The economy in the next 3, 6, 18 months. Tom it has been an extraordinary recharging of global recession. Germany looking at recession calls back to 2009, really no surprise there. But it has been the additive facts that we have seen over the weekend measuring global slowdown. There is no place you see it more than thiss morning, not only in the price decline of oil, but specifically brent has had worldwide crude has an extremely difficult six hours. Francine yeah, we also have to look at currencies, dollar had quite a move, and dollar of course is now benefiting, or at least moving on the back of the Credit Rating downgrade from other countries. We look at pound, a lot a lot of volatility there. Thats get to first word news in new york city with viviana hurtado. Viviana President Donald Trump wants the public to continue practicing social distancing until at least the end of april and not by easter come as he previously suggested. Dr. Anthony fauci telling cnn if efforts to mitigate the spread are not successful, up to 200,000 americans could die. Now to u. S. Treasury secretary steven mnuchin. He says this week expects to have fall Business Loans up and running. Mr. Mnuchin telling fox news news sunday on friday the massive 2 trillion stimulus plan signed into congress is already discussing a another relief package. To the u. K. , where lockdown measures could last for months according to the deputy chief medical officer. She says in the coming weeks the death toll will probably get worse. It will take time to see any impact that measures are happening that are having in the initial data. Cutting the u. K. Credit rating to aa minus. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, viviana hurtado. This is bloomberg. Tom lets look at the data now. Equities, bonds, currencies, commodities. Equities are a mixed bag. I will call a turn to the market, a churn to the market. In bonds, yields, curve flattening, that is what we are seeing this morning, a bit of a jumble there. The real news is in commodities. What people are watching worldwide is a new decline in oil. Lows,t back to 17year west texas intermediate for a cup of coffee, reaching 20 per barrel. Brent has come in with a vengeance this morning, there is no other way to put it. We are watching brent very, very carefully. The dollar complex is simple stronger dollar. Dont want to make too much of that, but nevertheless an elevation to the u. S. Dollar. Francine . Rightne tom, you are looking at dollar. I have been looking at it all morning, also looking at some of the currencies, including yen and including euro. I am looking at stocks overall declining. This is after we saw the bounce in risk assets last week, buried by three days since negative news on coronavirus. The number of deaths absolutely appalling in europe. Forgotten, not to be oil, plummeting to a 17year low as the market seems to be breaking down. We will have plenty more on the market movements. Lets get straight to the Principal Global Investors chief strategist. Ray to have you on the program. What are markets look great to have you on the program. What are markets looking at . There is a lot of fear there was is it policymakers, stimulus, or are they just watching the number of infected and deaths . I think it is a bit of everything at the moment. Policymakers, what they have done is very important. Here could be further measures of course, the daily effect the daily infection rate is keep your you can have li stimulus, but until you have those cases starting to peek to peek, i think there will be a lot of caution about getting back into risk assets at this stage. Take for what will it people to go back into risk assets. Criteria. Re are three ones monetary policy, which has been extremely effective so far. This will policy is starting to get there. I think we are not necessarily there in all the countries, but and there areg, some signs of hope we are seeing the numbers starting to keep up in both italy and spain, so that at least gives us an idea of where we can hope that in a couple of weeks another couple of countries will be peaking. Expectot possibly activity to rebound in the wake of coronavirus. The what i saw in literature this weekend is the gaming of global slowdown. Idea, deficit to gdp in the United States of 12 , inflation well under 2 by a number of houses as well. Is your model, your template right now, that we are going to see soon and fast another tranche of income substitutions, income stimulus . Seema i think this is key now. What we are starting to see is governments almost nationalizing part of the economy to take it through this crisis. On one side it is positive because if you have workers still in employment that have not been let go and companies have not been allowed to go bankrupt, once social distancing ends, companies and workers can get back on their feet very quickly, and that is great. But the thing we have seen in the last few days as investors are looking beyond this, looking 10 five to 10 years down the road, how are these governments going to pay back all this debt . That is how your changing the way you are analyzing regions. The deficit numbers are in double digits. It is starting to put much of it , a very significant cloud on the horizon. Tom i dont want you to be a day trader or even a week trader. We have the american jobs report on friday, all the different headlines including the german recession headline, the number of minutes ago. Is it a time to just wait, wait, wait until some of the unknowns become a little bit more known, or can you actually have comfort in the markets today, looking up three years, or even five years . It is reallyk about your horizon. Toyour if you are a three fiveyear year or longer investor, at some point this will end. Point, point at that we may start to see a slight shift. Rethink, newt to wey we should think maybe should not be so reliant on countries far away, that changes the supply chain dynamics. That is one thing. But from a day to day basis, i do not think we can be quite comfortable yet. We know that policymakers, what they have done so far on the monetary side come have taken away a lot of the panic, and the volatility should be less than what we have seen in recent weeks. We are probably not at the bottom yet until we see the daily infection rates start to ak. Tom tom how many francine how Many Companies will have to be nationalized or partly nationalized, and what does that mean for investors . Seema with nationalization, you will see a number of sectors one is airlines because they are the ones who are most sharply hit and will be having trouble getting back off the ground without any help. But when we analyze the sectors, they are not as attractive. They will not go bust but they will struggle to get back on their feet. We look at Balance Sheets of companies that will not have to be reliant on any more Government Action the other thing to think about is, Companies Looking at this as an opportunity to change direction and make them most of it for example, if you look at how people are working now, working from home, on the technology side, those companies that will be trying to benefit and make the most of those changes in consumer work and behavior, are the ones that will outperform longer term. Are we underestimating a lot of people think or say that we will go back to normal, and what youre hinting at is maybe the way we work will be changed forever after. So how do you find value in companies that will be more progressive in the way that we change as a society, once this is over . Seema i guess this is kind of entre active managem analysts come in and look at companies ended the way and the way they are moving. The people talk about ushaped comedy w shape, and some talk about the lshaped. We do overall expect the economy to get up on its feet, even if there is a slight change. We have seen that with crises over time and time again. We do see new trends emerging from those moments. But in terms of is this going to go back to normal, one space we are looking at which will give us a good idea is the credit size. If you do not see credit spreads blowing up, we are looking at a multiyear process. We are not there yet, but it is something to keep a close eye on. Tom seema shah with us. Terrific news flow as well. The timelines have been drawn out. We saw that with the president s up a press conference yesterday, having out from march through the president s press conference yesterday. In japan, mr. Abe and all of japan are looking out to late july of 2021. That is where they shift the summer olympics 2, 1 of these stories we are looking at today as well. Interviewserrific with mr. Bostic and mr. Kaplan of the fed. This is a timely interview with a gentleman who has been original and fed thinking. Mr. Bullard of the st. Louis fed. Look for that on bloomberg. This is bloomberg. Good morning. Tom good morning, everyone. Bloomberg surveillance. We say good morning from new york, from london. Again, under these arduous at home ines from new york, francine from home in london. A real deterioration in news that we saw over the wiccan. We will get to that on surveillance this morning. The ideas of 10 hospitals in central park. se Oil Market Bloomberg advantage to have will kennedy and our team, arguably the best coverage of oil. Our leadership there is with javier bloss. His leadership has been next ordinary, from 60 and 70 a barrel, down to where we are on the edge of the cusp of 20 a barrel. Were thrilled that he could take time out from Bloomberg News print. Why is brent coming down so sharply relative to west texas intermediate . Javier it gives you a better view of the Global Economy. Is really feeling a lot of the pressure in europe or the lockdowns in earlier, and in the United States, that is what really is driving brent so sharply down. Pricebarrel at the lowest that we have seen in 17 years. The number ofee microeconomic articles over the weekend suggesting that saudi arabia is k. G. Here in flooding the market with oil, that they are just going for a revenue grab based on their power, if you will. Is there any validity to that . Javier saudi arabia is trying to recover somewhat what they have lost in terms of revenue because of the crisis. There is a lot of demand we have seen because of the coronavirus outbreak. At the moment we have a quarter of global demand, meaning effectively, if everything has to stop in china twice, that is the amount of oil demand that the Global Economy 25 Million Barrels a day. I do not think they were thinking about that when they launch their Oil Price War a couple weeks ago. Francine this is a double whammy, javier. First demand is collapsing and then there is this price war for market share between saudi arabia and russia. What do we know about the two sides . Are they talking . What will it take for saudi arabia to call russia . Aredont think they talking. Certainly some companies are areng to the two sides saying that this is an also e, they are they have sold the cheapest oil on the planet to produce. A is very cheap to produce barrel of oil in siberia. Spiking with 20 oil, they are many of these will go out of business. Future, touy for the who can survive at 20. But lets not forget, in the United States, in the physical market today, in some states in the u. S. , oil has been trading a barrel. Francine but if it goes to 15, i dont know what Market Makers are telling you about that. 15 . Who can withstand that . If you look at russia and saudi arabia locked on this current path, what will it take for them to change their minds . Javier i dont think for the moment they are changing their minds. We are going to see lower prices, telling me that brent can go into the single digits, the point that we saw in 1999 and 1986. And we have already seen prices going negative in the United States, as well as some producers compelling consumers in very remote areas in the United States. And that will control the market. Lets not forget that some producers will keep pumping no matter what because shutting production is also expensive. Adjusting the well. It means the market will close with a lot of oil for a while, and there will be low prices, lower than today, for that to be curtailed. Colleagues in hydrocarbon crime in reuters reported a few days ago of an American Bank deeply troubled in their derivative space by the plunge in the price of oil. Is that what we are going to see this week, or even into april, where finally we get an analysis losses taken by the Financial System in oil and gas . I think one of the problems for banks today, the banks havece, some seen Oil Producers, obviously the Oil Producers are going out of business. Some length some banks are going to be very similar to what we saw in 2008, 2009 when we saw toxic loans from the mortgage market, the residential market, and we may see some back in oklahoma and texas, having a lot of bad loans with Oil Producers. Some pressure on banks in some areas, in new mexico and west texas. Tom javier blas, thank you so much for your worldclass coverage. He is with Bloomberg News. Francine lacqua and tom keene on this monday. This is bloomberg. Tom francine this is bloomberg surveillance. If you look at european stocks, they are not declining as much as they were an hour ago, but a lot of folks are focusing on the a lot of the focus is on the number of horrific deaths over the weekend. That is counteracting all that we heard from Central Banks and policymakers last week. The dollar rebounding and treasuries also rebounding. We had a wonderful conversation with javier blas, down today. Tom oil down today, no on brent it 22 handle crude. What we focus on are the Different Research trying to game out the unknown unknown of where gdp will be. Those are grim statistics. You see it now, as francine mentioned price up, youll down across the fixed income space. The act price up, yield down across the fixed income space. Not flattening to any kind of record flat, the distancing between the twoyear and the 10year, but nevertheless a dampening led by commodities and of course some of the currency as well. Francine . Francine coming up, we have a conversation with the former Senior Advisor to the bank of england the former bank of england governor, mark carney. He did a lot of work on sin tech and liquidity spirit now with ups. This is bloomberg. We can expect by june 1 we will be on our way to recovery. By june 1, a lot of great things will be happening. I said if we could do it by easter. The decision to extend this mitigation process until the end of april was a wise and prudent decision. Hurtado. Im viviana President Donald Trump abandoning his goal of a return to normal life by easter. He wants the public to continue practicing social distancing until at least the end of april. Earlier, Top White House medical advisor telling cnn its efforts to mitigate the spread of the virus are successful, up to 200,000 americans could die. Now to china, the nation cutting the Interest Rate and charges on loans to banks by the biggest amount since 2015. The rate is being set at 2. 2 , down from 2. 4 and it comes as the peoples bank of china invests into the Banking System around 7 billion. Low,umping to a sevenyear dipping to 22 a barrel. Kingdom says it hasnt had any contact with moscow about output cuts. Russia says while 25 a barrel is unpleasant, it isnt a catastrophe. South africas rand continuing its decline against the dollar after being downgraded. And leaked business confidence. The treasury says the leak isnt and do the right thing. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im viviana hurtado. Much. Hank you so what we have tried to do including late last week is speak to as many voices on central banking as we can. Lets listen. There is the possibility that once the Public Health crisis has gotten under control, and we do not have that issue, the economy may rebound quite robustly. Unemployment rate peaked in the low to mid teens, but we would expect that to quickly decline. Back has been mounted come involving both conventional and unconventional measures in a continuously battle ready mode. Tom there we have a number of speakers. I want to emphasize how this is a movable story and moving so quickly. We said that moving from friday over to monday, but even trying to move into this coming week. With us right now is Huw Van Steenis. Is someone we speak to each and every year in davos about the state of the Financial System and banks. Now, this crisis it is inspect it is important to dr. Van steenis. Adapt to theseto unknown unknowns. What will they do operationally to adapt to may . Or out to july . Huw rate to tattoo you. Great to chat to you. Ensure the safety of workforce, ensure we have Great Service and help lines. Smallk one aspect is the and midsized lending programs. They want to make sure theres timing to help Small Businesses. , we in the first two days have been able to help 10,000 Small Businesses. As i talked to policymakers over the weekend, the really key debate is how to make sure Central Bank Equity its down and how Small Businesses are helped. Large businesses have been helped whether it is commercial paper buying or qe, how do we help that middle . One policy debate, we need to help go further. Tom really wet said well said. That was