Seeing whippy action. Lots of movement happening all over the place. We are going to take you through all the news with global exchange, the market moving news from all around the world. From hong kong to new york to washington, our bloomberg voices are on the ground with all of this mornings top stories. Announced newj measures to pump liquidity into the markets to ensure financial stability. Joining bs enda curran. What do we see joining me is in the current joining me is enda curran. What do we see . They bought around 100 billion worth of stock funds and came out with an emergency statement making it clear that they will do whatever it takes liquidity ande is stability in the markets. The boj actions are flecked growing concern about dollar reflect actions growing concern about dollar shortage. We have seen australia pump in a lot of money, and china centralbank top off today with the rrr rate cut. That is all about freeing up funds for banks to lend more to companies that need it most. Alix thank you very much. All of that having a big impact on the market. U. S. Futures advancing. You are having big action in the bond market in europe, as well. Joining me is annmarie hordern. Sinceie the worst day 1997, i catastrophic day for wall street. Basically, is this the bottom, or not yet . This is friday the 13th, as you mentioned. Going into the weekend, who really want to be long when there is still a lot of unknown about what governments plan on doing in the spread of this virus . Lets see what happened overnight. The msci pacific in asia ended in the red, but we are on the front foot in the stoxx 600 in europe. Italy, the ftse maybe up more upn 10 the ftse mib more than 10 . Of course, we have the s p 500 looking at a brighter start, up 4. 5 . The are seeing a quest for cash, though. A bit higher,g but yesterday we had gold falling. Everyone is liquidating. They want to put their money in the u. S. Dollar. The u. S. Dollar is king. Alix thank you very much. Now we turn to some companies affected by the virus outbreak. Looking at broadcom, pulling its annual Sales Forecast and gave gaverterm weak nearterm outlook from the virus. What does this mean for the rest of the sector . Obviously, this has hampered visibility to the point where the big annual guidance for 2020 is off the table. This is a company were most of its sales come from semiconductors, and a small portion of it is Infrastructure Software. The Infrastructure Software piece of the business is pretty stable, actually growing a little bit, but the semiconductor piece continues to be volatile. I think this is going to be par for the course for the remainder of the year, even though they are announcing substantial impact from the virus. It is going to crimp supply, and in the longerterm, greater than two months, it is going to affect demand from the china region, as well as u. S. And europe. Alix thank you very much, anon trina vossen thank you very nivasan ofd sri Bloomberg Intelligence. Here with more is alex harris. Can you walk us through what this means Going Forward . Alex this is actually the third announcement the fed has made this week to increase the amount of liquidity they are providing via these repo operations. Yesterday was by far the biggest. They are now conducting on a weekly basis a 500 billion threemonth operation and a 500 billion onemonth operation, so that by the time the cycle is over, they will be offering more than 5 trillion of liquidity. Is whether or not theres actual dealer Balance Sheet capacity to take on a lot of this funding. That is the big question mark Going Forward. Yesterday, when we did the first of the threemonth operations, i think the takedown was only about 60 of what the fed was actually offering. This is what people are going to be watching for Going Forward. At the end of the day, for the fed, it is all about perception and making sure that you are not reaching, youre not having oversubscribed operations, that it is not signaling bigger issues. Knowing that the fed is there and has this backstop will read for people that they are being proactive instead of reactive, as we have seen in the past. Alix to that point, the real issue that has come up this week has been in the credit market. Investment grade is seeing enormous outflows. Ash on thedash for c Corporate Credit lines. The fear gauge had its biggest weekly jump since 2008. How does that get affected by what the fed is doing . How to the ease the credit stress . Thats a great question, and it will remain to be seen if you can get that followthrough, if you can get that financing open to these other market per dispense. Youve got to also keep an eye on the commercial paper market because thats another big place where companies are going to go if they really are desperate to raise funds, and they could do it quickly, but it might cost them. So again, it is just going to remain to be seen exactly how we get this followthrough here. Because again, there is a big difference between trying to finance and keep the wheels turning in the treasury market and keeping the wheels turning in the credit market. Alix thank you so much for that. In washington, House Speaker nancy pelosi says shes nearing an agreement with the Trump Administration on the deal to combat the economic lows from the virus outbreak. Joining me from the white house is kevin cirilli. What do we know at this time . Says sheeaker pelosi is hopeful that she and treasury secretary Steve Mnuchin will get to a deal sometime today that would provide economic stimulus to blunt the impacts of the coronavirus. It would include two weeks of paid sick leave and also potentially look at some tax loopholes or cushions for the majority of americans. President trump, for his part, says that testing on a wide scale basis is very nearterm, and that is something that will start in the near term, although there wasnt a precise timetable waste on it. We know that some testing sites in new york have begun to open. Speaker pelosi also saying that the tests would be free in any deal that would be reached with republicans. Alix kevin cirilli, thank you very much. One other story i am following this morning, the Market Performance under various u. S. President s. The historic slump over the last few weeks has really hammered President Trumps batting average. The return on stocks since he was inaugurated has now fallen to 24 . That leaves him on course for the worst performance since george w. Bushs second term. President obamas second term, he had 53 return. The trump return was just below that when wall street hit a record high on february 19. I should point out that trumps tenure is now on par with Richard Nixons second term as well. Coming up, more on your morning of the marketsis in todays first take. This is bloomberg. Alix some breaking news for you. S p futures hitting the limit up, so they reached that 5 up band. They cant go any higher than this. They can go a bit lower. We dont have that in regular trading equities. We are about two hours and change away from the open. The other headline, italys 10 year bond erasing headlines. Interviewt from an with the bank of italy governor that the ecb can frontload bond purchases if needed. During the press conference, Christine Lagarde missed a moment when she set off the cuff we are not here to close spreads, and that injected a lot of uncertainty within the italian bond market. You saw a huge spike in btps. Now thats taking a little bit of a brake on some reassurance that maybe theres more that can be done sooner, and it can be more focused on some areas, like maybe italy. Time now for bloomberg first take. We are bringing you the news. You get betrayed and analysis of the markets. , Damian Sassower and mike mcglone, and Michael Mckee. Ok, its been a really crazy week. As you are headed into the weekend, what are you thinking . Damian you stole my thunder because ive been looking at the but the spread, that really stands up to me is chinau. S. 10 year. The market has been unusually stable and well performing throughout the midst of this crisis. If you look at chinau. S. Spreads, they are pushing up to alltime highs. To 200 point, pushed basis points. If you are looking to carry in a market with no yield, look no further. Mike i have to start with some optimism, partly because theres too much pessimism as you mentioned earlier. If it were to close today where it was yesterday, it would be due third worst week in its history. ,heres only two other examples 2008 and the depths of the recession, 1933. You were supposed be having that. Hristmas lists the fed is probably going to ease 100 within the next few days. The trend is when this all passes, we know we are going to get over it. We will go back to the deflationary trend. There was just too much optimism for normal economic growth. Michael i think at this point, what we are all looking for is some kind of visibility on where we are going. The Central Banks are acting this morning not in concert, but in correlation around the world. Youve got the norwegians come of the swedish, the japanese, the chinese. We are all going to be keeping and i on the fed. I want to keep credit flowing to companies, keep markets from seizing up. Japanese did that today. Then you address the demand shortfall. Does the fed follow today or try to get a bit more visibility . Andhey do a partial move save a little and reserve . A lot of questions about what they should do, but also when they should do it. Damian i think for me, if you just look at funding spreads in the u. S. , the worst is not behind us yet. You look alix doesnt the basis come off a bit . Damian if anything, they got even narrower. We are just looking for that to kind of bounced back in order for us to get some sense of stabilization, but the fact of the matter is the funding pressures we are seeing in the u. S. Are expanding abroad. The value of the dollar is going up. If you look at the front end of forward curves in any emerging market theyve steepened quite considerably. Michael youve got to consider the currency swap lines put in place in 2011 are going to get tapped at some point soon. Whether that savings that sends a signal of reassurance or worry to markets is hard to tell. The spread has widened after the fed announcement. It will be very interesting to of how much take up there is the 500 billion in repos. Thats all the money in the world. How much of that is the u. S. Going to want today . Yields think 30 year picking up might be a bit early, but thats what we want to see. They are priced for 100 next week. Happening is the big picture. We needed a shakeup. It was way overdue for a reality. Up a littleill pick more active investing, which is long overdue. You cant use s p 500 as a piggy bank. Damian the fact that we still [laughter] damian when equities and bonds both selloff to the extent we saw yesterday, the fed has got to be watching. Alix but let me ask, could we also attribute some of the selling in the back into what we saw yesterday in gold . Michael the problem is there havent been buyers. Youre trying to sell stuff people want to buy, and it is not happening. I think a lot of it has to do not necessarily with the plumbing not working, but lack of confidence that it will work. If theres a lot of take up, that may calm some fears. Havingow, we are not Major Economic problems. Central banks are looking for some money to make me feel better. Damian the fact that theres no bid in the recent spreads, ig spreads of 100 basis points since midfebruary, high yield up 400 basis points since midfebruary, these are massive moves. Mike but the quote i heard this morning from my colleague in london is i miss brexit. Alix we said the exact same thing [laughter] mike this is a classic, how are we going to avoid global recession . Its the money plunge. We are so overdue. So how do we go forward from here . Michael you had a lot of banks now lowering their forecast. Jp morgan went to contraction, but everybody is also protecting a vshaped recovery that, once its burned itself out, we go back to recovery. If thats the case, why would you cut to zero . Especially the fed because they will not be able to raise rates this year because its an election year. Why do you do that immediately if you think things are going to get better . Saying iferyone is this extends one quarter, two quarters, three quarters recession, take a look at bbbs in the u. S. Because they will come under significant pressure. That thats my question pairs with what the fed did yesterday. The goal is to deal with that, so the companies that are at risk for defaulting, to help them get access to cash. So how much did what the fed do yesterday help . A lot of economists were writing that this basically sets you up for qe4. In that case, you have to buy corporates . Michael well, they cant buy corporates. You can do qe if you need to come of it it is really not going to have an effect on Interest Rates. They can take Interest Rates to zero anyway. The question is, how did they keep them there, and what are the reassurances they give . Point, if they think the economy is going to get better, you dont want to use everything at once. Thats kind of the problem. We dont know what is going to happen again with the money markets today, but the repo market is about 1. 3 trillion. Over two days, the fed is offering 1. 5 trillion in repos. You look at the overnight repo rate, it collapsed yesterday, so we should see some improvement. If we dont, i guess we get worried. Mike i think what the fed to do is focus on what you mentioned. Lets try to make this a problem we have to worry about raising rates because that would be a wonderful thing to think about. I hope we see the bond market first. Alix guys, thanks so much. Really great conversation. Just want to point out btps are flying. Yields fall as a huge amount of money is coming into the bdp market. It appears to be the bank of italy governor talking to bloomberg about how they can help everybody, they could focus qe uncertain countries, and they could always frontload some purchases to relieve the tension felt yesterday with a new when Christine Lagarde said she wasnt there to control spreads, btpbundally made spreads wide now. A reminder, any charts we use throughout the show, gtv on your terminal. Browse them, check them out. This is bloomberg. Viviana you are watching bloomberg daybreak. One more indication of the stress rippling through construction and mining, caterpillar reporting its biggest decline in global Machine Sales since the end of 2016. The ceo saying so far, the coronavirus hasnt caused any major supply snags. Now to apple. It reopened all of its 42 stores in china. Last month, it closed them because of the coronavirus outbreak. The closures were one of the two primary reasons apple cited when it pulled its revenue outlook for the first quarter. Lawyers asking a judge if it can wreak and center the pentagon decision in a controversial 10 billion cloud contract. Microsoft was awarded the deal, but amazon sued, claiming political interference by President Trump. The judge in the case says pentagon may have misjudged microsofts pricing proposals. That is your Bloomberg Business flash. Alix thanks so much. One other story is that pressure on the credit markets. Theyve seen their worst week since the Global Financial crisis over concerns over corporate defaults. Many companies are stumbling under debt loads that are already pretty unmanageable, even before the crisis. We want to take a look at spreads of highgrade, as well as high yield. When i say blowing out, i mean blowing out. The blue line is a highyield average spread, now at 726 basis points over treasuries. The white line is average corporate for investment grade. The issue is the bbbs. If they wind up being downgraded, the shakeup that will cause in the market. A lot of it is the energy issue come over the Capital Market is completely closed to them. It is not just energy. There are also other parts of the highyield market that come under pressure. If the bbbs get downgraded to junk, a lot of others have to rebalance, which could lead to a higher and wider spread. Coming up, we talked to savita with bank of america. This is bloomberg. Alix this is bloomberg daybreak. Im alix steel. Yesterday you saw equities get hit with the worst crash in the u. S. Since 1987. Now s p futures limit up right now, 5 . Cant go higher than that. Could go lower. In europe, we are still seeing a goodsized rally. Italian stocks up almost 14 . You did have a short limit on certain stocks there, but the real story comes within btps. Btps are flying, yield down by about eight basis points. We had an interview with the bank of italy governor saying that they could buy more, could target specific countries, all that they could wind up helping italy and the bond market today. These hate heaven bid rotated out of the currency market the safe haven bid rotated out of the currency market. Elevated, 65. G joining me on the phone is savita subramanian, bank of america head of u. S. Equity and quantitative strategy. I started with the vix because with the vix at 65, how do you buy this market . Savita its a great question. We have seen this dislocation with spreads and rates in the market on a daily basis. I do think that now is maybe not the time to add exposure to the think0, but i definitely now is not the time to sell the market. One thing we would caution investors on is the best days for the s p typically follow the worst days. Market timing is really hard. I just wanted to share with you a statistic. If you missed the 10 best days every decade going back to the 1930s, your returns would have of almostnstead 15,000 . Alix whoa. Savita this is a huge difference, so trying to time the market after big downdraft is a recipe for underperforming. Alix is the goal now to not lose any more, or is the goal to get alpha . Savita i think the goal is both. Thats a great point. Loss aversion is clearly the name of the game, but i think the other goal is to not sell and lock in losses, if that makes sense. If you look at the length of time that it takes to recover a bear market, it is about a year on average. So if you just remain invested for about a year, you typically more than make up for the losses of a bear market. I think the other thing i would recommend to clients and that we have been really pounding the table on his stockpicking. The reason i say this, if you look at the selloff over the last few weeks, it has been one of the most indiscriminate we have seen. Weve got all sorts of quantitative tools. We measure this by the percentage of idiosyncratic risk a company exhibits. Companies are not acting like stocks. They are just all going down together in a very correlated fashion, more correlated then we have seen in prior selloffs. I think what that means is that the babies are getting thrown out with the bathwater, and it is time to start looking for penalizedt have been in this selloff, but actually arent necessarily linked to any of the negatives. There are a lot of negatives. The travel ban is going to cut into Business Activity and airlines and hotels. Theres a massive rout in oil prices. On the other hand, there are a lot of companies lower today that really are much more immune to these areas of stress. I think this is the time to think about Stock Selection as a way to generate alpha because you are right, we do want to generate alpha. This may be the best time to look for some of these beatendown names. Questionch raises a that is twopronged. , themeans the winners , the winners in growth could still be sustainable. On the flipside, you still have emotions in the market. How do you handle that and not get sucked into a value trap . Savita i think theres a way to identify value traps. One of the things we look for our value traps, and especially dividend traps. These are companies that look cheap because prices are falling faster than analysts are cutting estimates or the company is cutting their dividend. The things to look for for real value versus a trap, what we like to see in an an expensive company with high dividend is low earnings leverage low because if a company has high leverage that is about to be more do, that is complete at risk to cut earnings or having a major earnings decline. Those two factors i think are important to Pay Attention to right now. I think also come of the payout ratio of the dividend is important. We are in an environment where the dividend yield of the s p is almost three times that of the 10 year treasury. Post of the dividends in the s p 500 are sustainable. You just need to look for the countries in sectors where that payout ratio is low enough that they can sustain it in a downturn. We are seeing a lot of opportunities here in health, even banks. Banks have already priced in a recession. They pay a well guarded dividend. They are selling off in spades because of the idea that we are entering global recession. I think that is one sector that could be more defensive than it has been in prior cycles. Alix really good to catch up with you. Great perspective after a really crazy week. Savita subramanian of bank of america securities. President trumps 30 day ban on flights from the europe to the from europe to the u. S. Causing more blowback. Joining me on the phone is helane becker, cowen Senior Research director. Is this like 2001 for the airlines . Helane yes, in a word. Alix is it worse . Helane it has the potential to be. I am trying not to panic for clients. It is first and foremost. We are doing a lot of work that shows this is the same type of after 9 11 happened, were we dont know what happened, you foru. S. Airspace shut down days, and really no travel until the holidays. There was a 38 decline in traffic in september, and that october was down 21 , november down 18 , december down 14 . That peoplee subtly, butome back then you had a consolidation phase, a bankruptcy phase. You had a lot of stuff happen to the industry after 9 11 that may not happen this time. I am certainly concerned about some euro area airlines. American airlines, it could. Epend so these are the so give us these are the if you once, these are the ones in trouble. Helane we think southwest can handle it. A lot of people have pulled down spirit airlines, but they have cash and uncovered assets. We think they can handle it. Allegiant has some issues. Theyve got about 15 billion in uncovered assets they can tap, including a credit line. By the way, we are seeing all of their airlines top the credit lines. You race cannibal this week united raised capital this week, delta last week. Were seeing everyone talking about getting more money in the door. We expect that with the situation with no travel to the front of the shenzhen countries, be anect that there will travel cut to sir to travel. Alix breaking news from the german finance minister, speaking at a press conference from berlin. He said that germany will spend billions to cushion the economy and will put no limit on a Credit Program to help companies. No limit on Credit Programs, will spend billions. That is a safety net for virus hit companies, and use every Means Nothing scary every means necessary to weather the crisis. Hes giving a press conference in berlin and. They will spend billions to cushion the economy as it gets very serious. You can see the dax now the highs of the session. You are still seeing a pretty steep selloff across the bond market. Bund yields down by 14, 15 basis points on the 10 year. You have a lot of money coming in. Lows down on the 10 year. The Central Bank Governor of italy telling bloomberg the ecb can still act in can still target certain countries, which gave a lot of relief to investors in the btp market. We will follow these headlines in the press conference from all shoals from come out. As they Viviana Hurtado is here with first word news. Viviana u. S. House Speaker Nancy Pelosi says shes near an agreement with the Trump Administration on a coronavirus bill. The measure would mitigate some of the economic blows from the viral out right. Democrats are patching for paid sick leave and more aid for those who lose their job. Policy ms. Pelosi looks to have a deal. Yesterday, the fed failed to halt the stock market rout. That has investors pushing the central bank to cut rates to zero next week or sooner. We end with the u. S. Giving roche emergency approval for a highly automated coronavirus test. Testing is crucial to stem the spread of the disease. At allows Health Care Workers to identify the affected and quarantine them. 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. Im Viviana Hurtado. This is bloomberg. Alix thanks so much. Who of Global Security firms are on the phone i wrapping are on the phone addressing the stratford cash. Under terminal, go to tv. This is bloomberg. Viviana this is bloomberg daybreak. Coming up in the next hour, jeff currie, Goldman Sachs global head of commodities research. Alix breaking out of germany, defined as minister says germany will spend billions to cushion the economy, and there is no limit to help companies for the Credit Program. Also saying that germanys state bank will rise to 500 billion euros. Lots of backstops now from germany. We will update you on those headlines as they cross. We turn now to wall street beat to cover three things wall street is buzzing about. First up, bob diamond says a rate cut wasnt needed. He says the fed rate cut was a bullet we didnt need. And investment banks are pitching in a frenzy to drum up focus into lynn to need. In the world of entertainment goes dark as the coronavirus spreads. Joining me now, bloombergs westin. Asak and david david, you were lucky enough to have bob diamond on your wall program. Ek we had bob diamond david we did, we had bob diamond on, the former head, and we had rick rieder from blackrock. The discussion was what should be done about this crisis. One of the things bob diamond did say was that rate cut we had 50 basis points just didnt do any good. My opinion, just one of many, is we used a bullet we didnt need to do with a rate cut here recently. I dont think governor powell wants to go to negative Interest Rates. I dont think the u. K. Wants to go to negative Interest Rates, and we used a bullet. The is really impressive is bazooka they use today in the repo markets. They came in with a huge infusion of liquidity, and both rick and bob were very impressed with that. Sonali it is so interesting because it is big a league it is basically recognition that the market is not behaving like it should. These issues go way beyond the fed being able to fix the economy. The folks in bob diamonds camp really one fiscal stimulus. So whatever the reserve can do now is going to have longlasting impact from the Banking Industry and all the savers, the pensions that have greater liabilities. Sayingboth rick and bob that we need fiscal stimulus, but we really need big fiscal stimulus. Rick rieder said the system was really gummed up. Alix really . David he said he had never seen that. He thought this would definitely help that because theres no liquidity. Because everyone was going to cash in getting out. Sonali the wall street types one fiscal stimulus, but will the rest of america be seeing this has one big bailout that willbe very looked down upon . David i think pretty quickly, a lot of americans will be say we are really hurting out here, we dont have a deal now. That is not going to be big enough, i can tell you right now. Alix it will be very interesting all throughout the weekend. Wall street week begins at 6 00 tonight. The Big Companies like blackstone are already asking their companies to tap credit lines. Hurt the banks in the long term, but then you have the banks looking to the shadow lenders and saying we need you to step up for all of these countries on the line for financing, so what are some of these Companies Looking for money . Royal caribbean for one. We have seen Massive Companies already look to the credit market to tap the lines are really outstanding. Alix you know this world david you know this world so well, at what point does liquidity turn to solvency . Sonali thats the absolute question now. Ive mentioned this before in talked to bankers worried about the entire. Conomies of bankers i just wonder how that filters through. I dont feel like banks are is exposed in the same way they were a few years ago. Sonali they are not come about that doesnt mean they will not take losses. This is not going to be a strain on their capital and liquidity like in 2008, but it will be called upon to take on these. Alix lets talk about where they might feel extra pressure, and that is the shutdown of all entertainment. In particular, we are talking a lot about the sports events. How does a network deal with Something Like that . David i heard duke was pulling out of march madness yesterday. My first reaction was, what does that do to cbs . It is a big Cash Generator for their entire network. That is going to ripple through. In 1991, to say, back the first thing any company does immediatek, so company could cut. Quick. Could cut quick. Sonali but they are also ramping up their and streaming content. A large part of that is sports. David thats the big battle between live sports and scripted, and live sports is going to be off great. That should help scripted people. But you are right, its going to hurt. Alix you have networks not getting ad money. How quickly does that filters are the organization . David surprisingly quickly. A lot of these Media Companies have fulltime equivalents. You start cutting back on your freelancers quick. David two pair that altogether sonali two pair that altogether, a lot of people selling services outside, people going to these concerts, all of the vendors, they are going to be heard immediately that all of these vents are shut down. Alix but does the government help . Help . we hear germany we hear germany saying they will put all their weapons on the table for this. David weve been waiting for that for some time, but i think it will be a long time before the government bailed out Media Companies. They are way down the list. [laughter] alix and energy companies, believe me. Thanks very much. Really appreciate it. In todays off the beaten street, we are taking the exams can be unnerving at the best of times, but coronavirus makes it a complete nightmare. Cancel may be forced or , andrced to cancel students might have to wait another year. Cfa says it is monitoring the situation closely. That would be so stressful. If you are jumping in here car, tune into bloomberg 119o on serious xm channel on sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix time for traders take. Joining me is Damian Sassower of Bloomberg Intelligence. Really, china safe haven . Thatn obviously, a lot of is the pboc managing it. But what we are seeing here is 3, 5, and tenure spreads and tenure spreads. What you notice is the 10 year. In a world where rates are going to zero and you cant get any yield whatsoever, no kerry left, eft, with no carry l the one remaining stable, that has been a pretty good place to hide. All of the dollar bonds prior to the last day and a half had actually been quite resilient. It is interesting the way the markets are behaving towards china. Alix i was going to ask you this before, is this a function of a really actually is a safe haven. Is it a you pickup play . Maybe they have actually recovered. People are going back to work, we are moving on. The report are economists just put out says that he is looking for 40 to 45 , and i think markets are pricing that in. Alix i love when you end like that. Damian sassower of Bloomberg Intelligence, thank you so much. Thats get to a nice market check. We have seen some big moves. S p futures moving up. They cant go any higher than 5 , but we are seeing a monster rally in europe. You have a stallion stocks you have italian stocks up to a record here, the most since 2008. Its the to why, biggest move we have seen in the btp market. The finance minister says germany will spend billions to cushion the economy, and they are putting all weapons on the table to help sentiment in europe. This is bloomberg. W . W . Uhiono welcome to bloomberg daybreak on this friday, march 13. Im alix steel. Lets take it right from the top. Frommestic travel to and manila shall be suspended. The philippines locks down 12 Million People for one month to look to lockdown the virus. Japan policymakers inject funds into the market. The boj actions reflect their growing concern about dollar shortage and illiquidity in the financial system. That is why we saw other central bank around the region, including australia, pump a lot of money in. Alix meanwhile, apple is able to open its stores in china is the number of cases falls. In europe, activity continues to slow to a crawl, and frank president macron calls this the virus of the century french princem president macron cause the c virus of the century. The system is not really geared to what we need right now , what you are asking for. That is a failing. City in new york city, the that never sleeps also crawls to a standstill. In light of all this changing realities, it is time to declare a state of emergency. Alix all of this leading to massive volatility in the market and a credit crunch for companies trying to survive a pandemic. A catastrophic day for wall street. Basically, the question is is this the bottom, or not yet . Alix the fed commits to a version of whatever it takes, promising to inject 500 billion into credit markets next month. To increase the amount of liquidity, they are providing these ricoh operations. Yesterday was by far the biggest. They are now conducting on a weekly basis a 500 billion threemonth operation and onemonth operation. Alix this comes as the country waits for fiscal measures from the government. House Speaker Nancy Pelosi continues to negotiate with treasury secretary steven mnuchin. Pelosi says there should be an announcement friday. Continued breaking news. The latest is the german finance minister says they could implement Stimulus Programs if that they would look at timely and targeted measures to support the economy. They will spend billions to cushion the economy. This comes after we learned from the bank of italy governor targeted qe buying. Yields are down double basis points. Lets get a check in on the markets. S p futures limit up today cant go today. Cant go over 5 , can go lower. The say haven been getting drowned out. The same thing happening in the 10 year. The selling continues. If we touched 1 , this week would just be insane. Joining me in new york, Brooke Sutherland of bloomberg opinion, Michael Mckee come up Bloomberg Economics and policy correspondent, and droning us from florida, Kathryn Rooney head of research and strategy. This point, Christine Lagarde challenged euro zone countries to step up on the fiscal side, and germany is saying challenge accepted, which is a surprise to a lot of people because they were seen as the holdouts, the ones who wanted to hold the line. These initial proposals are designed to keep people working. Include deferral of tax payments and extension of loans to people on the payroll. The lower house of parliament has passed a law that is going to go through later to provide Financial Support to companies who might be in danger of losing employees. Saying no Healthy Company should go bankrupt because of corona, and no jobs should be lost. Thats the bottom line from germany. The other line is a love schulz cholz, the finance ministers, saying there could be a buying program. No one knows how much damage is going to be done to the economy, so no one knows how much stimulus is going to be needed on the other side. You may see people a little more reluctant at first, but in the meantime, they are going to put in place whatever they can to try to keep people from losing their jobs, and credit crunch is taking companies down. Brooke this is really what markets have been waiting for come of this kind of tone. Is it going to be enough . Are we going to start to see things turnaround . I agree, but what is going to get us to stability is unique. Maximum contagion we are living in right now, if it lasts beyond another month or into the summer, we are talking a whole new ballgame. One of the things i have been thinking about, i would love to get mikes take on this, is what the president of the Federal Reserve bank of boston mentioned in the past week, which really hasnt gain traction, his idea of at least giving some monetary surprise. Monetary policy will not fix the problem, but if you were to shock the markets with congressional amid mints to the Federal Reserve act to allow the Federal Reserve to buy a variety of assets, that i think would be something that would give a jolt to the markets to get us into a , stability orend higher. I would lead to get your thoughts on that as well. Michael i think it would take a while to get done, first of all, because congress doesnt move quickly. The fed doesnt want to open the Federal Reserve act because then any kind of proposal, there are a lot of people in the Republican Party who want to audit the fed and things like that. Then it all comes on the table, so it make so it may be harder to get through than you think. But the shock and awe may be if they decide to do an emergency cut ahead of wednesday. Look at with the fed did yesterday with the repo operations. This morning, they just finished the first operation. Up by17 billion was taken dealers. It looks like a lot of what this. S about is confidence the fed and other Central Banks telling markets where there, and making people feel a little better. Brooke what do you expect next week or even earlier . Kathryn i think the market doesnt care anymore. I think 100 basis points, taking us to zero, is already completely discounted. They are going to do it, and the yawn oris going to move lower. Increasing asset purchases isnt the resolution to the problem. We are going to get 100 basis points. Thats my view. If the fed doesnt deliver 100 basis points, then you are going to get a market freak out. Youre going to get a temper tantrum, as we saw back in the taper tantrum. Thats what i am expecting. You can make money in these levels of volatility. Options are particularly interesting to us at current levels. I will add one more thing. I maintain my conviction that this period of time will prove to have been a time to a cumulate assets. I think we need to be looking very clearly for opportunities over the month. Alix i want to break down some more headlines for you. The german finance minister now saying it is possible germany will be to take on added debt, saying that they could implement a Stimulus Program as needed with these timely and targeted measures, and could take stake incorporations. They also meant to give other eu countries budget plucks ability, too budget flexibility, too. This is the beginning of mmt . Seriously, is this basically what we are seeing . Michael you have to disconnect this from mmt because mmt postulates that any country that can print its own currency neednt worry about debt, and germany doesnt print its own currency. At this point, it looks like to suspend, and the European Commission will not link that at this point. It is unlikely it is basically telling people if we are going to let that go, you should feel free to as well. Brooke do you think the u. S. Is going to take that message, the . Are we going to see this kind of stimulus in the u. S. . Are we going to see the treasury step up in this way . Michael hard to say at this point. At looks like but they are going to do is put in place, at least the house bill that is being negotiated, designed to keep people at work, provide loan guarantees and perhaps tax credits to companies that might get in trouble in order to keep people on the payroll. The idea of stimulus, additional spending, is being discussed, but not really part of this legislation. They are going to wait. The problem in the United States is we are just so divided that it is going to be harder to get something through congress than in other places. Alix final word on this to you, you mentioned you want to be taking on risk. Where . Kathryn i think what were talkingke about could bring a leg lower. If we were to get the house ,roposal, trump rejecting it the president coming up with a payroll tax cut that the democrats reject, this is not preston. If we get this political brinksmanship, i think we will see leg lower. When we do, am going to be recommending to Equity Investors to look at brought index. You see a lot of names, very strong names and sectors, the have also declined with ones that really should, which are airlines, transportation, consumption. But i like the s p 500. Multiples are hard to determine at current levels because we dont know the underlying. We dont know what earnings are going to be this year. But i think that just s p, or you can play the spread between s p and europe, are trades i will be looking to recommend over the course of the next month. Alix thank you very much. Coming up, youve got oil price plunging, up about 5 today, but looking at the largest Weekly Collapse since 2008. Jeff currie of Goldman Sachs will be joining us. A live shot here of the eus ursula von der leyen, saying they stand ready to do more if the situation evolves. Germany also saying there ready for stimulus if needed and will take on more debt if needed. This is bloomberg. Our projection is that we will see brent in the 20s a bit, and pitted julie in the teens. And potentially in the teens. It is going to be bad. Joining me now is jeff currie, Goldman Sachs head of commodities research. Goldman sees record crude surplus by april. Bullticks Kathryn Rooney vera with us as well. Crude in the teens, can that really happen . Jeff crude somewhere in the world is likely to hit those numbers. It is critical to make the point that the market is going to be indiscriminate who gets hit. To understand whether this dynamic is likely to entail, we expect a crude build of 6 Million Barrels per day in april. We have never seen a build of this magnitude or this velocity, and as it hits the system, the ,uestion will be the logistics pipelines, storage facilities. If it hits a bottleneck somewhere along the way, where it hits the bottleneck is where you see the real downside risk. In2016, will prices minnesota actually went negative. Why . Because the producer had to pay somebody to get rid of it. You couldnt push another barrel into the system. When francisco makes that point about prices dipping down in the teens, what hes indicating is when the system blows out, you breach capacity to be able to deliver or put into a pipeline or a ship, the downside really begins to open up. But i want to emphasize, as soon as the system starts flowing again, the prices spike backup. The key point is that volatility might lead to the downside, but it is likely to be very high. Alix it seems like you are saying the faster we fill up, the faster the pressure on prices, but in the faster we wind up picking back up finding some stability. Jeff right. Think about it this way. Once you have nowhere to put that barrel of crude, and you have supply above demand, immediately, supply has to be forced down in line with demand because theres nowhere to put it. To get that immediate correction, you typically see prices collapsed to the downside. Once supply and demand are realigned, they typically pop back up again. Historically, when you breach storage or delivery capacity, you see record levels of volatility. Reaching Storage Capacity this time around is going to be difficult because weve built so much of it in the last decade. And deliveryistics capacity is where the issue is likely to be. Brooke given everything happening with the coronavirus, is there a risk on the supply side for oil . If this virus doesnt spread further in the middle east, do you see disruptions on that front . Jeffrey theres economically driven disruptions, and then theres the disruptions driven more by physical problems like people not showing up to work, and things of that nature. Ivesis always a risk, but we look at the economic risks, the middle east are the lowcost players. They are the ones ramping up. The rise in production is far above what our expectations were even a week ago. But in terms of thinking about the economic disruptions, what is amazing about this, it was a violent and swift rebalancing. In the u. S. , we are only three and a half days into this. We have seen more than 15 companies and outs reductions in capex of greater than 30 . That is a Significant Impact we have already seen. When i think about the implications and disruptions, thats what we are seeing. The other point i want to emphasize, this price war, i like to view it as a second round effect of the virus. It is not two separate and distinct events. Alix in that scenario, the rhetoric is companies that have slashed capex will see a lot of bankruptcies that cant sustain this. If prices recover fast enough, does it push off these bankruptcies we are thinking about and the defaults we are thinking about . Jeffrey absolutely not. The whole point of this is to finally get to the point of restructuring this industry. Back in 2015, our lower for longer thesis was predicated on the idea that prices stay low enough long enough to get capital out of this market so that they dont come in and save the day and restructure the industry. What happened . You had chinese stimulus, opec production cuts, u. S. Fiscal policy all delayed the inevitable. We are finally at the point where you begin to see the ,mpetus on restructuring consolidation, rationalization to create a much healthier and more efficient industry on the backside. If you look at investors, theyve had enough of this industry. They are not going to be let out. Ultimately, we are going to end up with a much healthier industry. The other point i want to emphasize, when you look at the motivation of both saudi arabia and russia, i dont like to use a pricerice w war. It is a market share strategy. Their goal is to regain what theyve lost. Alix nordic Central Banks are nordicg the Central Banks are now joining the wave of emergency fiscal stimulus. Theing us on the phone is notice bank governor. Is cutting rates the only tool you are willing to employ . Well, like many other countries these days, norway as a country is in a severe situation due to the outbreak of , and due torus these restrictions that have been imposed by the government, the impacts on the economy are severe. So we are entering a downturn now. We are seeing clear signs of that. Theres also volatility in the market that we want to counteract. We have introduced today a package of measures. It is most important that we cut our policy rate 50 basis points, and we have also provided abundant liquidity to banks through our operations. Stress that weo can prevent the downturn we cant prevent the downturn. It is too severe, and the metrics are two special, but we can contribute so that it a little milder. Brooke we are showing right now on our screen a chart of this eurokrone. S that give you oystein what was the question . Brooke given the weakness in the currency, does that give you any pause as you head into another round of monetary easing . Oystein the present level of one,currency, the weak kr what we have experienced as an economy on top of the problems caused by the coronavirus and the measures taken is that we have experienced a market fall in the oil price. 2014. That also in kroneou point to the weak in the currency, that is a very compared totuation the situation in 2014, when the krone was much stronger. The krone weakened, and it was part of the policy that we wanted to underpin a weaker krone. Now the krone is sufficiently that currency channel is not functioning as the same way in 2014 functioning in the same way as 2014. So that also is a bit different these days. Alix talking about oil, your biggest bank has a huge amount of loans to the offshore industry. It is getting hammered with crude prices also. Do you have to provide specific loans for Certain Industries or companies that are hit by the virus, and then also oil . Oystein as a central bank, we the measuresoduced that have been launched by other Central Banks in providing longterm directed loans via banks to specific enterprises. Our situation is different. Significant in Monetary Policy, and so far, the economic measures that we know from other Central Banks have not been on our table. But we are aware of the these banks have due to the exposure to the service industries. Believe onn what we , there areprices specific challenges in that area also that come on top of the challenges that we have as a nation due to the coronavirus impacts. Alix we do have some breaking headlines here. Commissioner saying that the eu is ready to trigger a crisis because that would allow fiscal crisis clause that would trigger fiscal stimulus if it is needed. So those countries cannot apply fiscal stimulus and not have to adhere to any sort of debt ceiling that the otherwise would have. He also says banks must continue giving liquidity to the economy. So that headline yet again, basically giving the green light to European Countries to go ahead and spend to help their economies, to trigger the crisis clause to allow fiscal stimulus. What do you make of that headline . I dont really recommend measures taken i dont really comment on measures taken by other monetary authorities. Our situation is different. On Monetary Policy, we do provide liquidity to banks. That is the measure that we have introduced today. Loans to banks. But they are not targeted in the same manner as we have seen, say, in the ecb or the bank of england. , again,ds fiscal policy i thing it is correct to say that our situation as a nation is different. We had significant room and fiscal policy as well. I dont provide any advice or comment on the policy mix, but i know that just an hour ago, or minister of finance had a press conference, and some new measures in the area of fiscal policy were presented. Was asking you about oil earlier. What about airlines . Norwegian hairline Norwegian Airlines was met with really negative headlines. You need to provide some sort of backstop to the travel industry . Transportell, the industry in general, and airlines in particular, are heavily hit by the actual problems area thats obvious. , they have much stronger problems these days due to the challenges. But i am not in a situation to comment on any measures that should be taken in that area. Alix thank you for joining us. It was really rate to get your perspective on this difficult time. Olsen, thank you very much. Catherine rivera of bulltick Kathryn Rooney vera of bulltick sticking with us. When you hear Central Banks saying we are here, we are they are, doing stuff, what is your take . But it it is necessary, is not going to change the dynamic of sentiment at home. If we have a payroll tax cut, for example, or lending rates at zero, is that going to make us go out to a restaurant or to the ,ovie theater, or to even work if we fear contracting a virus and bringing it home to our children or parents . I really think these are bandaids and bridges, but they are not resolutions. Resolution has to come from the health sector, science, the virus debilitating by the summer months. That is where i think the crux of the issue is. Brooke was asking about airlines. Could get some form of bailout. Even heard over the course of last night, European Airlines basically saying we need some help. That could come in subsidized loans or something similar to what President Trump announced in his infamous speech from the oval office for smes. So i do think airlines are going to need a bailout. It is likely going to come in that sector rather than the cruise sector record sector because it is more of a National Security issue. Interms of Major Airlines the u. S. , you come into antitrust issues. I think that could be in the offing, and that would be positive for Market Sentiment at least. Brooke when you talk about this fear factor, there was a fascinating story in the New York Times about the chinese been concerned about whether they were going to get paid. If you look at the u. S. , what does the recovery like . Kathryn kathryn it could be preshaped if the duration of the panic is a few months. Could lastshot, it within a sixmonth timeframe. Or getsacerbates protracted, we are talking about recession. Growth will be negative. Beyond that, i think the market is pricing in a u. S. Recession for sure. You could get delayed demand in vshaped recovery. One thing i will add is the highyield index. We have 1 4 of the index under severe pressure. High yields have flown out. I think that is a good indicator of where we stand with panic or anticipation of that panic. When we get defaults, that is when i think you will see value in high heels. High yields. Scarlet lets talk about where the markets are now. The headlines are coming fast and fear you. The e. U. Says they are ready to suspend fiscal rules if needed, basically giving the green light for governments to support their economies. The finance minister in germany say they will put all the weapons around the table when it comes to fighting the virus and could look at stimulus if needed and could even buy stakes in companies if needed. They do not want good Companies Going under. Italian stocks up 18 . European stocks, biggest jump since 2008. Classes, something similar playing out. A lot of buying happening in italy. It seems the e. C. B. Is trying to walk back the comments from yesterday. Huge move in yields. We are reversing that now. In germany, yields up 17 basis points. They said we could issue more debt to fund stimulus. 57 basis points on the 10 year. All of that wrapping into the market where you see mondays having a difficult week see commodities having a difficult week. Jeff, when you get headlines like stimulus, do you buy gold here . Bef yes, but i want to cautious about it. Our target is still 18 an ounce. What is going on in russia is having an impact on gold. Emerging market Central Banks will diversify out of dollars. Russia is one of the biggest drivers of that dynamic. Current in the environment, they are likely to sell 50 tons of gold because they need to quickly given the price war likely going on. 50 tons of selling by russia is probably worth 50 on the gold price which means would probably priced it in when we got down to 1630. We would be a little cautious because emerging markets will need liquidity. Selling gold is one way they will get that liquidity. Brooke where do you think the u. S. Rig count ends up at the end of the year . Seeing a drop of 30 is almost baked into the numbers. The key is how quickly supply will drop given the decline rates we see in the u. S. Shale production. We think it doesnt happen for another six months or so which means the current production is likely with us for a while. Scarlet credit markets alix for more of a perspective we are joined by the Bloomberg Intelligence director of Credit Research great walk us through the energy part of the highyield market and the other stresses we are seeing. If you are looking at energy, i guess the big thing is we never recovered from the 201516 cycle where a lot of Companies Got refinanced when oil dropped inside of 30 a barrel. We had a lot of people who to addressr were able to it. Natural gas prices lingered below 2 for quite some time. Issuersacted bigger like chesapeake, etc. A lot of guys are at the end of the taile. I would not call it idiosyncratic as much as systemic. Of not having a lot of maturities in this phase. We do have funding issues. You have all those borrowing rates redeterminations coming as you have names coming up shortage so that will be an issue. Doubled or more than doubled spreads yeartodate so i think there is a lot of opportunity out there now. Retail is another space where we dont know how quickly that will come back. It is just a function of how much the government is going to like what you are seeing in italy or germany. Brooke i was amazed looking at the credit default swaps on boeing. They just shot through the roof. Companies like that, do we need to worry about them with idiosyncratic challenges being compounded or do they make it out of it . They did the smart thing in terms of securing nearterm liquidity. Of 2001ry reminiscent in a lot of ways where we have Companies Looking to drawdown liquidity and you have Big Companies price for the. I do not personally worry about them. G. E. A year and a half ago. People got panicked you would go from singlea to default in a short time. Very infrequently happens. After theychallenges had issues they were trying to deal with in terms of the 737. There are a lot of other businesses in their conglomerate that will keep them afloat for some time. With the drawdown of the revolver, they will be secure for a good while yo. It is the bigger behavior i worry about in the credit markets. You could get a liquidity freeze because big markets dried up. Highyield is selectively issued. We have done so much refinancing. There is not a lot of maturity issues. It is more of a profitability thing. There are a lot more companies where you are dependent on rolling your current liquidity into the future. , you justryn mentioned highyield. Where are the opportunities . Where can you take on risk . Kathryn the highyield index has blown out. Vulnerables highly which means from Energy Sectors we will see nonconventional funding issues the previous person m mentioned. Default has not been fully priced. In addition, you expect bond etfs to have to sell. There will be additional downside in that space. At some point, there will be value. I think that some point is postdefault and after etfs have to sell. Highyield is a similar asset in terms of movement as u. S. Equities. Both ande a blowout in byect some recovery, as i do year end, you look for value in both sectors. Alix that leads us full circle back to energy. Jeff, we know we will see a decline in u. S. Production and a pickup in decline rates. Will there be more stresstargeted him and day m a . Jeff i think that is a point being overlooked. When you look at the top five u. S. Energy companies by market cap, they only produce 20 of u. S. Shale. The other 80 is produced by the bottom 50 companies in terms of market cap. A lot of highyield names. They do not do it very economically. Issue is, is this the key event that will kickoff consolidation . If consolidation ends up being the answer and a lot of assets get bought out, the debt associated will be paid out as well. That is the tugofwar credit markets are facing with the fault on one side and consolidation on the other. The industry is in bad shape. It is unhealthy. We have been arguing for 2020 and wen for think this event starts to push it that direction. Alix thank you. Really good conversation on the intricacies. We did want to give you an update on what is making headlines outside the business world. We begin on capitol hill where Speaker Nancy Pelosi says she is near an agreement with the Trump Administration on coronavirus bill. The measure would mitigate some of the follows from the outbreak. Democrats are pushing for more sick leave and aid to those who lose their jobs. Investors are looking to the Federal Reserve to be the hero in the coronavirus outbreak with 1000 less 1ing billion. The end with the u. S. Giving. Oche emergency approval the swiss drugmaker saying it speeds up the ability to test nations by a factor of 10. Testing is crucial to stem the spread of the disease. Global news 24 hours a day on air and it quicktake by bloomberg. I am Viviana Hurtado. This is bloomberg. Alix thanks so much. With the, telemedicine doctor on demand. For any charts you see on the show, go to gt on your terminal. This is bloomberg. Today, the aflcio president. We begin with ford. The company may be forced to cut its dividend to conserve cash. That is the warning from rbc Capital Markets. They say the coronavirus pandemic is threatening car sales around the world. The 2. 4 billion cost dividend will be too much of a burden. Spending starbucks is 130 million on his first coffee roasting facility in the country. In february, starbucks cu shutting down stores because of the viral outbreak. Almost all are open. Time for bottom line when we look at three Companies Worth watching this morning. First, we look at caterpillar. They are reporting their weakest sales since 2016. Most of that is in the asiapacific region when i saw a 17 drop off and did see some thatess in oil and gas bid was before we got the crazy news of the week the coronavirus in oil prices. They have not updated guidance at this point, but they say they are going to stay in the market for buybacks. Opportunistic tone. They see opportunity in their stocks and are looking to go longerterm. You see the selloff, the companies that might be ok . The house and the havenots. Roche has a coronavirus test that is 10 times faster is the ability to test patients which could help contain the virus. They have now granted emergency use authorization to the test. The test contest 4100 patients a day. Yesterday, zero was the report from the cdc. Game changer. Alix a lot of investors already with joe bidene taking the lead on the democratic nomination. About othernder health care that is not coronavirus related. All the money going to go into anything coronavirus related . Alix the last company we are going to look at is all about telemedicine. Joining us is the doctor on demand ceo. Doctors can see patients anytime of the day over there smartphones and send prescriptions to nearby pharmacies. Thank you for joining us. I know you had to get up early. What is demand . How can you service your clients . Hill we are expressing a surge in demand for our services these days. It is a serious time for the country. People are concerned about coronavirus. They are concerned about themselves and their loved ones. They are looking for direction and guidance on what to do. For the last three weeks, we have seen a growing demand for Clinical Services on our site and through our app. The cdc has issued guidance to all americans to use telemedicine as a first line of the fence. Stepping up our supply of doctors to answer the call. Brooke walk us through the logistics. Andomeone comes to you thinks they have coronavirus, what do you do . Hill we offer a free assessment on our website and mobile app. A lot of people are going there to get a recent understanding of the risk profile. That has been a very popular feature. A subset of people who take the assessment go into an ondemand waiting room to see a doctor. We have live video consultations in all 50 states. We are seeing a growing number of people coming in expressing concern for coronavirus. On the last three days, thursday, about 5 of our total patients were coming to us expressing concern for coronavirus. Im sorry, on wednesday, 5 . Thursday, 10 . Hours, about 20 of our cases have been coronavirusrelated. It is driving the bulk of the volume. Brooke when you see that kind of uptick in demand, do you have to triage . Are you asking people with less urgent questions not to call right now . Hill great question. We do triage upfront. We ask another a number of questions to guide what the patient should do. Should they selfcare, should they see a doctor . A lot of people still want to talk to a physician. We will do a normal physical examination with patients. Doctordr. Thinks thinks you have the virus and you want to get tested, we work with local Public Health officials to direct you to a place you can get testing. That has been a very inconsistent experience across america, as you know, with the lack of supply of testing. But the number of cases has also grown significantly. Done two weeks ago, we had only two referrals to local Public Health. About a week ago, we had done 20. As of today, we have done 200. We are seeing a rapid uptake in the number of coronavirus cases we are seeing an triaging and referring to local Public Health. Alix what is the number one thing you would want to see or need from the government to help you do your job better . Hill i think access to testing. Some change in some policies would help, too. We have changed some medicare rules that allow medicare recipients to see their own doctors that they have seen butre over telemedicine, that does not help people who want to use our service for example. Hopefully, they will change that policy so any Medicare Beneficiary can be covered. There are also state licensing restrictions that are encumbering in how we can treat patients all over the country. The testing is probably the number one thing. Alix thank you for the perspective, hill ferguson, doctor on demand. Thank you for joining me for this hour. Kathryn i wish it had been under better circumstances. Alix a lot of news flow coming. What is coming out of europe i want to highlight for you. Germany is pledging to find whatever is needed for the virus big European Commission says it is ready to green light fiscal stimulus if the situation deteriorates. The finance minister saying there is no limit to the money available and if they need to they will take on Additional Debt to finance the spending spree in germany. The European Commissioner says they are not suspending the growth package but will extend it to the max during this time. S p futures rebounding after the worst day since 1987 and triggering a limit up circuit breaker. We will look at levels to watch. Tune in into Bloomberg Radio across the u. S. On sirius xm channel 119. And on the Bloomberg Business app. This is bloomberg. Alix time for technically speaking where we set you up with trades of the day. Walk me through what you are looking at today. Lets start with the s p 500. This chart shows you the s p 500 relative to the 52week average. Irrational exuberance a month ago. We need to look forward to see if this market is going through a mild correction or real recession. Mean12 from the 52week really Means Nothing. If you look at previous recessions in 2008 and 2000, you get way below that. I think we get about spread that will be good for longterm investing. Alix fair enough. Because you cover commodities, especially gold, show me what you are looking at with gold volatility. If you have to sell anything to go to cash, gold is on your list. The white line is the 100week average of the vix. Is thisproblem i have is a meanreverting event. In 2008, that was the lowest level ever. 2007, we have precedent. Volatility goes up. Gold should continue to go up. If we do it volatility should do, gold should continue to outperform the s p 500. There is a case for that in history. Volatility so far is just the mean reverting higher. Alix thanks a lot. That is it for me. Coming up, the equity derivatives strategist on the day when we are seeing the limit up for the s p. Europe is the big story with the move in the bond market. This is bloomberg. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan coming up, stocks bounceback following the worst day since 1987. Central bank stepping in. China cutting reserve requirements. Finally the fiscal plans in europe slowly coming together. With 30 minutes until the opening bell, good morning, good morning. What a morning for you. Equity futures limit up 5 on the s p 500. If you switch up the board, here is your read on the equity market in america. Almost 6 . Etf 30 minutes away from the cash open. Lets begin with the big issue. Central bank struggling to stem the volatility. The fed Monetary Policy. The ecb. Not going to be able to offset the near term disruptions. It is difficult for Monetary Policy to reassure markets. Sanctions are mounting about qe. Much further to go for it to