a key focus for many investors out there. A perfect set up to our next guest. Tom he said he could not read consumer habits. Recentlyguest has published an indepth report on covid19s impact on hong kong. How bad will things get in when what turnaround . For hong kong the story is that much not that much different. Aviation, the longterm trajectory is still very firm. We believetterm there will be a lot of damage. Tom how much of this comes down to liquidity . We see Cathay Pacific as being the best positioned airline to have liquidity to carry through the next months. We dont see the same for a lot of our smaller airlines. Some of them were suffering for coronavirus hit. It is crunch time for them in the next month or two. We could see them falling off the map. Yvonne there seems to be pentup demand out there right now when it comes to Cathay Pacific. How quickly can they fill that capacity . Is this a chance for them to gain some market share given their dominance in hong kong . Looking at consumer and demand, we do see a lot of demand. Everyone is edging toward that again. The big issue is travel restrictions. Domesticlly is no market in hong kong. In order for them to ramp up operations, countries across europe the two open up. This is the Biggest Issue facing Cathay Pacific. Every Single Airline is facing the same issue. It is really just a matter of whether or not they can survive. If they can, they have a chance to gain a lot of market share. Yvonne how do you see the asian industry . What was at look like post covid19 . Will Consumer Behavior change . Will we see capacity cuts remain in place . Higher fares . What do you see as some of the biggest consequences . They will definitely be in the shortterm lower capacity. A lot of the airlines borrow on the fact that they lead the market. They will be cutting the capacity. The other thing is Business Travel. We are not sure how well Business Travel will rebound. It might be slightly better. But it really depends on the global economy. Certainwe think that big airlines have the capacity to adjust. If they can survive, it is a pretty big opportunity for them to take their competition in a new direction. The consolidation story, how well played is the chinese mainland airlines . In terms of potential acquisition . Will they be on the hunt for some of these bargains . Or will they be preparing their Balance Sheet and restructuring . We think the mainland carriers are in a pretty good position. It is basically what we saw in the u. S. Market. Market ishe chinese primed for that wave of consolidation. Possibly not this year. But in the next two or three years, we see them stopping up a lot of the smaller carriers in competition