Off hard over the past few weeks. Scarlet they will have to basically refund or move all of the holders to the next season. Among the 24 groups in the s p 500, only two groups declined. Because of the Safety Company safe haven nature of their business. We have seen banks and auto companies. Banks leading by 5 , auto stocks by 4 . Of centralin terms bank announcements. The boj announced this morning. The fed on wednesday. A lot of people have said the excitement as worn off. Reiterating case of that they are standing by as needed. Of forgetou kind about the fed in the middle of all this. Yana, we do have the fed coming up this wednesday. They have pretty much done all could reasonably be expected for them to do so far. Are you expecting to hear anything more on wednesday that would suggest Additional Support for the economy or the market . Yana there has been tremendous, i think, global stimulus, particularly as it relates to hear. I think the continuation of the same theme, that they are doing all they can. Ultimately, i think it comes down to sentiment. We do have certain things in place for the economy to resume. , need too have testing have the virus under control, and devon and demonstrating some stability postreopening. I think that is what needs to happen more than anything to sort of bring back the recovery we are all focused on. Scarlet the Federal Reserve are working with the same information we are, which is that we are waiting for signs of more testing that will allow people to get to work. Until that happens, we are kind of all in the dark here. Yana we are also to working with imperfect information and trying to make the best case assumptions. I am looking at 10 year treasuries here. Evaluations in the s p 500. We dont know what the final unemployment numbers are but based on the most recent weekly activity, it is going to be ugly. Earnings and certain valuations are already reflective of that data. The point of investing is to look forward. I think, as investors, when so frameworkr valuation is based on earnings assumptions, we have to think 2020 going to that transitory year and 2021 will see a recovery. Perhaps it is not a v shape. Perhaps it is a little bit of a w shape. People need to see both the public and private sector doing what needs to be done to sort of resurrect that sentiment trade and investment in the economy, opening up the economy to where we were not that long ago. Ourselves as we found sitting right here, i think we can see what the future might hold it for couple of things go right. I dont think ever in history have we had so much capital, mental and Financial Capital devoted to one cause. In many ways, this is our world war. We have the same sort of villain here. I think that is a tremendous support. I certainly want to bet on u. S. Economy and the folks on the frontline fighting to find a cure and therapy for this horrible virus. Romaine as you are speaking, we had a headline saying that the covid19 cases in the u. S. Rose 2. 3 , the slowest pace this month. That is what a lot of Market Participants and regular people out there are waiting to see. We are waiting to hear from President Trump who is at the white house and will be speaking andhe covid19 response adding the economy reopened. Given that you have a reopening that is going to be partial in the sense that some stores will be allowed to open. Some stores that do open will only allow 25 or 50 of capacity. Does that change for you at all the trajectory of an economic rebound . Yana i think you said it well. I think folks need to prepare themselves for the fact that it will be a slower than expected recovery and probably an uneven one. Just like we are opening up the country in various spots, you will see these peaks and troughs at various times. I think we need to prepare ourselves that it is not going to be the synchronized recovery. We just need to be patient and how we go about it. A lot of folks understand how we got here and are doing the right things about getting to the other side. The other side will look at her but the recovery will be slow and uneven. Much andthank you so hope to talk to you soon again. That doesnt for that does it for the closing bell. Whatd you miss . Is next one will be looking at impact on the food supply chain. This is bloomberg. Live fromroadcast a new york to our viewers worldwide, i am Romaine Bostick alongside scarlet fu. Scarlet here is a snapshot of how u. S. Stocks closed. Leading the way, up by almost 4 . The fed and ecb will both be holding scheduled meetings later this week. Now, with some countries and some states easing lockdown restrictions, it is still unclear how we will be dealing with the coronavirus going forward. We spoke with joshua sharps team at the Johns HopkinsBloomberg School of Public Health about testing community. I think the current reading, like with most viral infections, they will be some degree of immunity. For how much and how long, it is not known. It is also not known which test will capture that. I dont think there is concern that this will behave very differently than everything else, but there is a desire to really understand the specifics before making the policy. The glide paths are clearly getting better. When do we get to where we flatten the curve . If you extrapolate out any of paths, arehmic wide we flattening of the curve in days, weeks, or does it take months to flatten the curve to be like new zealand . Zealand is going to be a high bar for places that have so much virus and particularly where there are a lot of People Living together in dense areas. Model will model one thing one happens,what actually the models will have to be adjusted. I think it is better than being on the front side of the curve. It is still a lot of uncertainty about when we will be able to return to normal life. The new studies that give us more of an indication of what drugs are used to combat covid19 . Hydroxychloroquine has not been shown to work in different studies. Highquality studies have not been really published for that. Studies coming out on an antiviral drug. There will be some studies in the relatively shortterm about convalescent plasma. A periode will hit where there will be a lot of studies coming out. Butjust the overall result, at what point in the illness is the study being done. There could be a medication that works very well early but not so well late, or vice versa. Ist i am going to be doing looking at people who really understand viral illness and how to treat it to interpret the studies that will be around. Take toong does it understand all of the unintended consequences of a drug and at what stage . Three months, six months . Joshua the studies that are available, they all get looked at together. For a lot of these, it will be months, not weeks or days. Does joshua sharpstei ns social distance when you are trotting around . Try to steert clear from people as much as i can. I am obviously wearing a mask if i think i will encounter somebody along the way. I am also somewhat obsessive about washing my hands before and after, bringing and sanitizer with me, the usual. Challenge and i tried to keep it top of mind. I think the challenge is getting easier. I think it will be a little while that we will have to change our routines. Might as well start now. Romaine that was joshua shar fstein from Bloomberg School of Public Health at Johns Hopkins. The Bloomberg School of Public Health is supported by michael bloomberg, the founder and owner of this network. Lets turn to what is going on on wall street. Streetreet wants wall quants channeling data smarts to physical science for the virus. Lets bring in a reporter joining us now. It was interesting because essentially you have people who spend their lives, spend their careers creating these models, working these spreadsheets, trying to come up with ways where they can find out what is going on in markets and how to take advantage. How can they apply that to what is going on in the health world with the coronavirus . Essentially, they are treating the coronavirus like a statistical problem. They are trying to model the. Utbreak in that sense, the mathematical challenge is quite similar to what they encounter at work. One person who is famous for building Machine Learning al goes on wall street, now turning his attention to the lockdown. Scarlet of course, your models are only as good as your data. Some countries are you nippy leading data. Some have accused some countries are manipulating data. Some have accused china of that. S arever model these quant building, it has to be based on imperfect information. Are they incorporating that into their trading strategies . Justina there is definitely some need for humility when it comes to the virus. Australian credit fund. They said their model is probably more simplistic than what a Health Expert will use. But they need one that a fund manager would understand. They built a proprietary model that told them that covid19 cases were likely to peak from the u. S. To europe in april. That is part of the reason why they bought the dip in march. The other reason is the extraordinary monetary and fiscal stimulus. But they did say that the model they built kind of helped them make that decision. Scarlet helped perhaps with the timing then. Justina lee, thank you. Coming up, all of this revolves around the idea of reopening the economy and getting people back to work. This is bloomberg. Time for a look at the latest business flash headlines. General motors taking steps to preserve cash at a time when few people are buying cars. The automaker suspended its Quarterly Dividend payment. Gm has put a Share Buyback program on hold. They have already put 6500 employees on leave. Testing the european banks fourth round of relief. Measures. A series of that is your business flash update. About one ofs talk the main themes of the market. That is all about the return to work. After a month of adjusting to working from home, for some people longer, companies are faced with a new challenge, which is louise returning to the office eventually. A framework taking both economic and health risks into consideration. Dan arbess joins us to discuss this further. It is clear that the opening of the economy will need to be done in phases and it will not be uniform. The bit about how that all starts with testing. Figured that out yet. There are some states that are with opening the economy even without mass testing in place. Where do we start . I have been listening to bloomberg all afternoon today. Listening to the bull market roar. I have to say, this sounds to me like a market that is built on hope. The opus that we are having a v the hope is that we are having a v recovery here. The fact is that we are facing an invisible enemy that we cant to in e dont go that we can see and we dont know, and we are flying blind. Many people exposed to this virus are asymptomatic. In the united states, there have been about 5 Million People tested. The World Health Organization said over the weekend that there is no evidence that once you have had the disease, that you develop successful antibodies that are specific to this disease and that anybody knows how long they last. We are a year away from a vaccine at a minimum. Who knows where we are relative to a qr. Cu everyone relative to a re. Work,ve to return to there is no question that we are alternative here. If you open to early like georgia seems to be doing, you return of the spread of the virus. If you slow down the return to work, you have other problems. That peoplemphasize are anxious to get back to work. So there has to be a balance. Governor cuomo has said that you have to build the bridge. Way that we think about it, and there are a whole group of people who have been involved in developing a framework. Submitted to Governor Cuomo and picked up in Governor Cuomos framework, where we have to think about sequencing the return to the workplace where we start by returning to the workplace people who really need to be there. Means knowledge workers who can work effectively at home, that represents about 34 of the u. S. Workforce, that in turn do about 44 of the production in the economy, can remain at home and stay safe. Contact workers, critical first responders, people responsible for medical care, the food delivery workers, those are heroic contributors to society. They are already back in the workplace and risking their lives for our collective benefits. They also happen to be among the most Vulnerable People to catch the virus. As for the other im sorry, go ahead. Romaine how do we course correct . We know that some of the people out there over still been going to work, that probably should not. The latest news out of the white house, that we will have Something Like 2 of the population will have access to testing. I wonder, is there a way that we to avoide correct now a reemergence of the virus. Was beginning i to describe that. Thank you for taking the opportunity to stop me because i can go on at length. What i was saying is that we should stratify workers. That is the just of the work that we have done, submitted to Governor Cuomo and governor murphy, let knowledge workers continue to stay home as they can do effectively. Inkers that have to be contact with other people need to be prioritized by their importance economically to the economy. Importantly, what i want to take a second, we need to submit to some form of contact monitoring so that we can be notified if we have been in touch coronavirus is pushing the u. S. Food supply chain to its limits. Grocery stores struggling to keep food on their shelves while farmers are dealing with the gut wrenching decision to dispose of animals. Mark allen is president and ceo of the International FoodService Distributors association. Is the tradetion association for the Food Service Distribution industry. Your members transport the food manufacturersnd to endusers. What is the biggest distinction between the supply chain for food service and groceries. Mark thanks for having me. I would say, a couple of distinctions. Customer,ll, the end as you rightly pointed out. We do not deliver to consumers. We deliver to hospitals, hotels, the u. S. Government. I would say second is really the types of products and the packaging those products arrive in. Celll grocery scores consumer use. Bags ofelling 50 pound rice, pound tubs of butter, cases of ground beef. For the chefs at professional kitchens. Those products will generally be transported in packaging that is somewhat nondescript have a barcode, it is not going to have consumer nutritional labeling. That information follows the product in an electronic format. We operate more on an institutional or industrial type environment as opposed to retail grocery, which is focused more on consumers and retail marketing. Romaine i think we are having some audio problems with mark. That was mark allen of the food distributors association, president and ceo. Time with himre lets go to the first word news with mark crumpton. Mark there have now been more than 3 million confirmed cases of the coronavirus around the world. More than 2008000 people have died. Thannited states more 2008000 people have died. Been thed states has hardest hit. In an unprecedented move, new york has canceled its president ial primary. New york will still hold congressional and state level primaries. Voters can now choose to vote with an absentee ballot in the june primaries. Governor andrew cuomo also recently announced that the state is sending mail in ballots to voters. The coronavirus pandemic is pushing supply chains to its limit. Plan shutdowns are leaving americans dangerously close to seeing meet shortages at grocery stores. Outbreaks are forcing the closure of some of the nations biggest slaughterhouses. Producers are left with nowhere to sell their livestock. Tyson estimates that millions of pounds of meat will disappear from the market. Smithfield foods has also warned consumers that they are likely to see me shortages. The British Government has insisted that they will not extend a deadline for a postbrexit deal. Goveet Office Minister igo said to michael gove said to say that it is still entirely possible to make a deal by the deadline. In january but remain within the eus economic and regulatory system until the end of the year. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Romaine we want to bring you some breaking news. This on that Municipal Bond buying program by the u. S. Federal reserve. It is expanding that program to include smaller cities. Billion emergency Lending Program and will now least 500,000 for counties and 250,000 for cities. We will be back in a moment. This is bloomberg. Scarlet lets look at how oil prices have moved on the day. It has been an ugly day so far. We want to keep in mind what is going on overseas. The u. K. Announcing a new micro impactan to offset the on small businesses. Boe governorformer and bloomberg colonist mervyn king. About whether stimulus is needed immediately. I dont think that is an immediate need now. I think basically that treasury and the bank of england has made clear that they will do whatever stimulus is needed. At the moment, stimulus is not needed because they have told us not to go out and spend. They are trying to stop the economy at the moment. The question of stimulus is one for further down the road. The bank of england can take whatever measures they feel appropriate very quickly. Is how toate issue prevent firms and businesses from going bust. The reason we should not prejudge at this stage what businesses will need help further down the road is that it is quite likely that no one will know that there will be a change in the pattern of spending, peoples habits and how they choose to spend their money, whether less on international travel, restaurants, more on doityourself. It would be a big mistake to lock in now for the permanent andre a pattern of spending support offered to companies that would guarantee them a longterm future. We have suspended the operations of a market economy. Suspendfore should operations in the shortterm so we get to a point that we allow markets to function again and then we will determine when which businesses survive and which dont. We had the cbills initiative, the corona scheme. Do you see design flaws either from criteria or eligibility for distribution . I think the big problem has been logistics. I am sure it is possible to design a better scheme and in many more weeks, i am sure the treasury could have done so. It is a pretty good scheme. It breaks the logjam of banks being cautious of extending the loans. Going through the banking system, which looked like the insible way to do it, has fact meant either to push other businesses to other loan schemes, personal guarantees, concerned that the banks themselves would still be bearing the losses. Tohink the government needs get a grip on this and find a way through it. Things are improving, clearly, from the unfortunate slow start, but i think they will still need to do more. I think the other way of approaching it would be to say that other businesses that were viable last year paid taxes to the revenue, whether it was valueadded tax. We could have considered reversing those taxes, that is allowing the revenue to repay those tax payments in the form of a loan. A purelytage, it is logistical issue. Romaine you were just listening to the former bank of england governor mervyn king. The big story of the day is what we saw happen in the oil market and specifically with the uso etf selling out of the most active wti nymex futures contract, that june contract, and spreading its money from july 2020 all the way to june 2021. Here with more, kathryn i catherine nye. What is the effect to have a major etf like this spread out its money across all of these different contracts rather than being concentrated in that front month contract like it used to be . This is really interesting. It is the fifth time in the last two weeks that they have decided they wanted to push it forward. Veryas built up it is a popular product among Retail Investors looking for a bottom. A lot of retail interests have picked up to the point where they own at one point a little bit more than a quarter of all outstanding contracts. Whatever they did has an outsized impact on the markets. Weeks, they two have been slowly, given a lot of regulatory please hang up. Scarlet i think we had a complication. Is catherine still there . No, she is not. In this day and age, when phone calls get dropped, we have to roll with it. It is too bad we cannot continue that, but fascinating. A couple of other etfs have done the same thing. Etf has shifted its holdings. These supposedly passive products are actually becoming more discretionary and more like active products in a way. Romaine it is becoming not only more discretionary but somebody last week said it is basically at this point. This change really came at the behest of its broker saying, you cant keep yourself exposed to these contracts right now. The uso in fairness did say this would be temporary, so they could not provide a date to when they would revert back to what they normally expected of a fund. Scarlet there is no operating as normal right now in the oil futures market. Talk about what is coming up. Joe weisenthal will be joining us. He will discuss cyclical optimism. Are we seeing any signs of that . Later on this week, the fed and ecp meet as well. Ecb meet as well. This is bloomberg. Scarlet the coronavirus pandemic is leaving millions without jobs and struggling to keep up with loans. Thepoke exclusively with discover Financial Services ceo. Take a listen. I think there will be hopefully a relatively shortterm disruption. If we think about the programs out there for our customers, we are modeling those on the type of relief after a natural disaster. I think there is a high risk of , more traditional recession sort of going well beyond travel, retail, restaurants, the sectors hit hardest now, and a relatively longer recovery. Expectations made for these provisions had to factor in 9 unemployment. Thathat things are looking they are getting higher than that, what does that mean for credit losses moving forward . We calculate provision at the end of the quarter. We will do that at the end of the next quarter based on the economy. We have a lot of capital and a lot of liquidity. So we are ready to support our customers through this. You would bened cutting about 400 million in expenses without cutting in the short term. Roger the majority are coming from marketing. We are going after every dollar spent in a disciplined way, looking at vendors, looking at , making sure we do not have any layoffs in regards to the covid crisis. When you look at expenditures, we all got so used to the rewards that Credit Card Companies had given us across the industry. You hinted that some of those things might be waning. Our rewards going to be a thing of the past . Is designedrogram to be sustainable. We are featuring 5 rewards on restaurants. I think some of the frequent flyer programs will struggle a little bit. We have no plans to make any reward programs. How do you expect to gain shares . Is m a potentially part of the strategy as valuations are lower . Roger particularly in the payments business. We own the thirdlargest payment network. That could be a way to grow discover. I think it is important to make sure that you are not just defensive but also looking at opportunities that will come up. How big of an acquisition would discover be able to do . Roger we have enough capital to support all levels of acquisitions. We tend to do acquisitions on the smaller side. A lot of these emerging Payments Companies are in fact a smaller compared to discover. Would you consider a sale . Roger we feel very good about the mix of assets that we have. A very balanced is this model and unique collection of assets and payments. I am happy with the business mix we have right now. Last couple of months, 450,000 people skipping payments. What number do you think that looks like in the next couple of months . That thee good news is peak in roman for us was in march. We have seen customers enrolling in programs come down since then. It is going to come back to how quickly can people get back to work and i also think how much the unparalleled stimulus programs support the average consumer. Romaine we were just listening to the ceo of discover Financial Services. Joining us on bloomberg television, he normally joins us but i guess he is afraid to get more than six feet from us. Joe weisenthal, camped out on his ranch in texas. It has been a positive day in the market, a pretty positive day last friday as well. This seems to be a market that at least seems to be optimistic about the prospects of some of the market reopening. Green, wenly was it have seen a lot of gains lately. ,inancials, real estate industrials, energy. Ofs is sort of that class cyclical bounce. It is not one of these gains that we have seen many of which was basically just like a gain for amazon and a few other safety companies. This looks more like real optimism in the market. Today. Tle up nearly 4 again, not one of these halfhearted bounces. Scarlet we will see whether the market can keep this up, especially after alphabet reports tomorrow and apple reports later this week. I know you have been keeping an eye on how frequently we ignore in headlines and take solace better headlines. One headline, when Mitch Mcconnell suggested that states should declare bankruptcy if they cannot meet funding needs. He is now trying to clarify that. He had a lot of pushback. He went on a conservative talk radio show, said we are not going to bailout illinois pensions or Something Like that. There was a lot of politics in his comments. Get aeing said, he did lot of pushback. Today, he clarified that he does expect that at some point there will be another bill. Is going to be all of the states. This is not just going to be illinois, new york, new jersey. Cities and states including mcconnells hometown and home state are in serious financial trouble. Romaine those comments were certainly perplexing given the state of kentuckys five finances. Boeing saying they will resume on a87 in South Carolina third and may 4, which i believe is next week. That is a major operation that they have down there. I guess this is an encouraging sign that a company like boeing thinks it has enough capacity and enough safety to get things going. Expected to already be a big week for openings. Now we see some of these big manufacturers announce that they are going to start opening some of their operations in South Carolina. Forward,be two steps one and a half steps back. But, they feel that perhaps there is the demand and the capacity to Start Building things once again. It is going to be slow going. Governments, businesses try to restart activity without spikes in that curve again. I guess it makes sense given that South Carolina is one of the states moving faster than others trying to reopen the economy. We have the fed and ecb. Do you expect any fireworks . Joe i dont think so. Ecbe could be stuff on the side in terms of some of these bonds. It seems like the fed has kind of done its thing. It will be extremely interesting to hear from them. Scarlet it will be a Virtual Press conference from jay powell. Thank you for calling in. That does it for whatd you miss . Have a great evening. This is bloomberg. Emily welcome to bloomberg technology. Markets ending the day up, though oil seeing big declines as we await a slew of corporate earnings this week, from amazon to apple to alphabet. The whitending by for house briefing which was initially canceled. Now it is back on