Windows cracked open on the island of manhattan, the soft drone of sirens each and every moment of each day. Francine it is terrible. A lot of us have looked at china with our colleagues, and we are partners for many months, and italy. The pattern, we have been looking at curves and we are trying to flatten the curve by making people isolate, but the curve is similar from country to country with a laggard of one to two weeks. You can look back at the sirens and more resources needed for the heroes and nurses and doctors. Here,e have seen a lot and bloomberg graphics with a great chart out on the number of beds in the five boroughs of new york city. , learned a lot from that chart and from the new york times, great log charts showing the pandemic. All you need to know is new york state, not asas a a city, is on the wrong side of these different geographies affected by this pandemic. There were news in new york city, here is Viviana Hurtado. Viviana the largest economic rescue in u. S. History, the senate approving a 2 trillion package aimed at stopping the damage from the coronavirus outbreak. More than 150 million american households will receive checks and giant loans were set up to help businesses. Will sit down this morning for a rare live tv theview, interviewed on today show at 9 00 a. M. The fed is deploying unprecedented tools to prevent the Health Crisis from becoming a financial one. Dieagedy and who to let first, spanish doctors are being forced to choose. Intensive care wards are overflowing and rules dictate old people miss out to young people who have a better chance of survival. The number of deaths rising in spain faster than italy. Joe biden signaling he thinks the race for the democratic aimary is over, rejecting debate next month with bernie sanders. Sanders wants a debate to focus on the coronavirus. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Tom thanks so much. The market up big a few days ago and yesterday, and the senator from vermont pulled it back a little bit. Futures negative, the dollar weaker. Interesting nuances. We will get to david kelly on the economics. I remind everyone that the vix is well above 60. European looking at stocks, they are following the pattern in u. S. Futures, looking at the number of debts and i want to show european sovereign debt rising after the ecb announced it will scrap limits on bond purchases. Like many decisions from Central Banks and authorities, it is a landmark decision that gives it almost unlimited firepower to fight the economic fallout from the virus. People are worried about the amount of time you suspend the economy, the amount of time of locked down when people cannot go to work. Euro strengthening in the dollar heading for a third day of downward. Tom joining us now, a gentleman who stands a strategic view of investment and finance and also firstrate economics, david kelly of jp morgan. I really want to focus now on this number at 8 30. As the number one points is the number 1. 6 million . I dont know where the team at jp morgan is, but is that number indicative of selected geographies in america, or is that a nationwide statistic . David it is a nationwide statistic. It is indicative of what is going on in a part of american business, jobs in retail, leisure, restaurants, hotel, and traveling, these businesses will see massive layoffs. They have seen massive layoffs. A lot of these workers make well below average wages but they unemploymentfor benefits. They can apply for Unemployment Benefits. They have no model that will estimate these numbers. We are looking from individual states about it but it looks get a million and we will few more weeks of this because many people simply cannot file. The systems are breaking down in states that it will take a while. The next few weeks will be grim on unemployment. Published in the last six or eight hours the first good walkthrough of this stimulus i have seen, and my major take away is it only gets us out weeks, at the most months. Do you and your team assume there will be a whole another round of washington assistance . David i think there probably will be. For thesort of nyquil social distancing recession because it will not fix the recession, it will dampen down the systems. You will have huge unemployment that could go above 10 but a lot of the hardship associated with that will not occur. A lot of companies essentially have no revenue and managed to avoid bankruptcy. Designed, the cash payments, the Unemployment Benefits get you a few months, theyf we have a vaccine will have to come back again with some more. Francine i like the way you say this is basically suspended animation. How long can we suspend the economy without having really longterm consequences, three months or six . David it could be longer. We are adaptable, inventive ,eople and we will get by this incredibly boring for most people to not be able to work and do what they normally do. Once we have a vaccine and can go to cvs or walgreens and get the vaccine, im going to go and party in the whole country is. As soon as you get a vaccine, you will get a surge in activity. To characterize this recession, a full stall and a surge. I think we will get back to business pretty fast. Francine but if you look at sectors, airlines, hospitality, they cannot just live in suspension for three to six months. There are a number of companies that countries may have to take over, nationalized to keep alive. David if you look at a lot of are is in this bill, they Small Business grants because you dont have to pay back rent, utility, and payroll, and there will be a fair amount of grants to the airlines. The government should stay out of the business of taking equity stakes because the government does not know how to run these companies anyway. How can you fairly dole the money out to what businesses would be doing had this not occurred . That is a difficult and sloppy business and they will make some mistakes and i hope the government will stay out of it, but i disagree with you. The hotel will not disappear. They probably want a staff to keep it clean and make sure it is in order, you will do things like that, but you can keep it in suspended animation for a while. It is the equivalent of a hurricane on a national basis. It will be back up and running. Tom david kelly with us of jp enough i cannot convey some of the information we are seeing at 8 30 about how this pandemic is affecting the american economy. Later on, on the it can , this isrkets bloomberg. Tom good morning, everyone, bloombergs surveillance, from the edge of central park and west london. A Global Crisis and yet in america, interesting nuances in the last 24 hours, not only the focus on new york city but other challenging geographies across the nation, and all of it dovetailed into the markets and what global wall street seas and the key Economic Data at 8 30. Sleeping,ins was not another night of politics and senate in agreement. When do our viewers and listeners, when do lower paid people in america get relief, the check in the mail . Emily not quite yet. 2. 2. Te did pass the 2. 2 million stimulus which includes checks for americans, help for Small Businesses and hospitals, and now it will go to the house where they will vote on friday to give members who want to come and debate on the bill time to get back to washington, d. C. The house is not here. They have been home a couple of weeks, and house leaders, Speaker Pelosi was trying to figure out a way to make sure they can hold a vote. Some members are currently in quarantine because they have tested positive for the coronavirus, not to come back to the chamber. Tom let me give you a simplistic question, and for americans and our global audience it is germane. Is this nothing more than the Democratic Party is prolabor, proworkingclass, and the republicans are not . Emily the bill that was finally passed, there were a lot of negotiations. Billn expect to see the that came out on sunday night that did not happen, but this past 960 and it would not have been it would have been 1000 if there had not been senators who could not come to the floor. This is a bipartisan package. Yes, democrats are usually the party of unions and labor, republicans traditionally the party for business and corporations, but in the center is a bipartisan measure. Francine thank you so much, Emily Wilkins of bloomberg government. We are hearing from the World Health Organization saying it is too soon to call it a peak in italy even though the number of deaths have gone down. We get a daily update on the number affected test infected and deaths infected and deaths. The ecb started an emergency Bond Buying Program today and bond sales topped 15 billion euros. It is the busiest week since january. Lets get back to david kelly. When you look at some things the ecb has put in place, it seems to be limitless. This is uncharted territory. Are you concerned about what happens afterwards or just focused on getting through the crisis . David we have to think about what happens after the crisis, as investors and columnists. The first thing i would say both in regard to europe and the united states, what businesses and workers need our grants and ns, and the central bank the Central Government is the grant department. That is why we focus on what the government can do for fiscal stimulus. When we do have an effective vaccine, lets say it is a year from now, once we have that, we will see a significant uptick in activity around the world. There is the danger that if at that point we dont pull back the stimulus, we are not careful about having too much liquidity, we could end up with inflation. Governments around the world continue to expand their debt, as in the united states. We expect the budget to go over 15 of the gdp for the year. You could have higher Interest Rates and inflation and people wonder, will the government be able to pay this back . We have to be careful and disciplined when we came come out of it, but right now being as generous as possible is the right thing to do. Francine when will markets start thinking about what you just laid out clearly . David markets already have recognized the benefits of this fiscal stimulus. I can see that in the u. S. Equity market, but we are not necessarily passed the worst in terms of market shops. Markets grapple with the exponential mass of the virus and if we are talking about cases which worldwide go into the tens and hundreds of millions come that could shock markets. Shocked by thee Unemployment Rate jumping over 10 , so it is quite possible, and we often see in this kind of financial event, you think it is bottomed and months later you are lower, but the longterm investor needs to look past this crisis and say, lets not think of where we are in 2020. It is a write off from an economic and financial perspective. 2021, 2022, along the recovery. What does it look like after we get past this . There may well be risk assets which have been so oversold in their will be some opportunity and there will be some opportunities. Tom what of the strategy side . It dovetails nicely in with your work, Stephen Whiting as well being so qualified at citigroup. Is there an elasticity to what corporations can do on income statements with diminished nominal gdp . How elastic are they too would just to a revenue shortfall adjust to a revenue shortfall . David the key thing is what do they do with payroll . Rent,ve got payroll, utilities, costs of goods sold. Payroll, do they keep people on the payroll and except government grants . The Airline Industry is having its arm twisted to do that. That is one way to go so long as the government covers your cost. If not, you can ramp down the costs. Businesses that are extremely corporate, loss of equity embedded in balance sheets, they should have some ability to ride out the storm at a low level. It is like economy sedation but if you do it right you do not have that much cash flow you will burn through if you are not paying payroll or cost of goods sold. It is paying a diminished lighting bill and the rent. Focus ande the labor that dovetails nicely into what we will see at 8 30 this morning. David kelly with jb morgan jp morgan. On Bloomberg Radio and on television, tv , if you have a terminal it is a convenient way to see what we do, including manus crannys conversation with Sergio Ermotti. Please stay with us from london and new york, surveillance as usual. This is bloomberg. Watchingyou are bloomberg surveillance. The big japanese automakers are taking hits and their credit ratings, moodys downgrading after s p cut ford to junk. The lockdown of countries across the world causing an unprecedented collapse in oil demand. Goldman says any agreement will be too little, too late. That is your Bloomberg Business flash. Tom thank you so much, greatly appreciated. Equities, bonds, currencies, commodities. Commodities soggy today, but i want to frame it into this jobs number. Equities are weaker and even with the gyrations of credit, the two year yield is lower. 60 and the above Bloomberg Financial conditions index is six standard deviations out. Francine . Francine european. Government bonds and european stocks declining. Government bonds and yen advancing. We have a boe decision today. Governor bailey has been in charge for a week and boe watchers have given some announcements already. [ one more time by daft punk ] woo [ laughing ] woo play pop music no way dude, play rock music yeah woah no matter what music you like, stream it now on pandora with xfinity. And dont forget to catch trolls world tour. Lets party people one more time everyone. Morning, surveillance. We welcome you worldwide. Our team is doing a fantastic job piecing this together. I cannot tell you what it takes getting Sergio Ermotti test Sergio Ermotti and manus cranny Sergio Ermotti and manus cranny. ,om keene and Francine Lacqua everyone focused on 8 30 and a historic jobs number. With us, david kelly of jp morgan. How will the financials do . One of the great debates is people saying, i dont want you to talk to jp morgan other than mr. Dimon has good health but how should the financials do . David they will be wellpositioned. This will be attempts by governments to give grants to businesses as opposed to strongarming banks into lending them, that should help the banks. Wellcapitalized and have suspended buybacks. If you look at Dividend Payments , dividend payout ratios are low so they can keep paying dividends for long time even in a down market. We have a little bit of a slope in the yield curve, not much at eight basis points. I think that will steepen up. I think the Financial Sector along with the Health Care Sector and utility sector should do well in this in relative terms. It is not the epicenter like it was the last time around. Francine there were concerns about ill liquidity in the market. Are those concerns now gone . Because of the centralbank action, what if all the loans and guarantees could not be repaid . David centralbank action is important because there is an issue of the credit worthiness of various loans. When you talk about liquidity versus solvency, on solvency, federal aid will help avoid genuine defaults of a lot of these businesses. We have never seen Central Banks be so aggressive. Short of hiring helicopters and dropping dollar bills, i cannot think what else the Federal Reserve could have done. It is a virtual alphabet soup of programs working. Said theyl reserve will do whatever they can to ensure liquidity. Pay an inflation price down the road for that . Francine david kelly of jp morgan asset management. Lets get to new york city. Viviana history being made with a unanimous vote, lawmakers approving a 2 trillion rescue plan to keep families and companies afloat. The pressure is on the democraticcontrolled house set to vote on the bill tomorrow. The stimulus package could result in the fed having as much is 4. 5 trillion to keep credit flowing. The money could be used for direct loans to american businesses. Includes 450 4 billion for the treasury to backstop emergency actions. The number of deaths in the u. S. From the coronavirus have surpassed 1000, the World Health Organization warning the u. S. Could be the next epicenter of the global outbreak. Italy suffering the highest death toll, more than 7500 people dying. India unveiling a stimulus package including food security. Migrant workers will receive help. India is on a total lockdown for three weeks. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Tom thank you so much. The mathematics of the moment is extraordinary, and we will get to Ellen Zentner. Out of spain, one of those little tea leaves, those dynamics of may a bending of the maybe apain saying bending of the curve, spain saying there were less deaths. The state ofg on Nursing Homes within spain, not speaking on all of the Nursing Homes, but we are grasping at straws trying to find good mathematics. Francine i have to say, especially when we look at the italian case, i have been trying to read but i am not an expert. Thing that caught my eye is in italy, the infection points were really the hospitals so you had overworked staff that did not have the right equipment, and these medical this medical journal is arguing it has to be treated more like a humanitarian crisis and to treat people at home so you dont go to hospital not sick and become sick. Something