On every 19th. On february 19. Take a look at the banking sector, take a look at the mining sector, take a look at what is happening with the oil sector. These sectors are down by circa 30 since those highs were hit. Brent crude bouncing back today, up by nearly 8 , after saudi makes it very clear they intend to pump a lot of oil during the month of april. This Oil Price War is not going to go away in a hurry. The german 10 year yield, we are selling off today. We are 10 basis points higher. In italy, 12 basis points lower. The spread tightening up a little bit, but nevertheless, italy has been on offer for the last couple of days. Maybe some fiscal action helping the story out a little bit. Nevertheless, we have a big call between eu leaders. We will have to wait and see. Vonnie we will get all of that later today, but for todays market action, what we are looking at right now, we are joined by nancy davis, Quadratic Capital Management cio. Also joining us, our market live editor this morning. Quadratic Capital Management cio, but also the hedge portfolio manager. How do you operate in an environment like this, where we saw yesterday the biggest plunge that we have seen at least since the 2008 crisis, and today a dead cat bounce . Nancy i think the word yesterday was contagion. The question was whether Central Banks cutting rates or doing more quantitative easing could calm the markets down because this time it is really different. And not aalth issue liquidity issue or market issue. All i think high but theositioned well, 10 year mix me really sad people are rushing into the 10 year as a safe haven. With fiscal potentially on the horizon, the 10 year hit 32 basis points at the low. We had 150 basis points of yields falling just in 2020. It is really important for investors not to panic, not to rush into something they consider a safe haven because the 10 year may or may not be a safe haven depending on how things develop. Andy, yesterday some said this is not the end of the losses, specifically talking about it waterfall before we see the end of the market rout. What is the consensus right now on the stocks . Andy at the moment, you are seeing a bit of bidding here. You generally see a bounce back on the next day, and that is part of foot we are seeing here. Things get oversold, things get sold out, throwing the baby out with the bathwater. We have seen technically that several times that you should perhaps it be nibbling in equities, and if not that, then at least covering your shorts. Yesterday, the total putcall ratio rose to its highest level ever, and that has been around since the 1990s. Clearly, people were taking some shelter. The feeling here is probably one of confusion and wait and see, but markets move faster than you can wait and see sometimes, and certainly somebody is out here buying because they have to or because they want to. Lets talk about the policy response people are now anticipating. How high is the bar that trump have tor authorities clear to get the market back on board . It has to be substantive. Andy i would totally agree. We are still waiting for shock and awe. Shock the eu leaders are meeting. My colleague paul dobson wrote a very nice blog post this morning themliv detailing some of steps being considered around the world in the last 18 to 24 hours, but frankly, none of those things are shock and awe. It would be high time for someone to do that, and i was a little disappointed when i saw the comments out of germany the last hour. It looked like once again, the germans were not quite ready to help with something that would equate to shock and awe. Guy the president tweeting about the lack of action, and his mind, from the fed. A lot of people are now saying that this has to come from the fiscal authorities, that any action needs to be driven by government. What does shock and all look like for you . What do you want to see . Nancy the challenge is that all rates are not equal. Movingt see the 10 year lower in yield terms, higher in prices. It is actually freaking out the market more. So many models are driven off of risk parity, where when 10year yields fall, they going to say haven assets. The lower 10 year goes, the more panic there will be in the stock market. The challenge here is not moving Interest Rates lower. The fed has already cut once, and we need to steepen the yield curve to normalize the panic happening in the markets because the treasury yield curve is massively inverted right now. If you think about what that means, it means somebody is willing to lend money lower and lock in a loss, and that is financial armageddon for the making system because our entire Banking System relies on funding shortterm and lending long term. The inverted yield curve is what the fed should really be focused on, and i think they should do a reverse operation twist. Operation twist was brought out in the greek crisis in 2012, when europe was going into crisis. The fed bought long dated treasuries and sold front dated, and that flattens the yield curve. Thats what we needed at the time because policy rates were at a very different level. Now we have clearly seen nobody cares if the fed is cutting rates. The market is already pricing in rate cuts in the next two months that are really dramatic. It doesnt move the needle. What they need to do is actually a reverse twist and sell 10 year bonds. They are already buying tbills, but selling 10 year bonds actually would calm the equity markets and stop the panic because it would bring the 10 rate bynsider the free these models, so when you have the 10 year normalize and stop screaming, right now screaming risk off, i think that would stabilize things. It is a very contrarian view, but i think Interest Rates are not all equal, and policy rates are at the front end, but the 10 year is what risk models go off of. Vonnie if we get some troubledies or some industries, does the government mail them out . Does the government bail them out . Andy i would hope. Perhaps they should create some standing lending facility, something that floats companies through. Bankruptcies need to happen. It needs to wash out. Whether you are a Small Business or mediumsized business or something as big as united airlines, sometimes you need a helping hand, and banks might not be in the position to offer that because it is not in their business model. Theraoh government federal government could come up with a plan to do that. Vonnie our thanks to both of davis, quadratic capital cio, and bloombergs andy cinko in princeton. Heres viviana hurtado. Viviana President Trump promising to unveil details of an economic package today. Newe is concern that the coronavirus could cause a recession. Among the proposals being discussed are a payroll tax cut and a shortterm expense and of paid sick leave. Now to italy. The country will become the first nation in the world to attempt a nationwide lock down. It is trying to stop the spread of the coronavirus in europes fourthlargest economy and looking for ways to mitigate the economic damage. Italys government may try to boost a stimulus package. We end with some of the worlds biggest banks protecting the European Central bank will cut Interest Rates on thursday. Jp morgan and deutsches joining hsbc and forecasting reductions. This would be the first big policy decision for the ecb president christine lagarde. 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. Guy thank you very much, indeed. Coming up, keep an eye on what is happening in the bond market. Treasuries, we are seeing a little bit of selling today. Took a look at what is happening in the bdp market. Btps are catching a bid today. Thats thepicture, curve. As you can see, the only green in italy. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Lets find out what is going on with Abigail Doolittle. Abigail we have a bit of a rebound rally on our hands around the world. The s p 500 and the nasdaq buzz up about 3. 5 or more after climbing to 4 on the open, but giving back some of the gains. Some of the bulls are still trying to take charge after yesterdays stock market plunge, the worst day since 2008. We have strength in europe, too. A big piece of this is the fact that we have oil on the rebound, up about 9 . You can see crude oil are around 34 a barrel. Over the last two days, we have the s p 500 lower. Lots of volatility here for the s p 500 between yesterdays huge selloff in todays rebound rally. We are still down 4 . Is it a real deal rally or a dead cat bounce . Supporting the fact that stocks are higher, we have bonds lower. It is very hard for investors to buy stocks if you have bonds in rally mode. Also have the yen dropping on the day against the dollar after having a really epic rally. Gold is off as well, so investors out of havens, into stocks. The best stocks in the u. S. , a lot of focus on the airlines and the cruise lines, but take a look at this. Apple and microsoft of the biggest point boost for the s p 500. Apache up 15 . Yesterday, apache in a single day down 54 in something with crude oil. Exploration and Shale Companies really getting decimated yesterday, but a bit of a rebound today. Guy thank you very much, indeed. Coronavirus cases worldwide now north of 130,000, with italy being the First Company to attempt a nationwide lockdown. The Italian Government may try to boost a stimulus package. Meanwhile, President Trump is promising very dramatic actions. Bloombergs u. S. Economy managing editor Peggy Collins joins us now on the president s fiscal options. First up, lets talk a little bit about timing. There was expectation that maybe we get a package announced today. What is the delay . Are expected to potentially hear from the president this afternoon, so we are on the lookout. As you mentioned, he floated last night with his team the possibility of a payroll tax cut or extended page six leave extended paid sick leave. There are multiple options on the table, some of which they would need congress for, and others they would do through executive order. A you said, it is patchwork of ideas that may take a bit to roll out as opposed to a big package of economic stimulus all at once. Vonnie would anybody dare not support any of these measures, including obviously numbers of his own party . Peggy certainly, theres always questions amongst lawmakers about how much things will cost in terms of adding to spending and deficit, but at this point, because it is related to a Public Health crisis, i think everyone is really looking for a united front in terms of solving it. We are even seeing on the monetary side calls for coordinated Monetary Policy action as well as fiscal, and terms of governments around the world taking action. Guy delta and american talking about the fact that they are no longer able to be able to offer guidance at this point. Is the Airline Sector likely to be included . Ouri reporting reporting by our colleagues was showing that there might not be specific outreach to the Industries Like airlines, hotels, even cruise lines. It is certainly something the administration is aware of and talking about, but we are not sure if that will specifically be talked about today. Every kudlow talked about them looking at some help for specific industries, but our reporting so far is that may not be in what gets rolled out later today. Vonnie of course, lots of countries around the world are also planning some kind of fiscal stimulus. Our economists saying it would be enough to combat any followup from this coronavirus . Peggy economists have been looking for this kind of coordinated action to really assure markets and governments and Central Banks are doing all they can do this to stem this crisis. Cash toabout getting businesses that may be under a crunch, and also that Health Experts are working with governments to create treatments or any type of prevention that can stem the spread of the virus. Markets in particular are looking for assurances that there are lots of plans in place that could be triggered to increase liquidity in the markets if it is needed. Vonnie Peggy Collins, our thanks to you, joining us there from washington, d. C. Lets get a quick check of the havens. As you can see, the 10 year yields up 11 points from where we were yesterday. 104. 08 for the again right now. This bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. A bit of breaking news out of brussels. Ursula von der leyen, president of the european commission, confirming that on a temporary basis, the eu will ease slight use rules. These are rules that mean that if you dont use a slot out of an airport, you lose it. The airlines that i have been talking to have been clamoring for this. It now looks as if they are going to get it. We are waiting to see if we will see further relief for the airlines. We are also trying to figure out if the u. S. Is going to include the Airline Sector within its package of measures coming out. For more on this, George Ferguson joining us from princeton come apart of our Bloomberg Intelligence team. In terms of the slot rule, how important is that that the European Union has done that for carriers . George i think it is extremely important. You have to operate those slots 70 , 80 of the time. I dont of the number exactly, time, theof the constituent airlines and all , that is part of their competitive advantage. Inclinedhey would be to try to operate in those spots to make sure they dont use them. With demand falling off so badly in these Airlines Cutting , they have really struggled to continue to operate in those slots, and i dont even say maintain profitability. Delta and american are the latest to cut back on flights, and capacity through the summer. This is a cascade of airlines announcing these measures. Do we see bankruptcies out of this . George not yet. Even we are right now is the European AirlineBalance Sheets are in pretty good shape. All of these airlines have had some very good years of profitability and cash generation. I think everything here is a function of how long we think the coronavirus effects are going to last. Bit to see southwest a southwest and american last week. The discussions were about how much demand is dropping off. If coronavirus clears up in the next couple of months, if it is a typical virus, which we dont know, it clears up in april and may and we get a decent flying season, these airlines wont bleed too much cash. If it pushes through into the summer, i think weve got more challenges on our hands. Hayes of jetblue also speaking in the last couple of minutes. Very comfortable with the Balance Sheet, very comfortable with the margins. The Leadership Team is going to take a temporary pay cut during the crisis, robin is indicating, and the airline is better able to withstand the crisis then in previously was. , assolid are Balance Sheets you referenced what would happen as it goes on a little bit longer . And whos got the weakest . George i guess it is always a function of how bad the bleeding is. Airlines are already cutting capacity and trying to stem some of the cash bleeding here. Our gas, and we dont know how bad the bleeding is yet, but our guess is theyve got a couple of quarters at least. A lot of these airlines have 10 of annual revenues on their Balance Sheet in cash or more, which is quite solid. Vonnie George Ferguson with Bloomberg Intelligence, always keeping us uptodate on the airline industry, thank you for that. We have a headline here. Royal caribbean may be cut to junk by s p on the impact of the virus. That is one of the cruise companies, royal caribbean, perhaps getting cut to junk by s p on the back of the virus. Lets check on our dead cat bounce for today. We have industries higher we have indices higher, by 3 to 3. 5 apiece. This is bloomberg. Guy live from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. Lets get back to the markets. Joining us from newport beach, california is nick maroutsos, cohead of global bonds at januss henderson at henderson. What is the market looking for from the Federal Reserve at next weeks meeting . Nick i think they are definitely going to cut. It seems like ages ago they cut by 50 basis points. While Monetary Policy is not effective per se, it is going to ease financial positions. Our view is that either the fed really needs to go big ended up that stance because they dont golly have much more room to , i think it will help significantly. Our view is they are going to end up probably cutting in the future as we move on in 2020 or is this virus potentially intensifies, so they may just cut rates from here. Vonnie i am not sure they would see it so black and white, right . What if we get some kind of physical package this evening . Will that lessen the need for monetary stimulus . Nick our view has always been the fed needs to ease policy rates. This is aside from the virus altogether. There are structural issues with the economy. We are in the late stages of this growth situation. They were always going to be cutting Interest Rates. The virus was a catalyst for that and has forced them to move rates lower. We are aware there is a fiscal package on the table. Certainly, fiscal policy has a much greater impact. I think they can spend to contain the crisis. Up can pay for tests, stack health centers, maybe provide s