Francine theres a different term people who are in lockdown in the u. K. And other parts, people being bored. The different tone from people in charge saying we are trying to keep you safe. We dont exactly know when we can reopen or how much. It is a great experiment. If you look at italy, france and germany, do you reopen automotive first . It is going to be a delicate situation. We will have to see one data time. As i speak to you about optimism, just outside my window beneath me next to mount sinai on fifth avenue, the drone of sirens. We begin in new york. May 15 is the date the state could be reopening. Governor cuomo laying out a plan that starts with construction and manufacturing. He said it would probably begin upstate before moving down south to the city. Yesterday, the state reporting 367 deaths, the lowest number in almost a month. U. K. , Prime MinisterBoris Johnson back at work. Johnson recovering from coronavirus. In his first public statement, he urged people not to give up on social distancing. He said lifting the lockdown now could risk the second spike of infections and could do more damage. Pledging, falling below 50 below 15 afalling barrel. Investors working on the massive oil glut, they fear it could lead to a rerun of last week. Deutsche bank joining other investment banks in beating First Quarter projections. It warns provisions for bad loans may have hit the highest in six years. Tsches also predict commenting 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. This is member. This is bloomberg. Bonds,uities, currencies, commodities, no question there is a risk on field. Isolated, hugely high with an historic average of 20 get we come in better complacency him blow through a 39 to a 36. That is a huge deal. As viviana mentioned, oil comes in. West texas is a big deal, under 15 a barrel. That deserves careful watching. Higher, curves steepening. It is not open, but i will watch brazilian real. Of all the charts, the worst went to meet his brazil. That is a compendium of all sorts of vix that is a compendium of all sorts of issues. It will be interesting to see if real race out to new weaknesses. Europe, looking at stocks rising. This as Major Economies are edging toward reopening. The bank of japan boosting stimulus measures. The dollar weakening, oil slumping, yen gaining. Lots to talk about. To reset on a global basis, marvin loh. He is looking at the larger picture as a macro strategist. What do you do with equities right now . Take the global and distill it back down to this conundrum we have about with her equities. How do you place new capital now in the stock market . I will be honest, it is challenging. Valuations, volatility and expectations and how they continue to trend lower week by week. Get myarder for me to hands around buying it from fromtion buying it valuation perspective. Sorties are trying to calm things down, but as far as i can since thats why were getting into that market. Tom we need to understand loh, mr. Loh is qualified to take a question on technology. Of tower hudson reemphasizes today that things are different be a this Technology Juggernaut has huge monopoly advantages and they are going to see revenue gains to go with it. Do you agree that the things are ever present . I think they have an advantage where the strong get stronger. They had the cash flow going into it, they continue to have access to cash flow even during periods when the economy is shut down. They would be to, available there. Come a longlds duration assets are easier to value or accepting that market. I think there is an advantage they have. We are exactly dsc where exactly do you see value . I am looking for the clues andive us more be able to quantify the multiples we are putting in the market. Abouthard, i am thinking potentially Slower Growth and what that would imply. Maybe if you havent added to assets like gold, antiinflationary types of assets like tips, given the amount of vanilla that is out there. The valuation perspective without more clarity on the type of economic recovery, it is hard to get a handle on where you want to aggressively put capital to work. What is francine what is the one question you want to make sure you answer correctly . What happens to deflationary or is there likely to be a pickup in deflation . Understanding the inflation after low inflation or the deflationary type of environment we have is important. I think just saying that large Balance Sheets from Central Banks is going to generate inflation is simplistic. They havent been able to over the last 10 years. Has benefitedlus Financial Assets more than anything. Certainly be on the lookout for inflation and watch how supply chain, potential less globalization. Just buying it on the concept of big bank Balance Sheets is a little simplistic. Tom i am going to go with you on this. Here is maybe best exemplified in credit spreads. They can go either way. What are the dynamics of ig highyield you see . Which way will ambiguity tilt . A partner with the fed, certainly. Understand they have more firepower if they need, and if that market seizes up they are back in there. What they are trying to do is provide liquidity, not solvency. Have started to see the difference in Credit Ratings reflect that, whereas earlier it was just lets go all in with the fed. Tom i love that. There partner with the fed. Silenceve a moment of its dont fight the fed. Am i going to climb aboard assets . [laughter] marvin it is certainly comforting to know they are there and are not hesitating. Financial assets will ultimately reflect the value of underlying companies. The fed is going to make sure we get the we get to the point where we value a clearer picture. Tom great way to start this. Street. State i love his comments there. Course with state street. This is the oil, one guy you want to talk to about american oil. For those of you that live within three zip codes of the hudson, cushing oklahoma. Stephen short. Stay with our spirit this is bloomberg. Stay with us. Tom tom one thing we can say for certain is if you need to understand the bells, the pipelines, the dynamics not just of brent, but the 47 shades of hydrocarbons, you speak to stephen schork. He writes the unreadable schork report with this so many sure about fargo oil and heating oil off of new jersey, it is unreadable. He knows what is exactly going on with oil. If you were to have a cuppa coffee today with the president , what would you tell him about the dakotas down to texas . What would be your number one inside. That the situation is dire. For the small producer, that is. The shale people in west texas and north dakota. Can in in by saskatchewan up past calgary a andt and calgary edmonton, landlocked producers pipelinet have enough capacity, they are dying. Looking at a situation now that, yes, the futures contract with negative, but these markets where you are landlocked, they are trading negative. Tom now that i think about it, you do look a lot like james dean. In those james dean reese, oil goes under. The sameing to see string of bankruptcies or can we get this done differently this time . It is hard to imagine how we dont see an acceleration of bankruptcies. Inre was considerable debt the oil patch. Of 150imates upwards billion. Inside of two years, this is going to be a different landscape. Producers,maller those that have good acreage, those that have acreage that is easy to drill on are going to be acquired. You are looking at an industry that will ultimately come out of withstronger than ever good acreage being bought on the cheap by the larger producers. These claims that this is a war on shale, perhaps it is but it is a war that is most likely not going to be one buying by those who started it not likely going to be won by those who started it. Be in the remain will hands of much stronger and leaner companies. It isil will survive but going to be ugly. How ugly . You talk about bankruptcies and the like, is any of it systemic . Danger that shale producers can drag stuff down with it . The importance of the Energy Industry to the economy is underestimated. Texas alone, in houston, the state has made tremendous strides. It has diversified into academic research, technology, so forth. Counts for 15 of the state economy. Pennsylvania, tremendous stories of what we are seeing in the ohio valley and the epicenter of the rust belt since the collapse of steel in the 1980s. The birch the birth of petrochemicals being brought on our huge drivers. Up and down the river valley. Down to west virginia. Of potentialamount for continued growth. Areas that were once left for dead can wither up the vine only up until 10 years ago. Seeingger of what we are in texas and oklahoma, the oil patch, but also where we are starting to see rebound brought on by these industries in west pennsylvania. Francine is it a systemic danger . Stephen tremendous. It is an industry that is a driver. It all begins with oil. Seeing in the pullback, it was odd the stock market crashed into the oil crash. Fundamentals that brought on last mondays decline wasnt just one reason. Why the market crash, i do not know because oil has been on this path for three months. Tom i have 18 questions. They bought anadarko and hindsight at the top of the market. Occidental has a huge midwest exposure as well. Is that a good thing . No. Hen it is bad. Already on the natural gas site you are looking at permian which does not have a single natural gas rig employed, hasnt had one consistently for three years. Of the geology, the amount of crude oil being pulled up in the permian, youre bringing natural gas with it. That is just the geology. Did not have the take away capacity. That gas was literally being burned at the tip. And just sent off into the atmosphere. It had no economic value. Gas,is called associated one of the reasons that have been keeping natural gas outside of the industrial pullback in a recession. Permian not a single matin gas rig because of all the crude being pumped out, the permian was the second largest area in the united states. That is not good for your bottom line. Now that you have got oil 10 below what you needed just to keep your existing wells, you need to 2320 six dollars to keep oilproducing. The fact we are below 15 is going to hurt oil and gas. Thank you much. Stephen schork. Coming up, a conversation on early on oil with jeffrey currie. This is bloomberg. Viviana lets get your business flash. Fire could have liquidity problems in the u. S. The German Company has seen more than 52,000 losses they claim round up killer causes cancer. The big question is if they will settle. This speculation could cost around 10 billion. Bleeding cash, the warning from the ceo of airbus. Telling employees the Company Needs to quickly cut costs to adopt to a radically shrinking industry. Airbus Companies Fighting to survive, unable to accept new aircraft. Boeing is preparing to reduction in jobs. To slash production and jobs. Tom that something worth watching. The trend in oil this morning is most difficult. Equity markets up nicely. The dollar weaker as well. , aing up, french hill congressman from little rock. Pandemic andn the the idea of an america that wants to get back to work. Stay with us. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Tom good morning. I am tom keene in new york. What you need to know, risk on fuel. When you see huntington beach, california with all those people on the beach this weekend. Aboutets your attention the struggle be are having to get back to an economy that can prosper. That will be a message from the president. It seems like a shift as dr. Birx and brad pitt i mean dr. Fauci can put the economic recovery the white house looks for. Most important to the president is congressman french hill from little rock. He is the republican the president desperately needs, someone in the middle ground that can beat democrats who want to take the middle ground. Congressman, wonderful to have you. Partyoes the republican and what does this president need to do so that democratic moderates dont win big . It is good to be back. I think the most important thing he can do is be an effective this virus inting getting the economy on track. I think it is a treacherous path, but when that history has dealt in. There are all sorts of small stories, but one directly goes to your arkansas landscape, meat processing. Tyson foods wanted a name change years ago, they wanted to change the name of the state to tysons. [laughter] they are shutting down because of this virus. What do you doing and you need from washington to help meat processors stay open . Sonny perdue, agricultural secretary has this at the top of his priorities. We have covid shutting down pork and pig processing plants. Significant in supply chain if we are not able to keep those plants open. What do you worry about the most . Getting out of locked down too soon and having to reclose, or taking too much time getting out . Mr. Hill thats right. In coming be careful out of lockdown. In arkansas, weve got about 3000 cases. Prudent under our governors leadership in shutting down anything that could be considered a source of spread, but leaving others open. They make it easier for estate like arkansas to come out of the lockdown and still prudent still pursue cdc guidelines. As we talked about camus we had hotspots that had severe implications for the country. Francine there have been pickups, to put it mildly about what President Trump has said. How do you think you will be judged on those . Stephen President Trump mr. Hill President Trump loves to say what it is to say what is on his mind. That causes concern. I think he is speaking from the heart. He wants to come up with the best advice from his officials and policy officials. Defeat the virus in the white and tryn the right way to lead the economy back. It is a tough position. Zurich, switzerland is not little rock, arkansas. Wrote about this social conundrum we are in, which is we are trying to do this by eliminating risk. I speak tossional says that is impossible, yet people like you have to deals with this. You have to gauge risk moving forward. How do you balance the risk of further illness, further death after this primal scream to reopen . Think americans are filled with common sense. Americans dont want to become ill, they dont want to their families to become ill. Phased why these careful openings with rules and guidance help americans make good choices. Think this is why you hear people call for broader testing. Because of this risk balance issue that the essay brings up, if we know who is most vulnerable, we should provide care for them. Asymptomatic can go under quarantine. It is tough when you have a black swan sweep over the world and you dont have all the tools to fight it on day one. Tom one final question. I say this with Great Respect to your career, the way you have always been linked to arkansas, is there any legitimate worry we are going to have meat shortages . Maybe it is not top of the fold, but with all of your contacts, could we actually have reach shortages . I hope you will continue to explore this. I think there is some probability of that. Why . Our supply chain is geared for of food inat 50 america is consumed in a restaurant. Now americans are eating at home, that has disrupted supply chain direction. Withyou combine that production shutdowns in the midwest, you get this disruption. I think that is why sonny perdue that is on the top of his worry list. If he looks for labor and Health Conditions to keep production open. Tom we have got to leave it there. You for joining us. City, viviana hurtado. Viviana new york state is looking at may 15 to begin reopening. Sayingr andrew cuomo construction could resume upstate before moving back down to new york city. Yesterday, the state reporting the lowest number of coronavirus deaths in a month. Has learned President Trump called his health and Human Services secretary, told him his job was safe. Oust a say trump may czar because of criticism over coronavirus response. President trump treats mr. A czar is doing an excellent job. Europesa key test of efforts to restart life. Manufacturing centers will resume. The Prime Minister warning a second wave of coronavirus could cause irreversible damage. The mystery over kim jongun keeps growing. There is a report by a chinese medical team. Another says his train was spotted. Kim has not appeared in state media in over two weeks. South korea maintains rumors he may be dead are untrue. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I and viviana hurtado. This is bloomberg. Francine thanks. Bronerup later, youll this is bloomberg. Earlier on spoke to marvin king. They started asking him about the lockdown. What the best fit and it was. The best way to end it was. Think the treasury and the bank of england has made clear they would provide whatever stimulus they judged to be needed. Notresent, stimulus is needed because the government has told us to stop working. Though they are trying to stop the economy from functioning, to simulate it at the same time would be a contradiction. The question of stimulus is one further down the road. The bank of england can take whatever measures appropriate very quickly. I dont think that is the immediate issue. The immediate issue is how to prevent firms and businesses from going bust. Prejudgen we shouldnt what businesses will need help further down the road is that it is quite likely that no one can know at this stage that there will be a change in the pattern of spending. Peoples habits, how they choose to spend their money, whether there is Less International travel and more gardening. We dont know what will happen but it will be a mistake to lock in now for the permanent future a pattern of spending and support offered to companies that would guarantee them a longterm future. What we need to do is recognize we have suspended the operations of an economy and should therefore suspend bankruptcies in the shortterm in order to get to a point where we can start to allow the market economy to function again. That will determine which businesses survive and ritual. Front. E on that in terms of supporting businesses, we have had the Business Interruption loan , uc designoan scheme flaws . Do you see design flaws . The biggest problem has simply been logistics. Im sure it is possible to design a better scheme. In more weeks im sure the treasury could have done so. Lets not be the best be the enemy of the good. It is pretty good. I think the chancellor might will do a good thing to extend the guarantees to 100 , if that breaks the logjam. The problem was that going ,hrough the Banking System which looked like the sensible way to do it, has in fact meant we have been subject to, inevitably, the desire of banks to push businesses toward other loan schemes, or concern the banks themselves would still be burying losses. All of this has made it more difficult i think the government needs to get a grip. Improving from the slow start, but i still think they will need to do more. The other way of approaching it would have been to say many businesses that were viable last year pay taxes to the unearned revenue, whether it was income tax or value added tax. We could have considered reversing those taxes, allowing to repay tax payments in the form of a loan which later on could have been a grant. It is astage, logistical issue. Rather than worrying too much about the design. The bank of england there was lots of nuance, lots of different ideas. I listened to his thoughts on the delay of bankruptcy that seems to be front and center. Center, mark is doing better. A great debate about social distancing. We could stop by and speak with josh rush are seen with Bloomberg School of Public Health. We will do that next. From new york, this is bloomberg. Francine viviana lets get your business flash. Learned Richard Branson may save Virgin Atlantic airways. It is a bid to attract outside investors. The British Government has resisted. Just how much branson would put in is unclear. Group announced convertible bonds were preferred debt. Business groups want to put minimum wage increases on hold. They are pressuring democratic officials to delay them. An argument is the mix of economic crisis. Struggling businesses cant afford to give workers a raise. Laboria agreeing, but union saying workers will need the raise. The german athletic choir adidas forecasting its First Quarter daily loss. First quarterly loss. Losses are likely to fall 40 . Two thirds of Adidas Stores remain closed. Thank you. Tom we have been speaking with the experts. Joining us now from Johns Hopkins university and the Bloomberg School of Public Health is joshua sharf steen. He has been more than generous to help Johns Hopkins. It is percolating as it does with every viral and pandemic. It is not in the headlines but in the minds of all, the ,uestion of viral reinfection mutation and the idea of how we will respond, infected or not infected, to the virus in the future. What is the current belief you have . I think the current reading is, like with most infections, there will be some degree of immunity. For much and how long is unknown. It is also not known which tests will capture that. Not think there is concern this will behave very differently than everything else. A desire to understand the specifics before making policy. The is clearly getting better. When do we get to where we flatten the curve . Theou extrapolate any of algorithmic glide paths, is it days, weeks or months to flatten the curve like new zealand . New zealand is going to be a high bar. Particularly where there are a lot of People Living together. I think the curve may look different in different places. Will model one thing one way, but what happens may be different in the models will have to be adjusted. Are learning what is like what it is like. There is still uncertainty about when we will be able to return to normal. Are the newat studies that give us more of an indication what drugs are used . There is more evidence hydroxychloroquine. Hydroxychloroquine is not being shown to work in different studies, and may be dangerous. Best of these studies have not been published yet. There is also studies coming out and some studies in the shortterm about convalescent plasma. There may be others. We will hit a period where there will be a lot of studies coming out. It is important to look at different things, not just Overall Results but how big an effect. Atone point his illness one point in the illness is the study being done . Theres going to be a lot of information coming out. I am going to be looking at people who really understand viral illness to interpret the studies. Tom francine how long does it take to understand the consequences of a drug, and at what stage should they be administered . Three months, six months . It depends. For many of these it will be months. Not many months, but months. Not weeks or days. I think we will all learn more about what it takes that would point. Francine what is joshua sharfsteins social distance . Tom i try to steer clear from people. Joshua i am wearing a mask if i think i will encounter somebody headed to the grocery store. I am also somewhat obsessive about washing my hands. Bringing hand sanitizer, the usual. It is really a challenge to keep it top of mind. I think that challenge is getting easier. I think it will still be quite a while where we are going to have to change our routines. Midas will start now. Might as well start now. Tom wonderful update with Johns Hopkins university. We have plenty more to look at. Cooperationbit of a with the doj which impacted the markets. There is a list of the markets we have been talking about. U. S. Futures rising, european stocks rising. Nothing too ugly out there. Oil slumping. I would also look out for the fact that markets are taking solace in the fact that Major Economies are edging toward gradual reopening. It will be interesting to see. That is the theme across america. Awill say, it is decidedly different monday morning then we have seen in three or four weeks. But the the markets, mood. Stay with us for more. This is bloomberg. Alix unlimited buying power. The bank of japan commits to unlimited buying of Government Bonds and ramps up purchases of debt. Toope outlines plans emerge from lockdown. And deutsche banks surprise profit. Revenues beat estimates, while earnings season is now in full swing. Welcome to bloomberg daybreak americas on this monday, april 27. Im alix steel. Lets get right to it. We had softer futures overnight, and then the bank of japan taking off any restrictions on Government Bond buying. I saw one note that said the event of japan purchases note is no bigger than all of japans gdp, so that is leading optimism in the market, although not a weaker yen. Oil again taken out to the woodshed, particularly in the u. S. , down by almost three dollars. It is time for all the market moving