Eight days, getting a little bit of relief. Euro still seeing very strong buying in the treasury markets. You are buying equities, buying commodities, and buying treasuries. Thats what you are seeing into the weekend. Time now for global exchange, where we bring you todays market moving news from around the world, from washington to new york to london. Oil. Gin with the move and crude continuing to climb after its biggest ever single day gain. All trump says he may intervene in the price war between saudi arabia and russia that has rocked crude markets. Here was more is annmarie hordern. Intervene how, and does anyone care . Annmarie it is interesting how exactly he would do this. He said he has some power over the situation, and would get involved at the appropriate time, may be giving riyadh some chance to potentially swamp the world with oil and put the pressure on russia. Then we heard from president Vladimir Putin in an incredible scoop by our moscow bureau. He says they say he is calling what the saudis are doingblack male are blackmail. This plays into the strong persona. One commissioner mentioned potentially texas cutting production. I dont think they are going to do it unless the saudis and russians get on board as well. Alix lets go to washington, where congress and the white house are working to agree on a stimulus package that would help workers, corporations, and small businesses. Joining me from d. C. Is kevin cirilli. What do we know about the bill . Ok, we are going to get back to kevin. We are having some connectivity issues. We are going to go to Michael Mckee. We are going to do a lot of Different Things as we sort everything out on a technical level. A lot of what we have seen over the last few days has to do with centralbank action. What we learned over the last 24 hours . Michael we know that Monetary Policy, if you are making it at midnight, it is a sign of how seriously Central Banks are taking the whole crisis. As the week draws to an end, a record 31 have slashed Interest Rates, and many have called up the crisis playbook. They are buying bonds, and treating buying bonds, intervening in currency markets, setting up lending programs. They set us up for a rebound if and when, someday. Christine lagarde and her ecb colleagues unveiled a 750 billion euro bond buying package , and vowed no limits in their efforts to defend the euro. In london, the bank of england cut its benchmark rate to a record low, and said it would u. K. 00 billion pounds of government bonds. In under a week, the fed has cut its key Interest Rate i more than 100 basis points to near zero, including a near midnight resurrection of a Financing Facility for primary dealers. Policymakers have also set up a string of other programs that make the Major Players in the markets for government bonds, merge back government bonds, mortgagebacked securities, government papers, and mutual funds. Maybe those efforts are having some effect in unclogging the pipes of global finance. Maybe they could set us up for a rebound when this is all over. The problem is nothing they have done so far is having any effect on the virus itself. It is not a vaccine. Alix thank, bloombergs michael thank you very much, bloombergs Michael Mckee. Extra volatility today. It is quadruple witching. Burger joins us. How much worse can it get today . Dani as if markets need another thing to worry about, it certainly could get worse. When you look at the sheer number of options and futures set to expire, a record amount of open interest currently sits on options tied to the s p 500. Of those are set to expire, which would be 1. 5 trillion dollars worth of options. The reason this makes volumes higher in volatility higher, as we get these big swings in markets we have been seeing recently, all of a sudden, an option that was set to expire today could go from profitable to unprofitable. You have these traders either trying to hedge their positions, buying stocks, selling stocks. It could set us up for a volatile day. Coming into the market, however, it does seem a little more calm then we have seen in recent days. Again, the bar is set very high in terms of volatility. This is just markets saying the Central Banks have had a soothing effect on markets, at least for now. You have to remember, we were seeing a big rally last friday, and that obviously did not last. Market watchers are waiting before they declare the all clear, especially as we start to see some of the effects ripple into the real economy. The question now is just how much have markets priced in the damage . Are we going to see a rally from here . If a lot of options are closed out, it could mean that volatility comes down. That is certainly something we will be looking for today. Alix thank you very much. We do want to go to washington, where congress and the white house are working on that stimulus package. Kevin cirilli now with us from d. C. What do we know . Kevin Senate Majority leader Mitch Mcconnell introducing the republican version of the economic stimulus bill, and i am hearing from sources that that means all republicans, or a majority, will get on board for this. Hes also been reaching across the aisle to not only Senate Minority leader chuck schumer, but democrats in the house, led by pelosi, working with the administration on this. The president has said he wants to inject liquidity and at least 1000 to most americans by the first week of april to provide some muchneeded economic relief, and then another round mid april. A lot of moving parts, but based upon my reporting, there will be no significant Political Risk to this not getting passed. Democrats would like to see increases in funding levels, but over the next several days, i think this is definitely going to end up getting passed. Alix thank you for joining us from d. C. One other thing i am watching today, you have mass shut of schools and businesses starting to take a real bite from electricity demand in the biggest u. S. Power markets. On the grade from illinois to new jersey came in 5 lower than forecasted. It is likely only to be getting. In china, Electricity Generation fell the most on record in january and february. And thingsre coal like nuclear. You really cant store natural gas, wind, and solar in the same way, so it will cause a lot of disruptions for agilitys moving into the likes of alternative energy for utilities moving into the likes of alternative energy. Coming up, more on todays markets in todays first take. This is bloomberg. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and insiders, Michael Mckee, Damian Sassower, and mike mcglone. We made it to friday. Damian, what are you watching today . Whats on your radar . Damian its finally time to say that because currency that cross currency bases are coming in. That is a good sign. Days,20 of the last 21 youve seen Investment Grade u. S. Corporate spreads widen. We are 3. 5 times wider than we were at the beginning of the month. So im still focused on spreads. Obviously, the fundamental backdrop of a lot of these companies have shifted due to covid, but we need to see currency evolve come down in order currency vol come down in order for spreads to react. Alix how would you be thinking about taking on risk or not . Mike last friday, the stockmarket was up about 9 . Knows this virus information is going to get worse. Maybe it peaks with the california shutdown. As the crude oil bottom is, 20 as the alltime high volume price for crude oil futures. The problem is it bounced way too fast. It is probably going to trade in a range come about my Bearish Crude Oil bias is really over. I am going to look back at this week, weve probably had good buying opportunity in u. S. Bonds near 2 . That is pretty good yield resistance. Then a look at the quasis. Gold and bitcoin are very close to being unchanged on the year, despite the dollar being up a percent. The difference up 8 . The difference between those is those have had their reset. Mckee, is fiscal going to save us this weekend . Michael good questions. There are plans in washington. They have to Work Together to try to merge separate ideas of what to do. Then figure out, how is this going to work we want to give cash to people, we want to give loans to small businesses, but how does that actually function . In 2008 when they sent out checks to people, they also did a lot of Electronic Fund transfers. It took about two months to get that money out the door. By that time, this could all be over. Maybe that is the time you want to see the money start to hit the economy, there are going to be plenty of people who say i dont have enough money to get through the next two weeks, let alone two months. Alix does that wind up alleviating some of the upward pressure we have seen on the dollar . Some people are talking about how california shuts down, that is going to be bearish for the dollar. What you think what do you think . Damian all of the commodity currencies, they are all up today. Certainly the high beta currencies are behaving well this morning. About thistalking all. With seven trading days left in the month of march, what i am looking at is last year, the Global Hedge Fund index was up 8. 9 . Weve given it all back this year already. So it is quite scary, with seven trading days left, in order to prevent a lot of these redemptions coming in. In 2008, you had hedge funds down. That meant a lot of redemptions and selling pressure, and that can extend into the summer if we dont see a lot of these managers start to perform well. Alix how much more selling is there left to do . Damian just look at all of the middle east sovereign wealth funds. A lot of them are big investors. Youve got to believe that with oil prices at 20, 25 a barrel, they are going to be giving into some of their excess cash in order to bridge the funding gap. I wouldnt be surprised if you are seeing some redemption pressures and selling pressure on the other side of this. His got guys like bridgewater, millennium youve got guys like bridgewater, millennium that are certainly up in the air. Alix if we have gold find a base, does that mean sovereign wealth funds are recovering a little bit . Mike this is the level from gold to really recover. It got down maybe 3 on the year, and one thing worth mentioning in the dollar, the last time we had the broad dollar up more than 8 on the year was 2008, and that launched the market. Thats what i see happening. Of course, we know with the world needs to do. It needs to flush the system with cash. Theres no more Interest Rate on your savings account, so gold in that environment virtually has to appreciate. Ian one of the most michael one of the most interesting thing is the fed is trying to flood with cash. They keep raising the amount of bonds they are going to buy every day. They are now at 107 billion for today, a record. Are we seeing that cash get into the markets . The feds goal has been to make it so that you can trade, not necessarily that you will trade higher. Is that working . Damian i will let you know when the check arrives in new york because i havent seen it yet. Im just kidding, but truthfully, 2400 per couple, 1200 per individual, checks will be mailed out before the end of this month, i think you are absolutely right. Banks are not into remediating the way they once were. The fund little shift for a lot of the borrowers has changed. So maybe it makes sense to start direct lending to those who need it most. Mike mcglone, a question for you. You mentioned the fact that we are maybe seeing some bottoms coming in. I look back at what happened was equities into thousand eight. They didnt bottom until june 2009, and that is when the recovery started. But the drop has been so fast this time. Are we going to get a quick recovery, or are we decoupled from what is happening in the economy . The move has been so swift in prices. Damian thats the big mike thats the big question. I think everything will depend on when the stock market bottoms. The russell, the smallcap index, has returned to the halfway mark of the big bull market. It is basically at the mean median mode of the last 10 years. The big problem i have is people are measuring it from the peak, which was only a month ago. Youve got to look on a 52 week basis. Is still just a correction. You go down from a 52 week basis at least 30 to 40 , and you stay there a while. This event is pretty much worthy of that. Alix the other part that is not confirming what we are seeing in the ackley market, just the equity market, just to pick the other side of that, is what is happening in equity spreads. Are we going to see even more . We saw so much money come out of ig and go into money market funds. Damian you are absolutely right. Just this month alone, i think we saw a roughly 500 billion dollars go into government money markets, 100 billion come out. You are absolutely right. The fact is with credit, it is an illiquid asset class. It is not just going to snap back, especially with markets behaving dysfunctional he. You20 of the less 21 days, have seen ig spreads widen by 3. 3 times what they were in midfebruary. That is a huge move for what is largely regarded as a relatively safe asset class. I am very focused on spreads. I think weve come a long way in a short order of time. Look at equities. Definitely some room for equities to bounce back here, assuming volatility comes off and markets normalize a bit. Alix guys, really appreciate it. Good luck this weekend. Its been a long week for everybody. Thanks a lot. It reminder, any charts we use throughout the show, go to gtv on your terminal. Browse the features, safety charts. Gtv. This is bloomberg. Turn now to wall street beat to cover three things wall street is buzzing about this morning. Today we are looking at hedge funds. Joining me is sonali basak. Help me. Sonali winners and losers are coming out in pure form. Some people have done very well. Whoan howard, louis bacon, is returning some money to investors. Accra funds have been able to hold up. As we know, bridgewater is one of those that really hadnt through the middle of march. Those who took a more bearish view, no surprise, have done well. Then theres equity longshort. They have had a decline, but some people are really benefiting from betting against stocks that have been really ridden by the coronavirus, so that is a more morbid way to look at this, but really, people are gaining a lot in this market as well. Alix ive read a lot about how risk parody funds in the ityeveraging risk par funds and the deleveraging effort are tied together. Sonali we are really seeing now that the Hedge Fund Industry was very highly leveraged. Theres some risk parody strategies that are having to deliver, and these basis trading strategies that are also really burned because they depended on cost of financing to stay low. 50 times leverage is what we heard in some of these cases. Is question moving forward, the Banking Industry and regulators going to take a look at the Banking System . Alix interesting. To pivot off of that, is that done now . Sonali no. They have been starting to really depended on this leverage to keep on going. Once weaker rates a lot of the fed actions have taken hold, they were able to put some of these trades back on, and you even see some people raising money in these markets. A lot of the fed actions everly helped people keep some of these trades going. So youre not seeing massive deleveraging, but we are seeing some. Alix have we seen funds close . Sonali we are starting to see some funds give back money to investors. There was energy focus fund, for example. Theres carnage in all parts of the markets now, so where do you make money . If you are a smaller fund, you might have a harder time making sure that your bank stays on your side, that youre not getting those margin calls, and that you are able to keep that access to financing. Alix are banks pushing back . Sonali they certainly are. Those margin calls are happening. For some of these funds, they get financing in different ways. Money market funds were a big source of financing for a lot of these hedge funds. Obviously, we saw a lot of pressure in that market. So access to financing from the money market funds might be a little tougher. Alix hopefully the fed is going to help clear that a bit if they provide liquidity for the money markets. Banks have this open line of credit with companies, and High Net Worth individuals, and also hedge funds. How does that work . Sonali wealthy individuals are also certainly getting margin calls. That has become a huge business in recent years, these margin loans. When everything was good, there was not a lot of risk with these trades. While individuals are getting margin calls, private equity firms are getting margin calls also. They have taken out loans confirmed. Ir states but are you sitting here and looking to lend to the hedge funds and institutional investors, or do you need to take care of those companies that really need it . Alix its a really good point. Appreciate that so much, bloombergs sonali basak. Coming up, ian harnett of absolute Strategy Research says the selloff will come in multiple phases. Hes been really is a mystic on the market and bearish for a while. Really pessimistic on the market and bearish for a while. That has paid off after a very turbulent week for equities, the dollar, as well as treasuries. This is bloomberg. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Alix this is bloomberg daybreak. In the market, it has been a brutal, unbelievable week, no matter what i set class you are looking at. Its been the best day in years for a lot of markets. Nasdaq futures up by 3 . Yesterday you saw some of the things outperforming it some of the faangs outperform again. Europe outperforming as well. Switching of the board, a lot of interesting things happening. The dollar sliding the most since 2016. Coming off that high, although we are definitely off the lows of the session. Take a look at the u. S. 10 year, right at 1 . Still some safe haven buying within the treasury markets. Buying stocks, buying equities, and buying treasuries. The vix coming down. It is quadruple witching, so watch for more volatility around the open and the close. Crude having its best day ever, and we are building on that, and case we see any supply management out of the u. S. For more on the markets, we are joined by ian harnett, absolute Strategy Research chief investment strategist. How do you know if the bad news is priced in, if you can look at finding a bottom . Ian i think clearly, one of the things we were talking about earlier in the week is that markets would try to find a technical base. Around the 2016 valuations, i think we are seeing some of that in some of these markets. Remember, weve had some stocks down 80 now from their threeyear highs. Some of the stocks in the cruising space and some of the Energy Stocks. People are definitely bargainhunting, looking for the double blessed type stocks. The double bust type stocks. Alix are you doing that . Ian weve reduced our underweight temporarily to get that bounce, but we are still very worried. We are structurally cautious. We think theres more risk to come. We think some of the Economic Data youre going to have a neck see weeks out of the euro zone is going to be you are going to have over the next few weeks out of the euro zone is going to be very bad. Claims next week we think are going to be well over one million. We seen some estimates even higher than that. In the past, when you have seen initial claims like that, that has followed through to the Unemployment Rate, and we believe the relationship between unemployment and equities versus bonds is very strong. If that carries on, we think it is going to have another deep leg down here. Alix no doubt, we are seeing bank after Bank Downgrade their Second Quarter forecast. Active america the latest to see a 12 drop in u. S. Growth in the Second Quarter. When you are taking a look at how quickly the data is going to deteriorate, what kind of fiscal impulse can help offset that . Ian i think the question is how large is it going to be. The problem we are looking at, you got to stabilize the oil price, as well as doing the fiscal input, as well as stabilizing the credit market. Theres a lot of things that have got to be stabilized here, but certainly the circa 1 trillion measure going straight to the consumer looks as though it is going to be done. I think you have to see probably a 1 trillion support for the corporate sector. The easiest way would be for the governments around the world to get together and just say we are going to have a moratorium on tax payments by the household sector and the corporate sector, and that for about six months. But it would be 15 of gdp to do that. Im not sure at the moment these loan structures being talked about are going to be enough to offset that shortterm stock. It is a heart attack for the Global Economy. Alix theres also paying back. That is a whole other issue. Some of the staggering stats i want to get your take on, Investment Grade funds seeing as much as 35 billion about flows in a week. Investors pulling a record 12 billion out of muni funds. Do we need the fed to be able to step in and buy munis and Corporate Credit to be able to offset this outflow . Ian yes, but ironically, it is the fed through holding Interest Rates so low that has led them to the growth in these kind of markets over the last few years. One of the things that have been for sized declines is the risk of fallen angels coming out of the Investment Grade space, from bbb being downgraded to Investment Grade. We have been talking about a doubling of the size of the highyield market because of that. We talking about a are talking about 1. 3 trillion dollars, 1. 5 trillion. You are going to have to see Central Banks coming in. Euroust the fed, but the zone institutions own a lot of this u. S. Paper. Just like the subprime situation. We keep reminding people, this is just subprime goes corporate. Japan and europe are exposed to this. We still have this dollar shock as well. The active dollars in the Global Economy is key as well. Alix theres lots of areas for that. We have quite it we have credit, equities, the dollar, and you brought up oil. How can we tell when the dollar has peaked and the oil has bottomed . Ian clearly, there needs to be more cohesion. That is a consistent theme that we are saying to clients. More cohesion on the fiscal side , more cohesion on the oil side. We are seeing cohesion on the central bank side around the dollar swap lines, but youve got to see that dollar significantly lower. I dont think the moves we have seen today certainly help, but to really at risk coming back into these markets, we believe you got to see the dollar 10 lower, allowing trades and goods prices to rise. That is not going to help back above the type of fiscal breakevens that euro seeing in even the lowest oilproducing economies. On the dollar index is probably not going to cut it. Ian, stick around. Gold is looking at the first weekly loss since september. Rhind,g with more is will graniteshares ceo. This is going to confuse a lot of people. Why dont we see gold rallying . It is the safe haven. Such extremead losses that have accumulated so quickly, that investors have been calling for margin calls and other types of liquidations, redemptions, and in times like this, it is not what investors want to sell, but what they can sell. Obviously, goal is one of the most high quality assets out there still trading at a good price, at a high price relative to where it has been the last few weeks. So it is all about the deleveraging environment. It is exactly what we saw in 2008. Once we get through this, we will see oil prices higher. Alix theres also speculation that maybe saudi arabia had to sell some of its reserves, may be russia, to offset the oil price. You get a read that Central Banks are selling from Gold Holdings right now, or no . Will i havent heard that. Ive heard the rumor, but i havent seen any evidence of that at the moment. I think that is certainly the case in russia and a lot of these other countries. The reason why they were buying gold is because they were accumulating u. S. Dollar reserves from selling oil on the open market. They are still accumulating dollars, therefore, presumably need to diversify into gold. Last several years, i dont know that that necessarily stops here. Alix if gold is behaving like it is supposed to come at you want to own it and buy it here it is supposed to, you want to own it and buy it here . Ian i worry that the decline in oil income that the opec countries have seen has really reduced the amount of petrol dollars in the Global Economy. That its one of the things that have been driving the commercial paper market and driving these areas, but i agree, what is happening is they probably are seeing some selling. 20152016it more like. We still would have gold as one of our preferred Asset Classes at this point. It is a beneficiary of low real yields and a weaker dollar, but has to emerge eventually. Alix just to asking a different way, if you dont see any sort of shortselling for Central Banks, do we see anymore buying from Central Banks, which has been a driving supporter of the market recently . Will i think that is right. I am not sure we will see any majorly different patterns as far as central bank buying, and consistent with the last 10 years or so. I think whats important is Central Banks are a factor, but not really a driving a dominant driver of the price. They dominant driver of the isce is the investor, who determining the price of gold over the next few years. Eight nto thousand you got in 2008, those who came in and bought gold pretty aggressively. Alix to wrap all of that up, where else do you want to be putting your money right now . Ian we would say you need to stick with the defensive assets. 1 treasuries are going to look attractive for a lot of global investors, and if you want to be in equities, stay in the defensive bit, but at the end of the day we are going to see Energy Prices coming back up. Thats for sure. Weve now got energy yields in the equity market above the energy pe. Normally, even with the discount you are going to get because Energy Earnings are going to be atrocious, theres probably some kind of value and some of those Energy Stocks as well. The ones that have fallen 80 , 90 . Alix it is like the nailbiter. Thanks a lot. Really appreciate it. Ian harnett, will rhind, thank you. We want to give you an update on what is making headlines outside the business world. Viviana hurtado is here. Viviana some senators sold stock in january after a private briefing on the coronavirus. Richard burr is chairman of the Senate Intelligence committee. Another is married to the chairman of the new york stock exchange. Both completed their sales at a time when the Trump Administration was downplaying the threat of the outbreak. They deny any wrongdoing. Germany is considering sweeping measures to support the economy and help Companies Deal with the impact of the coronavirus. German media reporting chancellor Angela MerkelsRuling Coalition would create a fund worth 538 billion dollars to provide firms with loan guarantees and cash ejections. That as the nation braces for a possible lockdown as soon as monday. Minister prime Narendra Modi is urging the ys 1. 3 billion citizens to stay indoors to protect themselves from the fast spreading coronavirus. Halting allo International Flights from landing in the country for a week. Global news global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Viviana Hurtado. This is bloomberg. Alix thanks so much. Is shuttingorsche down temporarily to respond to the epidemic. We will speak with oliver blume, porsche chairman and ceo. If you have a bloomberg terminal, check out tv. Check out anything you might have missed in the conversation. This is bloomberg. Viviana im Viviana Hurtado. Beer coming up, debeers ceo. You are watching bloomberg daybreak. One american brand showing extraordinary resilience. This in a brutal market rout that has spared almost no corner of the Financial Market. Ups has been bolstered by deep ties to amazon. It has seen a surge in orders. People are staying home to avoid stores. Ups also has a more dominant position on the ground than in the air. It is less exposed to asia compared to fedex. Apple keeping business rolling through the coronavirus pandemic by launching a new ipad pro and two new macs, but that doesnt mean its supply chain is in the clear. Products will begin arriving on were with but those production likely starting in january. We end with the u. S. Government. It should take Lessons Learned from the 2009 Auto Industry bailout and scale them up for the current crisis. That is according to the socalled czar for the obama administrations 50 billion auto bailout. He says stricter terms should be enacted for bigger companies. President trump said he supports ticking stake in companies that receive aid from taxpayers. Im Viviana Hurtado. That is your Bloomberg Business flash. Alix lets stay on autos for a second. Porsche says it plans to stop production for two weeks, but sees a return to normalization in china. Joining me as oliver blume, porsche chairman and ceo. Really good if you to join me right now. You are looking at a twoweek production shut down. What data are you looking at to see if you have to extend that echo. Oliver to extend that . Oliver we are looking back to a very successful year for 2019. It was an alltime high in sales and a lot of new products last year. One, the electric titan. We came from a very good position for 2020, and now we are faced with a huge challenge by the coronavirus. Week, because of , especially inn the european market, to close our factories for the next two weeks, and then we will decide how to continue. Alix what is your confidence that you can pick up in two weeks . Db expect a full return to production or a slow drift . Oliver it is early to predict how we will continue. Have a team where we come together every day to analyze and decide how we will go on, and therefore, we think two itks is the first step, but could be longer. Alix how long can you sustain before you have to make some real decisions some real capex decisions or other expenditure decisions . Oliver we have a socalled week by week. On the cost side, what we have to do and technical decisions. Wehink for the next weeks, are well prepared, also from itquidity and so on, but if will last several weeks or months, we have to take more measures to affect the situation. Alix if you are going to have to rank what measure you would look at first, can you do that for me . , to putfirst of all consideration on our main business, that is an important point. We have a lot of cost reductions. Therefore, it depends come up it depends therefore, it depends what situation we are, what measures we have to take. Alix you are also planning to invest about 15 billion euros through 21 he for in the shift to evs 15 billion euros through 2024 in the shift toward evs. Does that change with the virus . Oliver you are right, we have a ,lan to invest 15 billion euros especially in future technologies, and the next five years. , think it is very important especially in the situation like this, the transformation period for the automotive industry, to invest in future technologies. Have fixed our plan so we will do it, but analyze it deeply within the next weeks. It is necessary to propose if it is necessary to postpone e investments, but alix in terms of focusing on the u. S. As california just went into lockdown, can you give us some visibility into dealers in the u. S. . Successfulhad a very 2019, with over 60,000 units. We have sold them to our customers. We have over 190 dealerships in the u. S. The majority of all dealers fees are still not affected, but we have to watch very deeply what will happen the next weeks happen in the next weeks. We already mentioned, especially from new york, from california, that said it is a clever thing, and we havent got the sales in the last month in the u. S. I think the situation is very serious, and we have to decide stepbystep what will happen in the market in the u. S. I really appreciate your candor. Oliver blume, karen io, chairman and ceo, thank you for doing us today. Coming up, todays traders take. If you are heading out, jump into your car and tuned into Bloomberg Radio on sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix time now for traders take. Joining me is Damian Sassower of bloomberg intelligence. You are walking me through fund management. Oliver the key thing damian the key thing has been at life insurers, etc. All of these leverage strategies are funded via the money markets, and the u. S. Money markets in specific. As we are looking at on the chart, this is the forex global hedge index, wiping out all of last years 8. 7 gain. Look, this is pretty bad. Without going into specific names about which Fund Managers might be getting hit because it is all hearsay, with seven trading days left, it is going , risklong short equity parity up 3 on the month. As sonali mentioned, macro is doing ok. They are only down 1. 3 yeartodate, and those are guys like brevan howard. But it is spring for it is pretty painful out there come to say the least. Would think that if we did all of a sudden get a 180 degree turn in money market liquidity, everybody would start lending again, but i dont think we are there. I didnt think this was a value at risk shock. To be able to lend to hedge funds in this market. Appreciate it. Always good to catch up with you. Have a good weekend. Stay safe. Coming up, Lori Calvasina, Rbc Capital Markets. Lockdown. Fornia the fifthlargest gdp in the world powers down, putting pressures on the government to help stem economic losses. President trump signals he could intervene in a price war between saudi arabia and russia to help support prices, while texas talks about shutting down talks about cutting down on production. Four witching could cause quadruple witching could cause big swings in markets. Elcome to bloomberg daybreak. Im alix steel. Thank god its actually friday. Lets check on where markets are. You are up for the s p. Some indices up the most in years. The s p up over 2 . You did have the dow havent inside day yesterday. Large caps starting to outperform. Also seeing the dollar off its recent highs. It had an eight day winning streak, now down 0. 7 . 102 is still going to put a lot of pressure on Asset Classes. Still some kind of a bid, but weve been off the lows of the 10 year for some time now. Crude might have found a bottom as well, particularly if we get some kind of agreement between the u. S. , russia, and saudi arabia. Earnings estimates for the s p continued to grind their way lower. Lori calvasina of rbc is the latest strategist to cut her earnings outlook. Our new forecast anticipates a 15 drop for the whole year. We do not have a midyear 2020 price target, but could see potential downside to 1725. Joining me is Lori Calvasina, Rbc Capital Markets head of u. S. Equity strategy. 1725, do youto still feel this way 24 hours later . Ori one thing about this market is weve held above the 2300 mark, within the average of the peak to trough mark. Right now, the market is still telling us it is pricing in recession and nothing works. If you break below that 2300, we think you could make a beeline for the 1725 mark. What i think the message from the market would be is expecting something more onerous than recession. That is a critical thing we are watching right now. Alix part of that is also going to depend on what happens with yields. Have we seen the bottom in the 10 year . It is hard to say. The movement higher in yields recently has taken markets quite by surprise. Is part of the problem, and not a good sign at all. Effectively, what we think is taking place is that credit and money markets, for example, commercial paper, the revo markets have gotten fixed to a large degree recently, but still, many of the money market instruments are still under stress. Theres a degree of fungibility of these assets, meaning that these assets are cash substitutes. When you are not able to exchange these to raise cash, particularly a lot of Foreign Corporations on the cp market, they are not able to access cash, the end up selling what they can, not what they want. Yields start to rise. People start to sell u. S. Treasuries, government bonds. I want you to think about this in the context of a risk parity portfolio versus a fixed income portfolio. U. S. Treasuries are supposed to be your hedge. When equities are going down and bond prices are going down, and yield prices are going up, that is hurting you both ways. What ends up happening is there just becomes wholesale liquidation across the entire financial system. And eventhat today starting yesterday, which was the first sign was that equities were up and bond yields were down, today, equities are up so far, and bonds are down. That is the key. What we need to see is that these Interest Rates need to be lower, or at least stay low, and not continue to rise and cause more pain. Your hedge shouldnt act like a risk asset, and that is what has been going on in the markets, creating a lot of it to libby a lot of volatility. Fall, you willto start to see the market function better. Alix we mentioned the risk parity trade. The shakeoutike for that has happened . How do you think about how you allocate in the equity market within that environment . What i liked about the market yesterday, we did see what should recover well do well. We saw a good mood and energy, and financials. What we have been telling people to do in terms of sector allocations is have a balance. We want a balance between defense, secular growth, and offensive cyclicality. Keep buying utilities for defense, keep buying the health care. Political risk is off. Also, keep buying the industrials. Out of all of those buckets, theres a less amount on those industrials, so youve got record type valuation sitting in that space. That is what we are trying to tell people, to keep a balance. Alix jim, they are trying to fix the issues in the liquidity market. Is what they have done so far, work . Is it going to jim i think just the ideajim that these support facilities are out there and of a reasonable size, they can start to calm these markets down. Is has the paper well . Started to function the answer is no, but theres a bit of a time lag for some of these programs to work. For example, when theres a lot of stress in the market and you need cash, you get a lot of sell orders coming in. Every time the markets improve, you have to clear through those first before you get to more market normality. That is really the question right here. It is going to take a. D it is going to take a perio of time to get through this. If they need to get bigger, they will get bigger, so i think it ultimately does works. Alix do you think the hedge , are they delivered, or is there more pain to come that will exacerbate all of these moves . Jim it is hard to know exactly what their positions are. What i can say is that these moves have been very. If you had to get out of positions, it has been extraordinarily difficult to do. I would argue theres still some bad positions on the markets and you need to delever get out. The good news is like, unlike 2008, this is not a Financial Market crisis. As these market facilities start to come back and write the markets, i think if people want out, they are going to get out. Some people may hold on because conditions are getting incrementally better, starting yesterday. This is day two. Alix day two. Spective, very enough perspectives, fair enough. Dani lori some of this forced selling by hedge funds took a breather. With think about the nasdaq exposure. A lot of that tech exposure, the internet names. That is really where they hedge funds have been hiding out in recent years. We have a hedge fund hotdogs list, and we have been monitoring that very closely. It has been fantastic in terms of being a safe haven since the meltdown started, but what we saw monday and tuesday was that those names were suddenly starting to get very hard. When i talked to my traders and some of the clients i work with, what we heard lots of reports of forced selling from hedge funds. We think that is something that hit the market pretty hard earlier in the week, but it seemed to has taken a breather. We did at least take a timeout yesterday. Alix thats a fair point. We are also seeing a less large move, at least for day one. On a sentiment basis, does that help . What does that do to psychology . Lori lori i think that helps. Ive talked to a lot of long only investors who have been doing their best not to panic and how they want to use this is a valuation opportunity to buy names they had on the Shopping List for long time. This makes it impossible to trade and has made it very difficult for some of those investors to come in. Seeing the volatility died down can help sentiment and get some buyers back into this market. Alix where can you still buy in the fixed income market . I am thinking treasuries, european government. There was some corporate issuance that came yesterday for very large u. S. Banks. I think it went very well. It is not that the markets are completely open, but there are opportunities. Let me tell you some of the valuations and you can get some very good, highquality companies is extorting nearly attractive. As you go lower down the credit quality spectrum, it gets very dicey. The liquidity gets a lot worse, and there are a lot more concerns. In europe, with the ecb throwing as a qe program , you look at european peripheral spreads even in places like italy and spain, where bond yields have started to come in, weve got to be careful because of the virus in terms of what condition and what shape that might take across europe, but there are places in europe where you can still put the money to work, which i think will be very well supported. , we wentd of the day through what we went through in 2008, and generally, you end up being ok. Lix Lori Calvasina, jim caron, you are sticking with me. Coming up, more about where the opportunities are and what it means for the overall market. This is bloomberg. Alix credit markets suffering their worst we can a decade, with questions about whether stimulus will be enough to calm turmoil. Still with me, Lori Calvasina and jim caron. Like seen so much money, 35 billion, come out of investmentgrade funds. How much of that is true panic versus selling what is winning and moving somewhere else . Jim i think a lot of it is panic because essentially, the math that people are doing is they are saying, look, i dont know how long this virus is going to take to flatten the curve before business gets to return to some form of normalcy. Therefore, they are going to look at cash flows, at earnings, and then they are going to look at the weaker Balance Sheet companies. The problem is the market has already figured that out. The liquidity is not very good. So what you end up doing is you end up selling what you can sell, and what you can sell typically be the Higher Quality names because they have better liquidity. The name of the game right now is cash is king. People want to raise cash. They want to get out of financial assets. Fear typetypical more of move that goes into the markets. At some point, there will be a Tipping Point where we start to look at valuations, but we need to see some semblance of stability any markets where we start to form a range where people feel comfortable buying in the not tomorrow being in the red pretty severely. That is what nobody wants to do. Alix before we get to the underlying earnings of that, do you see the fed having to come in point and buy Corporate Credit, to get the ok to do that from congress . Jim it is my hunch that the answer is it is likely to be yes. The reason is when you look at the size of the potential cost to the Corporate Credit market, it is in the trillions of dollars. We cant have a Corporate Credit market and if that happens, if there is a civic and a significant cost to the Corporate Credit market, you cant have a large Investment Grade market functioning well or functioning at distressed levels. It defeats the purpose of Investment Grade and high quality. It really depends on how long it takes to get through an flatten the curve of the new infections of the virus, and how much economic disruption will there be, and obviously for how long. My inclination is that you are going to need to have a lot of companies able to refinance their debt, service their debt. We ongoing considerations as go forward, the ultimate metric here, what washington is going to listen to, they dont necessarily focus on i am up 5 or down 5 this year. The metric that is key is jobs. How many jobs does it cost if we dont get these markets functioning . What happens to these companies is they either go out of business, or they shrink and have layoffs. That creates more and more problems. Youve got to break that cycle. Takes, whatever it is supporting the credit market, everything is on the table, so i am not going to roll that one out. Alix lori, that brings us to the underlying earnings for some of these companies. Can you give us some perspective on the earnings visibility into that whole group . Lori on a good day and a good economy, visibility into smallcap earnings is pretty limited anyway. I think investors have sensed this is a major problem for small caps. Theres a lot of shortterm debt, a lot of variablerate. But investors have really punished that space accordingly. Talking to some of my smallcap clients, they are just trying to figure out who can survive. That is really the state they are in at this point in time. I think what i noticed yesterday of those concerns come bit undone. But i do think those credit concerns are one of the big things weighing on this recently. Alix we are still below the 2008 lows. How do we look at this space technically, and how much and bad news is going to be priced in . Small caps were looking extraordinarily cheap compared to large caps. We were back down to lows on valuations, looking at things like pricetobook, price to sale, other valuations. What i think we need to think about longerterm with smallcap is, of course, they are going to get battered shortterm. Who are going to be the winners in the recovery trade. These are things that are on my list once we get through this mess in the market that you will be wanting to look at for some longerterm opportunities. You said eventually we will see good opportunities. What do you think provides that on the market right now . Jim oddly enough, i think the Financial Sector provides decent opportunities. Financials and thanks been almost have managed like utilities. Strong regulated, very Balance Sheets. The Balance Sheets are what we want to gravitate towards. Other sectors and the markets i think will also do reasonably well. Really, what we are saying is we want boring because boring is super beautiful these days. We think the earnings will continue to be there. It is very idiosyncratic. We do have to be careful about which names and which sectors we ultimately pick. Broadly, i think the overall market should do better once we get through all of this, but it is hard to define where the exact bottom is. That being said, i think some of the winners are going to be in these defensive sectors, and i would argue the Financial Sector particularly alix thanks so much. Lori calvasina of rbc capital of morgand jim Caron Stanley sticking with me. This is bloomberg. Viviana this is bloomberg daybreak. Cathay Pacific Airways will slash Passenger Capacity by 96 in april and may. It is already losing business because of ongoing government protests in hong kong. The airline asked staff to take unpaid leave and is warning of substantial loss in the first half of this year. Hong kong express is the budget carrier cathay acquired last year. It is temporarily shutting down all flight operations. The dutch tulip industry is the latest to be hurt by the coronavirus pandemic. Officials saying business is down by as much as 85 , a huge hit for amsterdams flower industry. Lastr, experts work year, exports were worth or than 6 million. Some are giving tulips a way to Health Care Workers as an appreciation for their work. President donald trump wading into the Oil Price War between saudi arabia and russia. The president saying he could intervene and wants to break the deadlock as he faces calls from lawmakers to help the domestic oil industry. Yesterday seeing the biggest spike in oil on record, falling from the lowest settlement price in 18 years. Meanwhile, oil trading legend andy hall says he is thankful to be out of the business. He described the market is broken and in longterm decline. Alix thanks so much. Lets stay with oil for a second. Lori calvasina of rbc capital stanleycaron of morgan are still with me. How do you look at the Energy Sector right now . Lori weve been neutral here for a while. We viewed it as a trading sector. This a lot of interest in energy as recently as four or five weeks ago in my conversations as people, doing things like sending me charts of tech relative to energy. In retrospect, that is always a negative signal for the Energy Sector. I will tell you how i am taking about it. We know this how i am thinking about it. We know this price war will end at some point. They will do well on an initial recovery trade, but that is that something you want to sell . We think it is. Esg funds, a big part of asset management, dont want anything to do with the sector. We feel like value funds are the ones who are going to buy and sell it, and they are already pretty exposed to the sector. I just dont know who the longterm buyers are once we get past an initial recovery trade. One of the things driving our initial view has been we really have liked the shareholder return profile of this sector. It has been really appealing compared to other sectors. I start to question whether or not that story is going to be true. It seems where we are today, those things are going to get cut. Might get a nice pop in the shortterm, but i wouldnt play it be on that play it beyond that. Alix Lori Calvasina of Rbc Capital Markets, we will leave it there. Both of your are sticking with me. I come america says u. S. Economy is already in recession bank of america says the u. S. Economy is already in recession. We will speak to michelle meyer. In the markets, maybe we are breathing a sigh of relief here. Many strategists ok at yesterdays price action strategists looking at yesterdays price action is a little more positive. We are now just up by about 2 on s p. Youre off the highs on the dollar index. A stellar eightday rally caused shakedown and a lot of other Asset Classes. Still seeing a bid in the treasury market. That has been pretty firm. Much more coming up. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] alix this is bloomberg daybreak. I am alix steel. We made it to friday. Nasdaq futures are moving higher as well. We had large cap text performing well yesterday and we are seeing in outperformance again the s p off the highs. European equity still getting a nice bid. Switch up the board. The dollar index is off its highs. We did have a big rally that caused a lot of dislocation in terminal and other equity market. Volatility coming down, surprising. We are at 69 on the vix. Rude up. 3 off the highs of the session. It feels like we are losing a little bit of steam as we head into the open good bank of america now says the u. S. Recession is here. Joining me as michelle meyer, bank of america head of u. S. Economics behind the call. It is a two pronged question. Walk me through your call and how do you begin to model that . Terms of the forecast, it is all about q2. We are looking for a 12 drop on an annualized basis, the biggest in history. We are already seeing data to help influence that call. Marchdicators for early the Empire State Manufacturing survey into recession. The philadelphia survey in recession. Initial jobless claims for the middle of the month spike higher. What we have heard so far from the states that have been reporting, it looks like it is going to be even more dramatic. We do think we have data at our hands to start to think about the impact. It does also require brave assumptions about what comes next. If you think about the course of the virus, when it might start to level out and when you might start to see signs of a slowdown or recovery on the other end, you have to think about the economic response when it comes to government. What are they doing in terms of the shutdown . Are they forcing selfquarantine measures . This part of the economy is effectively shutting down. Of gdpoduce x percent and that will go away and you can stimulate that forward. Alix there are a lot of different prongs. Part of it is the u. S. Shutting down. There is also the consumer issue. There is also manufacturing shutting down, which no one expected as much as we are now getting, and that our are supply chain issues. Can you help me understand which is the worst one of all of that . Michelle you want to look at it from all of those different assets. I would say the most acute is the fact people are quarantined themselves. Governments are enforcing that. Is a big sudden shock to the economy, which is obviously negative right now but could have longrun positives if those quarantine efforts and the shutting down of the economy and the show shall distancing it is creating means it can stop the spread of the virus. In the long run we will all be better off if the economy is better off. It does mean therell be shortterm pain. And then consumer psychology, which is linked to that dynamic around the government response, and the consumer psychology is a difficult one because that is one to consider for when the recovery starts. Even when things are back and running, how do consumers reengage in the economy . Or are consumers going to be engaged on a more longrun basis . Alix that brings us to a more structural shift within the economy in terms of when we get out of this, we are not going to back to normal. Even if you get some kind of ushaped vshaped, there will be structural changes, no . Michelle i would think so. After this experience, you could see a different mentality when it comes to working from home or virtual interaction. Some of that might stay. You can see a difference in how people want to live, urban versus suburban living as a result of these Lessons Learned. I think you have to consider these longterm structural changes as a result of this mass crisis. , once we get past the spread of the virus, therell will be a lot of pentup demand, a lot of desire to reengage in the economy. Alix to wrap it up, what kind of Fiscal Relief can we see . Michelle policy is critical in trying to understand the other side, when that recovery happens and how strong it might be good there will be two sides, Monetary Policy and fiscal policy. Policy, themonetary fed has been targeted, and they are determined to get market functioning back and get liquidity to return and keep throwing different facilities out there to see if any are helping. On the fiscal front we are seeing some progress. We are seeing the recent bill passed targeted at trying to get testing out and help those who are hurt. The next step is to probably do something big. They are already talking about over 1 trillion. I think that is probably right. Blanketed support for the economy. Starting to think about potential bailouts. I think there is more to come. Alix michelle, appreciate your perspective. Michelle meyer, bank of america. Still with me are Lori Calvasina and jim caron. I want to pick up with you, jim. A 1 trillion package sounds great. Is that enough . Jim i think it is on the light side. The reason why i say that is because when we did calculations on this, our base case is the total cost of gdp this year will be in dollar terms about 825 billion. You can argue that number is higher low, but based on our estimates that is what we come up with. My rule of thumb is that in order to have shock and awe, you need about two times the size of the overall cost. I would argue a package between 1. 5 trillion dollars and 2 trillion seems appropriate. Clearly, it also depends on what type of support mechanisms we have and what type of leverage to get out of those support mechanisms, whether it is commercial paper facility or the primary dealer facility or whatever the case may be. In order to get the economy kick started, i think there are some stimulus packages that are good, but lets look longerterm. What is the longerterm damage to Corporate America . Do we need more lending facilities or longterm loans just to keep these businesses 6, 12, andthe next 18 months after losing all of this revenue in the near term and not being able to make their obligations coming up . That is what the key is. Dont get me wrong. I think any progress, 1. 2 trillion, 1. 3 trillion, that is good. I think the number today should be in 1. 5 trillion to 2 trillion. Alix it is a brightpoint and one echoed in the markets. Bigconversation was we need stimulus out of the government and that will support the equity market and we will be ok. We are getting that. Markets are not necessarily ok. What is the market going to track now . Lori the market is looking for a couple things. In the shorter term, and i do not know what the right number is in terms of how much stimulus we need, but the most important thing is we need to make sure that Consumer Behavior can normalize and we can see this pop in q3. We have seen forecast anticipating dire q2 scenarios and positive q3. How do we make sure the consumer feels positive enough to go spending in q3 . You have to get cash into hands, grants, money into consumer hands quickly. I think the market needs to see that things happening out of washington are going to have an impact immediately in order for all of these rose gdp q3 forecasts to pan out. I would say generally, we have talked about how the market is trading like it did in the worst days of the financial crisis, late 2008, early october. One thing ive seen is the idea that government has their arms around this, they are doing things. We were not seeing that last week. Last week there was a lot of concern that what the fed is doing will not matter, it will not help, the government does not have their act together. Policy has changed this week and that is important for markets. At what point do we need to have the conversation about how do we pay for this and what will that do to the bond market and are we looking at modern monetary theory . Jim the short answer is later on we will have that conversation, at some date in the future. I am sure we will have it in a deep debate. Modern monetary theory does feel like we are getting there. You put Interest Rates to zero and you use fiscal stimulus to drive the markets and use tax policy as your tightening and easing mechanisms. I would not say we are there right now, but a good case could be made we are making a lot of progress towards that modern monetary theory because we are policyvely using fiscal and running up deficits. Deficits will go sky high. Under mmt the deficits do not matter. You can print money. Essentially we are doing that with qe and everything else. It is a question of is this the new normal course of business . If it is, the things michelle was talking about, that me that we might be entering into a new structural trend beyond how people work and what people do in the economy. In terms of how we stimulate and tighten in the economy, the new Monetary Policy we have got used to with the fed might become a fiscal policy lever. That comes with a much higher , givenof debt dynamics that what i ultimately argue is modern monetary theory ands higher inflation. The purists in that space would say it does not have to, but generally speaking if governments can print money and buy assets, generally speaking historically would show that ends poorly. Alix appreciate your perspective. Really helpful on this friday. Lori calvasina of Rbc Capital Markets and jim caron of morgan stanley. Now we want to give you an update on what is making headlines outside the business world. Viviana hurtado is here with first word news. Viviana italy is preparing to extent the near total lockdown on the country after the country reach the grim milestone of being the country with the most coronavirus debts. Italian officials are considering extended the ban until at least may. Coronavirus coronavirus debts. Coronavirus deaths. More than 4400 italians have died from the virus. And iran, leaders are marking the persian new year with the val to overcome the coronavirus pandemic and buildup that economy. The upbeate to tone despite the and i meant despite the announcement 140 more people died overnight. The death toll now more than 1400. Nearly 20,000 people have contracted the virus. The president has defended his government response to the outbreak in the face of criticism officials have acted too slowly. We end in britain. It is asking tens of thousands of retired doctors and nurses to return to work to help fight the coronavirus pandemic. Outbreak is not expected to peak for several weeks, but some hospitals have complained about overworked staff, shortages of ventilators, and protective equipment. The u. K. Has more than 3200 cases of coronavirus. 144 people have died. 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 am Viviana Hurtado. This is bloomberg. Alix . Globaloming up, the spread of the coronavirus putting a drain on supply chain. We will speak to susan devore, ceo of Health Care Company premier. Bloomberg users, interact with us at gtv. Any chart we use you can check out at gtv. This is bloomberg. Viviana i am Viviana Hurtado coming to you live from the principal room. Coming up in the next halfhour, allianz chiefan, advisor. Viviana youre watching bloomberg daybreak. Im Viviana Hurtado with your Bloomberg Business flash. Apple. N with it kept its business rolling through the coronavirus pandemic by launching a new ipad pro. That does not mean it supply chain is in the clear. Next week, deliveries will begin arriving on doorsteps but bloomberg has learned production of those devices likely started in early january. We end with Teva Pharmaceuticals planning to donate 6 million of malaria tablets to help u. S. Hospitals. By president touted trump is potential treatment for coronavirus. The Israeli Company is one of the Worlds Largest producers of the drug. That is your Bloomberg Business flash. Alix thanks so much. I want to thank Michael Mckee for pointing this out. Apparently ohio initial jobless claims right now are 139,000 from sunday to thursday versus 4800 a week ago. Badgh frequency on just how the Unemployment Rate will be. 2 million unemployed. Not great. It is time for bottom line. We will look at Companies Worth watching this morning. Today we will focus on the Health Care Environment as the goodavirus cases rising joining me is susan devore, ceo of premier, Health Care Improvement company. Can you give me visibility into the supply chains for things like masks and ventilators. Susan thank you and good morning. This is an unprecedented challenge. The normal consumption of masks would be Something Like 25 million a year. To 150 orders for up million and we think given the numbers will go over 10,000 we will need many more masks than that. Masks are insignificant shortage challenge. Ventilators are the same thing. Typically 2000 ventilators would be ordered and purchased for a year. We had orders for 500 ventilators in the last 72 hours. This is not a challenge anyone company or the government can fall below. They will all have to Work Together to deal with this challenge. Alix what you need help from . Is it the government . Is at Companies Like ford and gm turning their plans into ventilation makers . Susan we think there are three things that need to happen. We all have to have visibility to where the supply is and where the demand is. We are working collaboratively with manufacturing companies, purchasing organizations, distributors, and premier is bringing these groups together to say lets get visibility to supply and demand, then lets figure out how we get those products allocated so they are the right place for the right patients at the right time, and the third thing is how do we get enhanced production . How do we take other production lines in adjacent industries and convert them to manufacturing some of the masks and gowns and gloves and ventilators . All of that activity is going on today and going on with the government. Alix can you give me insight into the requests coming in and how they will pay for it . If the hospitals is requesting huge amount of ventilators, to pay for it, especially when hospitals may not have the funding . Susan premier works with about 4000 hospitals and 170 5000 other nonacute care sites around the country. I would say they are all focused on what they need to take care of patients and that is their mission. Many of them do live on thin margins. This will be financially challenging for them, shortterm and longterm. Most of our Health Systems are notforprofit Health Systems. They have been in those communities for a long time and they are committed to doing what needs to be done to take care of the population. Alix you are able to give us insight into what is happening in the last 72 hours. What is your expectation for the next 72 hours . Susan i think in the next 72 hours the caseload will increase, the request for products will increase, the backorders will increase. What is happening now is private Sector Companies are coming together, data and clinical Analytics Companies are coming together. We are working with various arms of the federal and State Government to figure out how we collectively solve this problem. Everybody is putting the old historical competitive nature of private Sector Companies aside and we are figuring out how collectively to solve this problem. Alix a final question, are you hiring anymore people right now . Susan right now we have everybody working 24 7 to make sure we can deliver the supplies and orders to our health care systems. We also have people working around the clock to enhance Clinical Data so we can identify the patients more quickly. We have our normal hiring planned, but we are so focused on delivering the work that we are keeping that in process, but our focus is delivering supplies and clinical analytics right now. Michael appreciate alix appreciate your candor. Susan devore, premier ceo. At 20. Cally bottoming a similar signal for equities . We will look at what that means in todays technically speaking. Tune into Bloomberg Radio heard across the u. S. On sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix time for technically speaking. Joining me is mike about the loan. Joining me is mike mcglone. Lets talk about oil. Mike the chart youre looking at is the chart of crude oil since its inception in 1983. The highestrated price is 20. The market is mean reverted. It had a serious reason to revert to the mean. It should recover from here. If you notice at the far end, crude oil started trading at 30. I look at 30. Word broke down from is very good resistance. In the bottom, where the green line is, the low for 2001 was 17. That habit as the stock market was declining. Alix that will have the implications not only for the credit market but small caps as well. What are you seeing with your qi . The russell 2000 has come back to it significant mean, median, mode for the entire bull market. In the far left we have a distribution of trading. The most traded price happened right around here, maybe higher. When we look back at this chart and you look at the far upper right, that recent high was below the old high, and that was a good diversions indication. Now it is if we are going to base, this is a level to start basing from. Alix optimistic signs on this friday after very difficult week for the market. Mike mcglone of bloomberg intelligence. That wraps it up for me. Coming up on the open with jonathan ferro, Mohamed Elerian will be joining him. In the markets, you are seeing tech continue to outperform in the futures market. They had a nice move yesterday. Still up i to percent. I should point out we are off the highs of the session. , seeing Asset Classes by everything. Commodities losing steam. The dollar index also often slows of the session. Still that bit in the treasury nine basis points is where the 10 year treasury sets. This is bloomberg. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan 30 minutes until the opening bell, good morning, good morning. Equity puke futures positive 16 points equity futures positive 16 points. In the bond market, yields lower 16 basis points. Your tenure down to 1 . An original move, Dollar Strength replaced by dollar weakness. North of 1. 07. T a week of unprecedented stimulus not enough to put a floor under an ugly credit market. Great bond outflows smashing previous records after spending two months debating the scope and severity of the crisis. The focus is increasingly on longevity. The california ordering all 40 million residents to stay at home, the equivalent of shutting down the fifth biggest econo