Fourth positive session, up 2. 7 . Just the banks really are lower in the s p, a few oil companies. Crude oil trading down 6. 8 , back hello 21 a barrel. Back in itsyield range. The vix at 38 and change. Lets get a deeper dive into the markets with abigail doolittle. Abigail you were mentioning the gains in the s p 500, and certainly that is the case, a risk on tone from a stock perspective. Each of the averages is up 2. 5 . The nasdaq 100, make a cap companies, amazon putting in an alltime high, up almost 4 . Interesting, we have bonds higher, even as stocks are rallying, so that is something to keep in mind. Bank earnings were pretty disappointing with profits plunging and loan provisions on the rise. You were talking about how it is cooler today from yesterdays volatility. This is a year today chart at 90,highs, almost closer to when the s p 500 was closer to 2200. At this point, back below 40. It is worth noting, just a few months ago, if you talked about the vix at 40, traders and strategists would be worried about that. Where we were a month ago, we are cooling off, but still higher. Take a look at some of the airlines, united and delta both climbing higher by 6 , this as airlines are said to be close to a bailout with the government for 25 billion. Those terms are closer to being settled. , on the other hand, down 1. 8 . The news came out that they lost 150 plane orders in the First Quarter. Staggering in the wake of the coronavirus crisis. Finally, jpmorgan, wells fargo off. Ngs kicked not a lot of good news coming out of those reports, including the fact that jpmorgan set aside 4. 4 billion for bad credit card losses. Take a look at some of the other credit card companies. All trading lower with the is atation that jpmorgan tell on this situation, that as we have this coronavirus crisis, americans out of work, some may not be able to pay off their credit card debt. Overall, a risk on day for stocks. Vonnie just three hours left in the trading day. We will see if it holds. Ministers finance agreed on a 540 billion package to combat the coronavirus, but the measures fall short of what those hit hardest by the virus, spain and italy, were demanding, and also admitted any reference to debt sharing. The European Commission vice the budget is ambitious but will play a central role in the regions recovery. From the European Commission point of view, what is important euto recognize the next multi annual will be a part of the recovery. We are open to discuss other ideas and instruments, how they can complement the next budget. In any case, it is clear that the next multi budget will have much stronger investment, financing component. Then we must see how other actions, ideas can complement this. Do you agree that a united europe needs to have a shared debt in order to fight this pandemic . If you look at the instruments which are already on the table, for example, our program to protect employment, it will also be financed by the European Commission, going to the markets, providing this financing to the Member States which is needed. It is done under the guarantee of all Member States, so it is already a form of shared financing. Similarly, the european stability mechanism already has paid in by Member States. The mechanism will go to market to provide support to Member States. In, it decide to invest is a form of shared financing. One of the ways to do this is to get banks to lend more, grease the wheels of the economy even more than they have been. We have heard a lot of complaints about tough new accounting rules that banks have been required to apply, tougher regulation. Committee made a recommendation on how to soften the blow, stretching out the implementation period. Are you in favor of stretching this out in the eu . Indeed. To that end, we are preparing a communication which will put april, we will be existingg the already rules in the eu, which includes supervisors, and will also come with some targeted adjustments. Some of the most to the Basel Committee to delay the implementation by a year. It will also concerned some International Financial reporting standards. We are looking at this, but that is not the only step. What is important now is that banks provide lending to the economy, so that companies can. Urvive this period from that point of view, it was important for European Central bank to decide on this program to provide liquidity to banks. We also relaxed state aid rules, allowing Member States to provide guarantees to companies, banks feel safe to lend during this time of stress. Vonnie that was the European CommissionVice President. President trump speaking moments ago, participating in a meeting with recovered coronavirus patients. These are pictures from that meeting. He said the u. S. Will have less than 100,000 virus deaths, and said he would make a decision on reopening quickly, this as the president and new york state Governor Andrew Cuomo clashed over reopening. The president with recovered coronavirus patients, making several remarks on a number of topics, including joe biden. Earlier, barack obama and his wife michelle endorsed joe biden for the presidency. Anycan follow along headlines that are merged from this meeting on your bloomberg. Off bankkicking earnings season with the lowest profit since 2013, giving investors a preview of what to expect this season as a result of the coronavirus pandemic. With us now is sonali basak. Why was this such a surprise, the amount of Loan Loss Provisions, not just at jpmorgan, but also wells fargo . Sonali they were much higher than analysts predicted. What investors are more concerned about is the uncertainty moving forward, even when we had clarity around the numbers. If you look at both banks, they get pretty granular in terms of industry troubling at the moment, oil and gas, entertainment, travel. Brightt know if the spots on jpmorgan will continue to be the bright spots. Fixed income trading figures were through the roof. Will not hold up . Debt underwriting was outperforming at a time when the rest of the Investment Bank saw muted performance. What comes next is the big question on everyones mind. Spine how does this forward to the rest of the banks that we will hear from this week . Sonali tomorrow, we have bank of america. Like jpmorgan, wells fargo, we should expect a new net interest income. When you can expect is something a lot lower than when you were perhaps seeing last year. Loan lossesns for for bank of america will be a big deal. Then you have Goldman Sachs and Morgan Stanley in the next couple of days. Performancen their is tied to Investment Banking and trading. That standup performance that jpmorgan had in fixed income . On how be a massive tell much share they are able to get at a tough time, when volumes are skyrocketing. Volatility intely the stock market, which will help to offset some of the difficulties in the quarter. What about staffing . Is there a guarantee that when a fullblowns recession, that the banks will keep all of this up . Sonali citigroup says that they will not be laying folks off in this time, but we dont know how long this will last four. Morgan stanley made that promise through the end of the year, barring any performance issues. Morgan stanley also did cut a percentage of their workforce last year to prepare for tougher times ahead. I dont know if anybody couldve expected this tough of a time. Costanks keep a lid on will be an interesting balance. How they will be delivering dividends will also be a big question. Wells fargo said, but see what we can do. Jpmorgan is committed to their . 90 dividend, say that people depend on it. Downe have a stress test the road also that will be an indicator of capital and return moving forward, even when buybacks are halted. Vonnie many of the banks, including the retails, lower. Jpmorgan down 3. 2 . Our thanks to sonali basak. This is bloomberg. Mark im Mark Crumpton with bloomberg first word news. The nations top Infectious Disease expert says the u. S. Is not ready to begin reopening. Dr. Anthony fauci tells the Associated Press the country does not yet have the critical testing and tracing procedures. Floated theump has possibility of reopening some areas by may 1 and said he could announce recommendations as soon as this week. Dr. Fauci says that target is a bit overly optimistic. European leaders are starting to map out their strategy for we open their countries. France says it wants to begin easing restrictions by may 1. Australia and denmark are beginning to open up some schools. In italy, bookstores, stationery stores, and shops selling baby clothes and supplies were a lot to open nationwide today. The number of new cases in europe has stabilized in recent days, no more than 60,000 people have died. Organization is facing some criticism for supporting the reopening of socalled wet markets in wuhan, china. Some scientists believe the coronavirus started in one of those markets, where live animals are butchered. They cane a joe says reopen it food, safety, and hygiene regulations are enforced. Australias Prime Minister called that unfathomable. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. Vonnie thank you. Raise 2. 5ms to billion in bonds and a credit line as it tries to run of the coronavirus. Hotel companies have been boosting cash reserves since the virus spread, sending occupancy rates to record lows. Mollie smith is tracking the company, especially their efforts to tap the bond markets. We have been following along as companies tap out their credit lines. In the bond markets, Hotel Companies are welcome. That is true, definitely today. Marriott has been able to cut [indiscernible] that is a good sign as they move forward with this. It is speaking to a broader theme that we are seeing in the market right now. Companies most devastated by the virus have found a welcome arm, where investors are proving more than welcome to lend to them, granted that much higher rates than in normal times, but investors are being compensated for the risk they are taking. So far, it seems like they are willing to lend to these companies. Vonnie the yield on the fiveyear bond is at 5. 25 , which is in normal times, almost a junk yield. Things are not normal. Iott is an Umbrella Company that licenses its name. What about companies with real estate . Molly we have not seen a ton of others. Wynn resorts was able to similarly tap the highyield market. Marriott is still Investment Grade rated, although it looks like those ratings are all under review now. Wynn is another story that fits into that similar theme, especially in real estate. We have seen some other casino related companies able to reopen the leveraged loan market. Casinowhich manufactures event, and equipment, is also in the market with a leveraged loan where commitments are due. Speaking to investor appetite on risk right now coming in strong. Vonnie were these plans in the works already before the fed that they would go as far as the job market . Say when marriott was planning to do this. Inkers have been proactive advising clients to tap the market, especially those that are highyield rated now, and qualify for the programs. Marriott, if it were to be cut to highyield, would be a beneficiary under the fence program, because it was investment rated recently. Ford also qualifies for the program. Definitely something that Capital Market bankers are advising their clients to take advantage of, to know that one of the biggest bonds out there is on your side. Vonnie we have to leave it there. A fascinating story. Up at 4 30, bloomberg is launching leadership live with david rubenstein. The series happens to begin with the marriott ceo. The show will take viewers into the homes of executives, find out what is top of mind as they navigate the coronavirus pandemic. That is today at 4 30. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn. Theers calling attention to mental and emotional toll of the coronavirus pandemic, and the resulting economic stability. Jamie dimon weighed in on the subject of until help earlier today. The bad economy has very adverse consequences, way beyond the economy. In terms of mental health, domestic abuse, substance abuse, etc. Having a rational plan to get back is a good thing to do. Hopefully, it will be sooner rather than later. Joining us now is laura murray, Senior Scientist from the department of health at Johns Hopkins school of Public Health. She is also a clinical psychologist by training. Obviously, we know a lot of people must be living on a nice edge right now, financially, emotionally, psychologically. What are some of the steps that you have seen leaders of institutions, other organizations make, to make this easier. What can we learn from . For having me. U it is such a challenging time to lead, and it is also time to grow as leadership. That is what we have seen from a lot of leaders around the world. Leadership is not a destination, it is a con didnt journey constant journey we all go through. What we have seen from a lot of leaders is the ability to think outside of the box. These are different times we are going through. Thinking about words like navigating, improvising, redirecting, or changing your perspective, is critical at this time. Vonnie if it is something you want to do but are having difficulty getting past the scariness of the times, is there something you can do to make that easier . You look around and you see the gauntlet,up becoming the leaders they never thought they were, others getting a little paralyzed. What is your advice to those become paralyzed becoming paralyzed . Laura great question. Certaintrive to be adjectives, descriptives, a great leader and how to get there and achieve that is a very different process. As you are saying. One of the things that i think is important is going back to Emotional Intelligence. That accounts for 90 of what sets high performers apart from peers with cynical similar Technical Skills and knowledge. That is really at the core of leading in all the ways that one strives to. Selfawareness, selfregulation, motivation, empathy, and social skills. One of the biggest things is going back to that and trying to manage that. One of the things we talk a lot about in Cognitive Behavioral Therapy is learning to retrain your brain. When you actually think different things, you can manage your emotions or manage the intensity of your emotions in very potent ways that can lead to very different behaviors that tend to be more creative and productive, and get leaders the outcomes they are looking for. Vonnie is there a place where people can go and try to learn this . We all have actual time on our hands these days. Books, websites . Laura [laughter] so true. Some of us have at your time on our hands, some of us are busier than ever retraining their staff, coming up with new ways to manage their organizations, businesses. There are quite a few sites. If you just google Emotional Intelligence certainly there are books out there, but a lot of people now offering master classes, offering free information on that. Different websites have more information on how to retrain the brain, if you google Cognitive Behavioral Therapy. Vonnie our thanks to you, laura murray. The school of Public Health is supported by michael bloomberg, founder of bloomberg lp and bloomberg philanthropy. This is bloomberg. Mark former president barack obama has endorsed joe biden for president. Mr. Obama said his former Vice President has the character and the experience to guide us through one of our darkest times and heal us through a long recovery. He added choosing joe to be my Vice President was one of the best decisions i ever made. Good at following social distancing and stayathome orders according to the cdc. They say people responded quickly to directions from authorities. Models had estimated half the population would embrace the recommendations. Instead, more than 90 have done everything from carefully washing their hands to avoiding the workplace. India has extended their nationwide lockdown through may 3. Prime minister modi says social distancing is been a great benefits. India has reported a little more than 10,000 rotavirus infections and 358 deaths, but its testing rates are among the world lowest. Global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Live from toronto. Im amanda lag lang. Shery im shery ahn. Here are the top floors stories we are following. J. P. Morgan chase and wells fargo releasing results and confirming fears. Both banks importing massive declines in profits. U. S. Oronavirus brings the economy to a standstill. Italy reporting the fewest confirmed cases in months in new york Governor Andrew Cuomo saying the changes in hospitalization has turned negative for the First Time Since the onset of the crisis. Amanda want to get in to a check of the markets. Gains across the board. That is despite the fact that we had dire predictions from the imf. Tech iswth down leading the way across these markets. Big tech names gaining. Bloomberg Consumer Discretionary doing well in the s p 500. Energy and financials, look at the biggest names in the reporting earnings for part of the reason. We are getting daily updates on the pace of this illness. Italy with the fewest new acacias new cases in the month. A mixed bag out there. We did hear from j. P. Morgan and wells fargo today. The set aside for Loan Loss Provisions is really the most significant piece we are watching. Konrad is an analyst at da davidson and is watching this. We knew this would be the thing to watch. Are you surprised we were lossaching levels of loan provisions near 2009 . David not necessarily. We are certainly in Uncertain Times with the economy shut down, hopefully not too much longer. Uncertainty regarding the government programs, the banks, and now with the new accounting rules for the banks, they now have to provide or up to 2. 5 years of consumer chargeoffs and like learn lifelong chargeoffs. Some is a shift in accounting pulled forward a lot of credit losses. What was a little surprising for the investors for jp morgan is after the books were closed, the economists change their assumptions to more dire forecasts over the next quarter. They did forecast further provisions over the next two quarters. We have seen u. S. Banks being supported recently but what happens given the dire forecasts . How do you play defensive in the sector . David we would recommend two aspects one, bank of america we knew having the lowest credit risk throughout the group. Since thedo risked last crisis. Theyre not overly exposed to underwriting and m a. When of theiting is bright spots in the quarter. They have a lower exposure they j. P. Morgan. We think that is a bit of a safer play. Citigroup, they are priced at 55 of its annual book value. Some of this is extremely built in. We expect a very large provision tomorrow because they have cards book that is the like size of jp morgan, but a much cheaper valuation. City is at around 55 . We do have this extraordinary gains from trading activity for jp morgan, certainly record numbers. Do you expect to see that elsewhere given the volatility in the market . Will that be the silverlining for banks this quarter . David it may be for this quarter. Coming seen volatility quite a bit recently, which is a good thing, but not necessarily for the trading. We saw equity derivatives strong for jp morgan. We will look to Morgan Stanley to have similar results. J. P. Morgan had a strong fifth quarter. They highlighted rates currencies and emerging markets, which is the hallmark of citigroup. We expect decent trading out of citigroup tomorrow. Amanda who is most exposed to the feds recent actions . ,avid in terms of the rate cut i think bank of america would be one of the names, actually. But our point was that when it wrote tangible of it was a credit story and not a rate story. What we will see over this quarter and next quarter is although the fed has cut rates thebasis points in march, funds have not moved down. And Mortgage Rates have not moved down with treasuries, but the banks might report a little might bed the outlook better than what we are expecting because of those dynamics. Banks, as you noted, play an Important Role throughout this whole recession. Will they be positioned, and some better than others, i will guess, to do what they need to do on the other side of it . Despite the fact that will have high loan losses and defaults, will they be ready to support parts of the economy that we need them to on the others of this . David i think they will jp their talked about having rates go down down to a capital level around 10. 5 versus maybe their target at 11. 5 to 12 . That is because they are sporting a lot of Corporate America and Small Businesses as well as with the deferred payment on the consumer side. I think the group is in good shape to help support that eerie as we move through next couple of support that. As we moved in the next quarters, the bond market is opening and companies can take away pressure from the banks and go into the bond market which would be helpful. Thank you very much for your time today. Coming up, we will discussed fixed income. This is bloomberg. Shery this is Bloomberg Markets. The Federal Reserve kicking off the paper buying program today. Joining us by phone to discuss is head of fixed income for the americas, greg staples here great to have you with us. When you take a look at all of these actions, how much impact is coming from just signaling alone and how much from actually use . Actual that is a funny thing there they have talked about different programs and push beyond what was allowed to be done under the Federal Reserve act. He has created many different acts to handle the fixed income market. The remarkable thing is, he has not done anything yet. He has talked about primary market and secondary market purchases, potential assetbacked purchases, but these have not been implemented. The fact has been a very strong and powerful rally within the fixed income markets. We have seen investmentgrade spreads coming in. The new issue market has opened up here we had the most robust market in the last weeks of march have ever had and continuing through april. He hasnt lifted a finger. It was all in the promise. Seeing we are governments already begin to think and worry about the effect of the fiscal policy in the after when we socalled normalized. Our Central Banks and the Federal Reserve which is going to extraordinary lengths, planning appropriately for what comes next for the effects that these policies will have was covid19 passes . Greg it, havent talked about but i hope they do. We have fiscal policy accelerated, Monetary Policy accelerated to the floor. Hopefully we come to the coronavirus. It will be a little different but hopefully we cover in the fed especially will have to start thinking about removing the stimulus before everything gets overheated. I havent heard anything yet, but that have to start thinking about that. Probable reduction in terms of purchases in the treasury market and look at the long yield curve and raise the cost of debt. Been criticisms on some of the feds part that could get them into a slippery slope that instead of stimulating the economy youre simulating sectors of Financial Assets that will actually benefit investors. How do you gauge that . How do you draw a line in a situation where your not only throwing in the kitchen sink but everything youve got . Greg greg you have to be cautious. It is a very small number of companies. It is for, delta airlines, macys. What it does do is gives cover for those companies that are still investmentgrade and might be at risk of defaulting would be otherwise shut out of the market. Ets, theyhighyield say it is the preponderance of investment will be in investmentgrade. It will be a small part of their program and not in part impact the market that much. Amanda greg staples, head of fixed income for the americas. Appreciate it. We are focused these days on whether covid19 is leveling off or not. Earlier today we spoke to the cfo of Johnson Johnson, once moving higher today. Here is what he had to say. Vaccine,espect to the things continue to progress. As early as late january, we found out the sequence, we were able to identify elite candidate with two backups. We are now doing Clinical Research and hope to be first in human by september and that should lead to a readout of the data in late december with the hopes of producing a billion vaccines in the early part of next year. We are simultaneously ramping up Manufacturing Capabilities across the globe to ensure we can handle that kind of demand. Things are on track from what you heard a couple of weeks ago. Amanda how are you able to ramp up so weekly when my understanding is vaccines take years what makes this difference . Joseph we are able to rely on a platform we have used in a number of other vaccine trials. For ebola, hiv, zika, we were able to use the same platform manufacturing line had a higher yield. That is what is enabling our abilities to ramp up to such high abilities. It gives us a high degree in terms of safety as well. Previously you said it will be sold at cost. Can you give me an update on that . Is that for just this pandemic or forever . Joseph our announcement was to provide this cost only in the emergency and simply seeking to recapture manufacturing and distribution costs. We realize the pandemic is something that Johnson Johnson can utilize its expertise as well as Financial Stability to make this available. That is our plan right now. Thena what does that mean for when we return to normal for people who need the vaccine . Do have any clarity on that . Joseph we came out with the statement of notforprofit so Johnson Johnson does not intend to make a profit on this particular vaccine during the pandemic, and that is where we are focused. We are responsible in our pricing. We came out with a transparency report in for the fourth year in a row we have decreased prices. We want to make sure we get to the Clinical Trials and have a vaccine that is widely used across the globe to prevent any further impact from the pandemic. Amanda as a human, i really appreciate that. Talk about the Consumer Products versus medical devices. Because of covid, in the First Quarter, is your ability to grow your Consumer Health products be enough to offset medical devices . How do you see that Going Forward . Joseph they will be in line with the expectations that we had in january when we initially issued guidance for 2020. You saw a little bit in the First Quarter as people, i miss the Consumer Products, tylenol, altering, maybe pantry loading. In pharmaceuticals, you saw pbms change their cycles in terms of refill from 30 to 90 day scripts. We had some of that in the front and loading front end loading, it will not offload what we expect to see in the second and third quarter. We anticipate recovery of elective surgeries in the fourth quarter. That is how we are looking at things right now. X and recovery for surgeries, how do you see that back to normal . Joseph probably back to normal with a little bit of improvement with improved capacity from hospital systems. We have had a chance to speak with a number of ceos. One of the things they are struggling with is the financial challenges of being unable to perform elective surgery. It is important to their financial equation. They are being responsible and prepared for covid19, but many hospitals outside the hotspots are not seeing that type of activity come to their hospital and they are underutilized at this time. Amanda that was Johnson Joseph wolk. Erik schatzker has an exclusive interview. This is bloomberg. Innda i am amanda lang toronto alongside shery ahn in new york. We get a closer look inside the deal and the workings of how to companies came together. There is a new book called no filter. What was one of the surprising things you found about how these two businesses came together . The common thinking we have about instagram within facebook is that ever since 2012, it was this company within a company. It got to be independent with its own brand and operations and for a while that was true, it really came to the forefront is immense tension between zuckerberg and the leaders of instagram, and especially the ceo. Once instagram got to the point it was incredibly influential users,up on one million facebook was threatened by its success and felt like they needed to restrict the resources for instagram in favor of maintaining facebooks dominance. That was really an interesting thing for me. About the tap on the culture. The book isnt just about the business story but how businesses within instagram impact how we behave and how we interact with one another today. Coming at an interesting time when facebook was facing blowback. How much attention was colored by the fact that we had Movement Like facebook going on at that time . Sarah it was certainly influential in zuckerbergs thinking. This company was going through quite a lot and had public blowback and yet instagram seems from facebookape from users. People were logging in to get a way from facebook. If you think the story we all wasnt quite the way it was in reality. Behind the scenes, as facebook restricted resources for instagram, instagram has been a lot slower to deal with some of the big problems that it has, like with misinformation and with anonymity and all of these has had on facebook their end. Instagram has become a second or third priority for facebook, just as cultural power is growing. It almost feels as though instagram has been successful for facebook despite facebook in a way. Sarah in a way, what i would say it was also in the beginning incredibly necessary for instagram to join facebook. Back in 2013, they only had a dozen employees and facebook was about to go public. They spent more money than anyone thought instagram was worth since they didnt have a business model. The biggest problem was that instagram was crashing all of the time. They didnt have very stable ways to manage all of their growth. Growth is the thing that facebook is expert at. They are very good at figuring out how to grow and grow and get more people in time and attention. Shery we are running out of time. Hat was sarah frier this is bloomberg. Because you cant get to the theater, were bringing the theater home to you, with xfinity movie premiere. Theres a world full of other trolls. How different can they be . Our brandnew service that lets you watch all the latest movie releases from the comfort of home. Trolls world tour available now. I will protect you no matter what, pinky promise. Just say xfinity movie premiere into your voice remote to bring the theater to you. Is 2 00 in new york, 7 00 p. M. In london. I am scarlet fu. Romaine and i am romaine bostick. And this is Bloomberg Markets the close. It looks like we have a rally on our hands today. A lot of folks have been looking for reasons to buy. They seemed divided today. The major indices up across the board. The dow jones up 2. 5 . The s p 500 up 3 . More importantly, it is trading above the key 2800 psychological level it tested thursday and yesterday and could not hold. 4300. Above you have stocks at record highs. Amazon, walmart, eli lilly. You have a lot of Cloud ComputingCompanies Trading at a record high