Million. Brazil is the worlds pandemic hotspot. Infections in india rising at the fastest in asia. The fed chief is staying neutral on u. S. Aid, dodging senate attempts to make him take sides. He says more help would be needed but stopped short of a full endorsement. Shery we are seeing further afterre of u. S. Futures stocks fell to the last part of the trading session. We have had a strong start in week but there was a report on modernas vaccine study did not produce enough Critical Data to ss its success. There are similar patterns with drug makers like gilead. We saw the selloff. The s p 500 fell for the first time in four sessions for the nasdaq was outperforming at one point but turned negative. Look at what oil is doing, seeing wti above the 30 a barrel level after closing at the highest in nearly two months. We have june futures expiring tuesday. A month ago when may rises plunged prices plunged, we are not seeing that reaction this time around. There is more signs of markets slowly rebalancing for lets look at how markets in asia are setting up. Investor optimism could be deflated. Kiwi stocks opening to the dance like, to snap a twoday gain in wellington into a session that brings up policy decisions from thailand, earnings from xiaomi and lenovo. Google watch the boj ahead of the emergency meeting on funding for Small Businesses and china expected to hold after last cut very weis point will get pulmonary sales data for australia. Forreliminary sales data april in australia. Imposed duties on barley exports from australia. More true troubles emerged, unsurprisingly is virus concerns and the latest fund manager survey by the two thirds believe we are in a bear market rally. While there was a jump in Global Growth expectations, 10 of those surveyed expect a vshaped ofovery with a second wave infections being debated being the biggest risk. Haidi which showed optimism over a quick virus vaccine has drained away with questions about the initial trials of modernas vaccine. Early they said they were safe and data shows immune response. Early nature highlighted by the Health Publication was enough to put a pin in investor hopes. Lets go to our opinion columnist. This is not new information. If you are accustomed to reading this early Clinical Trial data, this should not come as a surprise. No. Reading the biotech press releases is an art and science in itself. You dont always get as much data as you want or need and you need to put it into the context of what sort of work needs to be done in the future, how much data is revealed and the specific context for the data. In this case you had an entire market trying to react instantly to very new data, that looked at first glance white exciting. When you take a closer look, eight people is vanishingly small. And that note about protective antibodies, we dont know if that level of antibody that is actually protective in the real world against infection. We dont know if people who recover in the longterm are vulnerable. The actual baseline they are comparing against is not something we know has any real relevance. The bottom line is something people should have known from the start which is the trial with a few dozen people it is only intended to look at safety as opposed to actual efficacy. Tell you mucht about the much larger trials to come. I can only tell you so much. Gileadit reminds me of and remdesivir. What are we seeing in the treatment funds because the president is saying he is taking hydroxychloroquine and. Do we have any preventive at this point or anymore progress in the treatments . There is always ongoing progress, but when you talk about a hydroxychloroquine, there is no solid evidence it has an effect against the virus and even less when it comes to its usefulness as a prophylactic. Of, usingis evidence settings inf hospitals, it can mess up your heart rhythm. Whatever the data that president is acting on, it is not something reflected in the wheel the real world record. Remdesivir, similar situation with initial excitement about the positive trial but closer into the data, you have a medicine that in the trials, it was looked at to hope to get people out of the hospital re or somethingu to change the trajectory of the virus. That is why the stock dropped off. You have to look at the context of data and what it does. Hopefully in time we will get a vaccine, clinical antibodies that can be effective treatments, but we have to wait to get real verification how real they work. Looks like the market getting ahead of itself again. Max nielsen with the latest. We are getting a look across the bloomberg, hearing from the new york New South Wales state premier saying there will be no travel restrictions as of june 1 within the state. If you want to, you can go on a road trip or a holiday within the state, but nothing will be the same as before the pandemic. There will be extra planning, precautions and social distancing to be taken as well. Shery plenty more to come on daybreak asia for the rbnz 9 30 sydney, 7us p. M. In new york. Jay powell takes a virtual stand as lawmakers question his stance on whether more record stimulus is needed. Extreme behavior is on display everywhere in the market. We look through the noise. This is bloomberg. You are watching daybreak australia. Fed chairman Jerome Powell has dodged Senate Efforts to make him give endorsements, will an Stephen Mnuchin powell and mnuchin testified. How will says more fiscal help may be needed but stopped short of a full endorsement. China said president trumps threat to quit the World Health Organization is an attempt to shirk responsibility for americas failure to control the outbreak of the virus. The president attacked the organization for being a chinese puppet and said he is prepared to end u. S. Support and leave altogether. Beijing says it is an attempt to slander china. Leaders letter is full of mimi and possibly. It tries to mislead the public, to slander chinese efforts to control the pandemic. This is futile. China has taken another swipe at australia over calls for investigation into the origins of the coronavirus pandemic. Having put duties on barley and beef, they are now threatening to target wine and dairy. China is said to have drawn of a list of seafood and food that could face punitive measures and there could be a consumer boycott. The advice of australia we these australia to read original text carefully. Abandon political manipulation and return to the international community. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Shery u. S. Stocks fell for the first time in four sessions over optimism fading with the moderna study. Our next guest says there could be further economic disruption not even factored into equity valuations. Joining us now is rebecca felton. Great to have you with us. This reminds me of what happened with gileads remdesivir. Saw the rally and the selloff. Is this sort of volatility inevitable when you have a big disconnect between the equity markets and the state of the economy . Thank you. I agree with you because of the runup to the march lows and the fact we are sitting at 22 times the forward number. Looking at the calendar, it is still a moving target. In this environment, is it inevitable we will see the biggest, Strongest Companies perform Balance Sheets the smaller ones which would maybe not exist in the next few years . Weyou are spot on because as saw coming into the last several weeks, prior to some of the more Cyclical Companies beginning to rally, the Bigger Companies with the strong allens sheets, the recurring revenue stream were the ones showing the most strength. That is one of the reasons why we had tilted our portfolios to those sectors like tech and health care. Haidi do we see more of a comeback for small caps if we see the pickup in volatility . Spiritre still cautious we have seen on the days you have had the more cyclical types of sectors rally, the small caps and even the s p are equally weighted in that system. We are probably not out of the woods. Even with over 100 of the s p 500 having supported earnings, there is concern how smaller ,ompanies world will fare particularly if there is not a bigger stimulus package and if we see a resurgence in the vaccine. Given how much of the economy or how many people are employed by smaller businesses, the unemployment data continues to be worse. We are out from the november election six months and we are seeing the pandemic narrative, chinau. S. Being played into the campaigning and grassroots kind of communication ahead of november. How much volatility do you expect markets to brace for going into the elections . We would expect a fair amount and you almost dont see much of it being discussed today, which is one of the risks we believe it is still out there. With the bill that was passed in the house last week and the dollar amount at the front of it over 3 trillion, you heard the Senate Republicans saying it is not going to pass. You have got a lot of partisan entrenchment going on and it is not likely the senate will us anything before midjune. That will have folks worried that there is not something more pertinent on the horizon. Willis a time party lines start being drawn and people will have to think about what they are doing for state and local governments, many of which have june 30 at the end of the fiscal year. Shery when it comes to fundamental changes whose pandemic, should investors factor in that these resellers, we saw it was a really mixed bag with walmart outperforming and calls missing expect it missing expectations. With the new element of the postpandemic world, which could include more margin pressure for essential workers, more cleanly cleaning and tweaking in a way they operate their business . That is right because companies that reported today did make their top line or number but missed on the bottom line because companies are having to pay more for childcare , double overtime, higher hourly wages and that sort of thing. It is likely that will continue for some time which will keep margins under pressure. That can result in lower valuations across the board for some of the retailers and Hospitality Industry companies as well. Always great to have you. Riverfront investing group rebecca felton. Our next interview is coming up, the rbnz governor joins us at 9 30 a. M. In sydney. More on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u. S. Retail names next. This is bloomberg. Shery retailers have been among the hardest hit by the plandemic. The pandemic. We now have the latest round of earnings. Let me get started with walmart. They beat expectations but they withdrew guidance for 2021. How wellpositioned are they . Allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. But omar tidwell. They increased samestore sales but walmart did well. They increased samestore sales. They are providing people what they need. Haidi in terms of forward guidance, do we have any expectation what they think the next recovery could look like . It is not clear. They are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what walmart is selling. Difficulties other retailers are facing, but are not selling those things that people have drawn back on buying items like clothes and other things they dont think as timely for this moment. Cold seems to have kohls seems to have struggled. Their online sales did not. Jumped 60 . Ales that was a testament to them focusing on digital marketing. Last month pretty much all of their stores were dark. Said theyis, the ceo can only replace a small proportion of sales lost to the stores. The stores are still pretty important to that end that company. We have seen highprofile bankruptcies, j. Crew for example. What do we expect in terms of, is there going to be further to come or have we see most of the pain and we are focused on what the recovery could have with the reopening . Marcus,w, neiman jcpenney all filed for bankruptcy. And this person thinks her company is wellpositioned to gain market share. Jp percent jcpenney is closing one in four stores. The stores are still important to consumers. The other Department Stores could win over those customers in areas where jcpenney [indiscernible] shery thank you, joining us with the latest on the retail earnings out of the u. S. We have breaking news. We are seeing that brazil had 17,408 coronavirus cases. This would be a new daily record area when it comes to the number of deaths in the past 24 hours, a new record of 1179. Brazil has been emerging as a new hotspots. We are talking about their new cases accounting for 13 of new cases globally in the past week. Now we see the new records, whether it is new cases or deaths around brazil which has the Third Largest number of cases in the world. Now the business flash headlines. Haso as outperform baidu outperformed. Signaling a return to growth this quarter. Sales fell 7 to 3. 2 billion in the march quarter. They are forecasting Revenue Growth rate of they have been diversifying ad rival seats putting extra says putting extra seats quickly to airfare soaring. Social distancing on a plane is impractical and could mean a jet flying with just 22 people on board. Tickets could be a or nine times more than before the pandemic. 5 tas is currently flying capacity domestically and 1 internationally. U. S. Airline stocks reacted weakly as demand for travel could be picking up. Southwest Airlines Says bookings are starting to outpace cancellations for june while united is producing cancellation rates and fees moderate strengthening of demand domestically and on international routes. Delta has seen a slight bounce in leisure bookings. Haidi staying on the complete destruction with travel demand, we are awaiting the latest numbers from sydney airport, announcing april domestic passenger numbers saw a contraction of 70 . International passenger flow for 96 . Was down it makes sense given we have just seen qantas for example running one or two, a handful of flights a day on the bare minimum flights with travel restrictions. Congress is calling on jay powell to settle the argument over when and how much of the net next round of fiscal stimulus should be. His outlook is next. This is bloomberg. Erg. Haidi you are watching daybreak australia. Global confirmed coronavirus cases are approaching 5 million with fatalities above 320,000. Brazil is now the pandemic hotspots. Infections in india are rising at the fastest pace in asia. Deaths linked to covid19 in the u. K. Surpassed 40,000, making it the worst the first country in europe to reach that threshold. Virus cases in india have topped as the nationwide lockdown is eased. India is among the nations worst hit by the pandemic with a 28 rise in cases since last week. Singapore will allow more businesses to reopen from june 2 for the bombing 75 of the steadystate economy will be back to work. From june 2. That means 75 of the city states economy will be back to work. The bank of japan will be meeting and could talk about a lending program. They aim to show practical stances for business and followup meetings of this fed and the the fed and the ecb. European union offering a lowquality trade deal as talks between lenders and brussels to send into they say the u. K. Is unworthy of a fair agreement has told their counterpart in brussels to think again. Michel barnier a once says k. Once the benefits without being a member. A cyclone is expected to make month on your the bay of bengal wednesday. Near the bay of bengal wednesday. Been difficult because of the lockdown and social distancing in the coronavirus. Federal reserve and jay powell stuck to his guns reserve chairman jay powell stuck to his guns on capitol hill, dodging attempts to get him to take sides on how big the stimulus should be. Kathleen hays joins us. Really Jerome Powell has been vocal for a Federal Reserve chair when it comes to fiscal stimulus. What did he say . Kathleen he is in a delicate backgroundse of the for the quarterly assessment of the cares act, helping workers assess workers displaced by the virus. Republicans are pushing back against democrats pushing hard towards more stimulus. Dont wait to see what has happened with the pieces in place for lets get more. Jay powell was called out on the times he has said something more will need to be done. If you think he agrees with the democrats is he saying he agrees with the democrats . I want to call out the risk, longterm risk to the economy. That is what we are doing. We could have to do more and congress may as well. there is a good example of how a fed chair tries to make a point, which is you think the job displacement, it will take longer to bring people sow the work, this could seeds for something worse like in 2008. It could be something approaching a depression with longlasting consequences. He did repeat when asked about this something he said a lot. It has a lot to be unemployed so long that you disconnect from the labor force and it becomes a problem that will take a long time to correct. Of lasting damage to the economy, to the labor force because of longterm unemployment and unnecessary avoidable insolvency, those things create a risk. Kathleen unnecessary insolvency related to bankruptcies. Jim bullard has spoke about this , if people dont get back to work. Secretary ofin, the treasury, said he got pushed back from republicans. He continued to argue, go towards reopening, get the economy on track. He said this could cause permanent damage. Upwill see, but let me sum by saying it doesnt help either side for a republicans or democrats. They will have to battle it out and see who wins. You will be speaking with someone who has also demonstrated willingness to do whatever it takes when it comes to getting the economy back on track, the rbnz governor. What are the issues for him and what will you be tackling in the conversation . Kathleen he is an interesting central banker. He went into the meeting of the reserve bank of new zealand last week with everyone wanting to hear about what he had to say about negative rates. If they were to move towards that, it might not be until spring next year. It is one question what would make you move, what are you watching . His assista