Several u. S. States report record numbers of cases. States reconsider plans to open. To data inadds australia. Shery lets get started with how u. S. Futures are kicking off trading. We are seeing them down. 1 after u. S. Stocks ended in positive territory but off session highs. We have speculation congress will seek additional stimulus. We also have some positive manufacturing data, although not in expansion territory as of yet. The s p 500 finished at the highest level in almost two weeks. Consumer discretionary and tech lead the gains, and the nasdaq composite again finishing at an alltime high. Eight sessions of gains boosted by apple and amazon as well. The dollar declined among most g10 are his. We did get that positive economic data. Improvements not only in the u. S. But also the euro area. Take a look at what oil is doing at the moment. We are seeing wti falling toward 40 a barrel, under pressure right now, really falling from that threemonth high ahead of a release of a key u. S. Government report that is expected to show another increase in inventories. Paul it was kind of a weird day on a weird day on us trillion markets yesterday, things getting whipsawed around by Peter Navarros remarks around trade. For look at how asian markets are shaping up today, lets get to sophie in hong kong. Sophie asian stock futures looking mix, so we could be headed for a heated open after we saw u. S. Stock gains fade into the close, keeping an eye on tech as well after the sector helped to boost some of the events on wall street, and in japan, we are keeping an eye on retailers after early sales data from some companys signaled a post pandemic retail recovery. We do have two great decisions in asia with thailand and new zealand seem staying pat, and as our collie points out, with online bond by think even the yield curve flat, it could be has been in line with diminishing demand as funding stress has eased, given this massive liquidity injection we have seen from global policymakers, and pulling up this chart on the terminal, that targetn shortterm crust basis swaps keep steady with a small premium for the dollar, and as Central Banks scale back the emergency swap lines, thats expected to weigh on the greenback with shock swaps seen over the next two weeks. Remain, and that could spark a second round of widening. Shery markets watching those headlines very closely as we get new market cases continuing to soar across hotspots here in the United States. Daily infections reaching new highs in california, texas, and arizona, threatening to throw the reopening process into disarray. Top infection expert at than he felt he told lawmakers he is concerned by the spread. We are seeing a discharging and one infections, things we have seen is an increase in community spread. This is something that has been in the press over the past couple of days. A reporter who covers health care and pharma is on the line. E are not seeing an end really, the coronavirus outbreak not taking a summer break. That certainly seems to be. He trend honestly, it is not all that surprising, considering that some of the states that have seen these renewed waves started opening up, in some places, quite broadly without having really gotten their initial outbreak entirely under control, and when you have some level of the virus circulating in a community, even if it did not create an initial wave, as that the continue during is that opening continued, you are seeing the consequences, but also heading into the fall because it just makes any further openings, especially heading into a possible concurrent flu season even more difficult. Paul what was the impact of this resurgence going to have on plans to reopen the economy . Any responsible leader would take this as a sign rethink restrictions on reopening. Its pretty king lear its pretty clear from case growth in terms of testing, and terms of making sure businesses are complying with mandates, just working or that people were not you have to get that back in order. Theres also the fact that theres sustained spread in the community. People simply are not going to go out. They are going to do they are not going to do any of the Economic Activity they are hoping to prompt. There is sort of this dual economic sword. If you dont take action to sort of restrict it, you are just going to end up hampering the reopening anyway just by people trying to protect themselves. In phase two of the reopening in new york city, but how unique is the case in such a dense city . A lot of the cities see guidelines that are continuously being updated do not really apply. That is something that will be difficult, especially in later stages when you have people getting back to the office. The cdc recommendation is to avoid taking Public Transit if you can. That is simply not an option for most new yorkers, and then you get to the issue of schools where, you know, ideally you want to have some degree of distancing for students and staff, but, you know, if you have ever been to a new york city public school, the notion of getting hundreds of kids in and out of classrooms its going to be very difficult. I think the key Going Forward is to try to keep incidents as low as possible so that these activities, these you know, daily life, it is fundamentally a little riskier here can be as safe as possible. Paul thanks so much for joining us. Still to come, singapore has announced its timeline for elections just as the country enters phase two of its reopening. We get a preview of what to expect. Next, abba downings deputy so joins us Abbott Downing deputy cio joins us to talk about her outlook. This is bloomberg. You are watching daybreak australia. U. S. Treasury secretary Steve Mnuchin says he expects the economy to emerge from recession before the end of the year as the administration considers another round of stimulus payments in the coming days. Speaking at bloomberg investor global events, he says into resolution is being drafted and should pass next month and that he is confident in the recovery. I think you saw a recent employment numbers. We put 2. 5 Million People back to work. Clearly, this is the ppp working, and you saw great retail sales. I think you are going to see the economy had a very bad second quarter. I think they will see a spectacular rebound off the bottom in the third quarter. Isl the u. K. Government , calling onus curbs people to use common sense to keep the virus from spreading. Allowing hotels and retail to reopen next month. Johnsons optimism weakened by the message from his own medical advisers who say coronavirus still carries a threat. Now trustws just 23 beijing to act responsibly on the global stage compared to 52 two years ago. Confidence in xi jinping to handle World Affairs has almost half just 22 percent. President trump does not fare much better only 30 trust him. Shery lets turn to the markets. U. S. Stocks rallying for a second day tuesday but fading into close as concern arises that a spike in cases could curb consumer activity. The deputy chief Investment Officer at Abbott Downing joins us. For viewersrt showing how the economy has been stuck in that waitandsee mode. We are seeing the s p above the 200day moving average, but it seems the markets are looking for another catalyst for a leg higher. What could that be . Come as soon when earnings announcements start rolling in in a couple of weeks. Similar to what you saw in the first quarter, people will not pay much attention to the numbers but will pay a lot of attention to the commentary. You have Companies Really leaning in to changing their Business Models and rearranging reallyand acting proactively. You will get investors giving them the benefit of the doubt figuring that looking out on this years numbers, you have the potential to have some pretty strong earnings after resetting everything this year. Shery perhaps does it help that some of the weakest businesses may have already been weeded out, just as naturally what happened during a recession . We have seen, in fact, bankruptcy filings in the u. S. Total 117 for the first half of the year, but its the highest since 2009. Last week, 13 u. S. Companies seeking bankruptcy protection, and that would be the highest since the Global Financial crisis. Sort ofecession playing a cleansing role for businesses, and it could lead to, perhaps, a healthier market as well . It definitely is. You took any trends that were in place and gave companies a free pass to go ahead and accelerate business plans. Most investors understand that Company Margins are going to be hit. Company numbers are going to be hit, so this is the time to really drive aggressively into repositioning businesses because you are getting a buy for the quarter if you are a company ceo and strategic team. Those companies that have proven they can lean into that and do that and accelerate the Business Model rearrangements they were already in the process of doing really does to it up because as you mentioned, we have not had that good, thorough cleansing in almost a decade. Your point on earnings, we are seeing some pretty giddy price to earnings multiples at the moment, even if earnings season and guidance blows expectations out of the water. To what degree has the good news already been priced in . Is tough to talk about valuations in the next quarter or two because so Many Companies withhold guidance. Doesg to evaluate really not make sense, but i think investors are thinking beyond 2021 in thinking that if we had not had this pullback, we would be 11 or 12 years into the uptick and people would be wondering when the next downturn came and did not have the chance for nice, doubledigit kinds of. Arnings increases this last three or four months and the pandemic and resetting everything as hermetically as it has been allows you to rebase things and allows companies to be able to absorb some you know, there will be margin hits in what Companies Need to do to be proactive going into this new environment, rearranging supply chains and creating social distance. A lot of things will impact longterm margins, but the margins next year assuredly will have to be better than what they are going to be this year. Paul we were discussing earlier in the show this apparent resurgence in coronavirus infections, particularly in california and texas. Problem hasgue the never really gone away if we see markets not seem to care. Is the main game in town still the fed . Never mind whats going on, the liquidity tap is just going to stay on forever . That is what markets are tanking on and it is a little concerning because there are a lot of things out there, the president ial declaration on the hightech space is going to impact the tech industry. Its not like we are out of the tods and everything is off the races. Theres plenty to stay concerned about, which just means from an investor standpoint, making sure you are rebalancing regularly and understanding where you are on risk tolerances, it was less than 10 days ago we had in 1800point down day. Paul yeah, all right, carol schleiff, deputy chief Investment Officer at Abbott Downing. Blackrocks chief Investment Officer think the pandemic effect on Smaller Companies is yet to be seen. He spoke exclusively to bloomberg. We have spoken with five different governments over the course of the issues around covid. You mentioned the Federal Reserve, but for other countries we have been working with and designto help them policies related to boost their economies, to me, that is a division that we have been doing this since 1994. It is a segregated division organization, a component of our Organization Im very proud of. A good job. Do im not here to judge if we are too big to fail. We have been reviewed and reviewed and reviewed. Obviously, we are a large, important Asset Management company. None of the assets are our own assets. This is not our Balance Sheet. Unlike when people think about banks and insurance companies, it is their Balance Sheet that has people questioning it. Our clients can redeem in their. Utual funds and etfs daily position within society is very different than what a bank and Insurance Company is. Fma k we do related to we do this openly minded. When we were asked to take on these assignments, people asked what it would mean, will there be a society backlash, and i said we need to continue to do our job on behalf of the societies we work for, and we are winning this because of our expertise, and the complements we have received from our clients has been as strong as ever, so i will continue to try to position ourselves to be the best we can in helping more and more companies, more and more individuals, governments to have a better financial future, and that is what we are trying to do. 100 of our Business Model is a. Iduciary culture their Balance Sheet navigation must apply related to that fiduciary positioning. We have high standards have to pleasedunder, and im that we have been able to navigate this. 2020 was always going to be a big year because of u. S. China trade tensions, and election. Are we going to see a lot of volatility as the market works out what is important and what is not . I think its going to be very hard to cut out the noise. Dont have aill fundamental understanding. I dont know if we are going to have a severe rising infection rate for mortality rate. I hope we have antivirals quickly. I hope we have a vaccination quickly, but until we have those ues, until we are over until we have our a better understanding of the outcome of the 2020 election here and we know what is going on, we should expect a lot of volatility for the next year, but lets be clear markets have done quite well with all this uncertainty, cashheres a huge pile of sitting on the sidelines, and that money needs to be put to work. Blackrock chairman and ceo larry fink. Geraldine buckingham joins us on daybreak asia later on. Plus, dont miss our coverage of the last day of invest bloomberg summit. Hear from bridgewater. Ssociates cocio this is bloomberg. Paul singapore will hold an election on july 10 as the government seeks a new mandate with the coronavirus pandemic as the city state enters the second phase of lockdown easing following two months where schools and most workplaces were shut. Lets cross over to our chief Southeast Asian correspondent. What does this have to do with the timing of the election . Its not far away. Haslinda thats right. It is into it is in two weeks. Parliament has to be dissolved by january. Elections need to be called by eckel 2020, so the government was running out of time to hold this election. In an address to the nation yesterday, the Prime Minister said he is trying to seize this period of virus stability to hold the election. Instability as to when we will see the end of this pandemic, so he is really andg this years virus stability to hold the election. As you said earlier, we are in the second of a threephase emergence from the complete lockdown. In terms of timing, he said that we need a strong mandate right now to give a strong team the room to navigate the country in such tumultuous times. That is how he describes the challenges that singapore faces, not just from the fallout from fromirus but also geopolitics, the u. S. China tensions. Singapore, of course, a very open economy, and it will feel the fallout. Pandemic be an election issue . If so, where will the votes way . Haslinda it is expected to be a defining issue in this pandemic, how the government tackles the pandemic. Remember, singapore went from a virus hero to cautionary tale. It overlooked pretty much 300,000 Foreign Workers living in dormitories, which eventually led to one of the strictest knockdown stuns the world, but having said that, when you take a look in terms of infection, it top 40,000, but when you look at the death rate, it was less than. 5 , among the lowest in the world. When you look at economic response, singapore has been pretty steady, and implemented 4 stimulus packages, so it has reacted really quickly. Paul singapore has been governed by the same parties since independence. What sort of succession plans are in . Haslinda the mental fit to lead the country faces and a lot of challenges. Front and center, he has a lot of experience. He is the current finance minister, so theres a sense that we are in good hands. More one will have singapore in the next hour of daybreak asia. This is bloomberg. Watching daybreak australia. New coronavirus cases are surging across the u. S. Forcing local authorities to reconsider plans to reopen. Infections are soaring in texas, florida and arizona. California broke its record for new cases for a fourth day. Meetsropean Union Wednesday to discuss when to open external borders and may decide to exclude american travelers as long as the u. S. Europeans. O bar reports from north korea say kim jongun has put any potential military action against the south on hold. State news agency say he told them to suspend any moves against seoul. Tension on the peninsula remaining high. His sister has warned the norths next move would include the army. Twitter has hidden a tweet from President Trump for violating policies on their terms. The president posted a warning that there will never be a zone in washington, see adding protesters would be met with serious force. Twitter says that threat breaks its rules. The tweet is still there but it is hidden and users must click deliberately to reveal it. The movie industry is heading to new zealand as the nation presents itself as a virus free haven. Leading the way beginning shooting of the sequel to avatar with his 30 strong crew given exemption to enter a country that has been closed to foreigners for the past three months. The government okayed the move as the film will offer work to hundreds of new zealanders. Glob