Nice pop after yesterdays disastrous performance, but still, you cant call any kind of victory within the crude market. Time now for todays top market moving news from our washington and new york bureaus. Congressional republicans and democrats are preparing for a fourth round of stimulus. Joining me is kevin cirilli. The ink hasnt even dried on third stimulus package. What are we talking about for phase four . Kevin kevin i was speaking with sources on both sides of the aisle, and the conversations are starting first and foremost on where the holes are left as a result of the latest round of economic stimulus. They want to see how quickly they are able to get liquidity to businesses, as well as to americans as they are expecting these paychecks in their account. The second part of this is likely going to be in the Financial Services sector, as well as other industries that have been pummeled as a result of this. I wouldnts bait that now, lawmakers arent going to begin talking about this i would anticipate that now, lawmakers arent going to begin talking about this until at least a month out. But there is no question that additional help is only way. They just havent set the parameters for the vehicle as of now. Much. Thanks so where we are seeing some very big stimulus, record stimulus, in fact, is in japan. Overnight come of the ruling party unleashes a proposal for stimulus worth 554 billion. Michael mckee joins us with more. Michael this is round for a stimulus this is round four of stimulus in japan, and this is a record level of stimulus. Billion yen. 0 more than 10 trillion would be handed out to workers and companies who have been hurt by the virus, laidoff, and some money goes to the companies as well to try to keep people on payroll. Across the south china sea, you mentioned it earlier, for investors this morning, what to make of that chinese pmi data . Up to 52 for manufacturing. Last month was a record low of 35. 7. The services pmi in china is at 52. 3. The issue is this only asks people how are things compared to last month. They are obviously better than last month, but is it really a vshaped recovery, or just a relative recovery . Thats the question. We get our pmi data in the United States, europe gets theirs tomorrow. The coronavirus affecting activity there. Ppi comes in for the euro zone at just 0. 7 . It was 1. 2 last month. German unemployment, only 1000 more people on the unemployment rolls. The reason . They did this only on database through march 12, and the interesting thing about that is that is the date on which our payrolls report on friday is based. Dont expect a whole lot there. Ou mentioned Goldman Sachs 34 decline in the Second Quarter in gdp. They also see on them limit rising to 15 . We did show just a second ago a graphic that showed a new indicator from the new york fed. We are all dying to track the economy in real time, and all the data we get so badly lagged. Thatis a realtime index combines consumer sentiment, fuel production, fuel sales, and electricity consumption. You can see what has happened, but it is something i am sure a lot of people will be following on the bloomberg as weeks go on because it gives us a realtime look at the economy. One quick thing, chinese stimulus in one province in china, they are giving people a to goay off every week shopping. They want people to shop. Maybe youd like that. [laughter] alix i would love that. My husband . Not so much. Mike mckee, thanks so much. Global equities are facing down their worst quarter since 2008. Annmarie hordern is with us with all of the dirty details. Theres so many superlatives. It is hard to know which one you went to talk about. Domarie as you say, where you begin with the superlatives . It was a volatile one. Anywhere you look, the coronavirus basically took over the last quarter and became a global pandemic, and basically brought the entire Global Economy to a halt. Lets start out with star performers, the havens. Treasuries and gold. For treasuries, the best quarter since 2008. Then the risky assets, thats where things get a little bit iffy. Equities, metals, and oil all plunged. U. S. Equities had their worst quarter since 2008. On the s p 500, every sector was down double digits. Financials and energy where the worst performers, 31 percent and 52 respectively. Disaster, thes a worst quarter on record. Wti down more than 60 . Last month we were not only introduced with this price war between two of the biggest producers, which is claiming u. S. Shale as a victim, but now we are dealing with a serious demand crisis. We are losing 25 on the demand side, and prices are going to go even lower. Alix appreciate that. One other thing we are all keeping our eye on today is a warning from the European Central bank ecb said it can toually force companies suspend Dividend Payments if they dont do it voluntarily during the pandemic. Bloomberg spoke with the ecbs top financial watchdog. We are taking response ability. I think that is also an important step for showing corporate responsibility. Decide not to comply with recommendations, we will decide whether taking other measures. Alix the ecb wants the dividends halted until at least october. Citi came out with a warning that said the pandemic could cause Dividend Payments by all European Companies to decline by 50 in 2020. Coming up on the program, much more of your morning trade, news and analysis 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, Damian Sassower, mike mcglone, and mike mckee. Start withwant to you. We made it out of the First Quarter. Now what . Mike im sensing blood in the streets in crude oil, so you want to start their. It just doesnt get much worse. I think we will see more bounces than declines. Just look at crude oil from 20. Going up to 30 means nothing, is extreme. Im sensing way too much optimism for complete reversal in recovery from the trade war back then, and now the coronavirus. I fear is you look at the s p 500, it is nearing the upper end of the range, i think. If you 50 correction from the bottom, it is around 2800, and i am still looking at 2000 as a key level. Theres way too much optimism that we are going to come out of this and tell our kids it was not a big deal. But crude oil from a commodity standpoint, that is pretty much oversold. Alix fair point on the shortterm level. Equities, someone at Credit Suisse had a note out that said any upbeat optimism was because people were actually rehedging. They are taking on more puts, covering and repositioning for another downdraft. What do you think . Damian quarter end risk parity guy,s, im not an equity but i would like to build on what mike was saying with regards to oil. We all know oem has a much higher beta. E. M. Talking we all know has a much higher beta. We seem downgrades now from the big three for countries like mbia, mexico, kuwait, oman, and oil is a big part of it. Alix i think the problem is if e. M. Is in trouble, what are we going to talk about in three weeks in terms of how to help them, how the dollar plays out . Michael it is going to be really tough. The imf is working on some kind of bailout plan to raise additional funds from countries around the world to help out. The question is, how bad does it get . Iving every indication that it is going to be terrible because we are seeing the chinese go back to work, but there are no customers. They have moved production to some other orchids. Some have been routed through emerging markets. A lot of them are suppliers to the chinese. So it is going to be a problem for them because they are not going to have any business, even if the coronavirus doesnt hit them as badly as it has hit some other countries. We have to keep an eye on this. It isnt clear what is going to happen to the dollar. Was very clear in saying no idea, and i join him. , itadly as we may be hit augurs well for a stronger dollar rather than a significantly weaker dollar. Way and onmian, igh in ono damian, we that. Damian it is a Fertile Ground for bond market performance. Has been a bastion of stability, a safe haven of sorts for most emergingmarket investors, and i am talking local Chinese Government bonds. It is one of only two emergingmarket constituents that are up on the year. It is relative stability that the policy officials, really that beijing has had over keeping the dollaryou on stable. Uan rate mike if by default, we have to go back to the preexisting trends, the dollar was strong before this event happened. It was a Major Pressure in commodities. Despite that still going up, to me, i am doing my monthly outlooks for april and have to just assume more dollar strength. I dont see what it is going to take for dollar weakness. It is also a signal from the fed to keep priming the pump until it says to stop. Alix so why isnt this good for developed economies . If you have a look at goldmans forecast, Second Quarter, terrible. But the third quarter, they see a 19 rebound. They are clearly still looking at some kind of v, and you have the huge stimulus coming from japan, some stabilization of the data in china. Why arent we talking about it from that lens . Michael we are in a sense. We are talking about the possible rebounds, but we dont know about the psychology of consumers when this is over. If consumers pull back and are reluctant to start spending again because they are afraid of a second round, then this is going to be a u. But that chinese data was based on comparison to the previous month. In peoples minds, they are going to look at what happened and be saying, maybe i dont want to spend right away. Abi want to wait a while. At 19 maybe i want to wait a while. Doesnt put you anywhere back to normal. Most economists say we could be 1 trillion to 2 trillion lower in gdp by the end of this year then we otherwise would be. The economy is definitely going to slow, and it may not come back as fast as a lot of people want. You will go back to work, but are you going to go back to spending the way you did before the crisis put you out of a job for a while . Alix right. Totally fair point. That brings us full circle back to emerging markets. If they become the next epicenter of the economic fallout from the virus, even if they are not hit as hard from the virus, does this play out like the 1980s . Is this a differently book . Damian it is a completely different playbook. The modern number of emerging markets is completely different. But just looking back to some of that china data, the fact of the orders downw export from december 2009, december 2008 levels, right around the Global Financial crisis, so it is bad. Chinas economy relies on trade, it relies on demand from abroad, and that is not picking up anytime soon. Alix also, i keep reading articles about supply chain disruption, in that you will see hoarding of grains or parts, and we will see countries not trade with each other. Is that coming into your fear at all . Michael michael this is going to be a very disruptive period. Youre going to see pressure certainly in the united, and i would imagine in other developed countries, to bring certain supply chains back, to make sure we are making thermometers and in thetors and n95 masks United States in sufficient quantity so we dont have to go searching for them around the world. Other companies have to decide, do i want to rely so much on the possibility that a supply chain could be interrupted . There was a feeling that with the chinese trade war, maybe you just outweighed President Trump and things will get a little bit more back to normal. But this is something nobody has any control over, the virus. This could come back again in another form. So weve got to rethink, where do i really want my supply chains . How much is it going to matter that i can do something a few pennies cheaper when people pay more for security . Alix its a good point we will be dealing with for months to come. Mcglone, now when you get up in the morning, what is the data point you are looking at as we have seen a little but of calm down with equity volatility, and some calm in the markets as well . Marketefinitely equity is shortterm fluctuating, but the key thing to note is this is a major switch flipped for consumer sentiment. Going forward in the future, people are going to hoard cash, which means they are going to be lightening up the stock market. Alix which is exactly what the problem is with china. They may be opening up, but nobody is spending. Forget about their trade partners. What is the number one thing you are chasing right now . Damian you are chasing shortterm dislocation. About rate differentials and all that good stuff, but what i think this is setting up for is yield curve compression globally. As the gravity of zero pulls yields globally to zero, and its not the fed, its the treasury which becomes the Printing Press for the worlds economies, what is the only game left in town . It is going to be u. S. Equities. Maybe not tomorrow, next month or next year, but it is setting up for a mediumterm bull run in u. S. Equities for the best of the worst. Alix best of the worst, thats not a really good indicator. Having some headlines here from china, all about the state Council Meeting chaired by liu. Eli they will add a discounting quota by about one trillion yuan, and are helping smaller banks. It feels like this is continual targeted stimulus, but not like the 2008 we have seen. Youve got to deliver to help the Global Economy now. Damian absolutely, and china has got an economy where they can get away with that. They dont need the big bank stimulus, at least not yet. We are seeings targeted measures, using specialpurpose funds, using everything at their disposal to try to get everything back to normal. I think we can learn something from that. Alix and that basically means it is on us now, no more china. Michael it is on us, but china does come into play because the chinese are huge consumers for the United States. Stuff, andlot of our they are our biggest trading partner, so we do need them. We cant switch off that quickly. It is going to be a question of who buys and when they start buying when the Chinese People start buying again soon. With all of this, it kind of comes down to you can lead a horse to a retail store, that can you make them buy . Alix thats an analogy for you. Guys, really appreciate it this morning. Much more coming up. This is bloomberg. Viviana this is bloomberg daybreak. A group of 16 banks are on the hook for 23 billion in loans. Tmobile needs them to close its takeover of sprint. The money is due tomorrow. The banks hope to sell the debt to thirdparty investors come but that has been disrupted by the coronavirus outbreak. Saudi aramco is considering sale of a stake in its pipeline unit to raise cash. The Worlds Largest oil producer hopes to raise more than 10 billion. Aramco is dealing with a historic rout in oil prices. Plus, and has a long list of spending obligations. U. S. Airlines, if they want to share coronavirus aid, they will have to give something up in return. Airlines will have to propose upfront how the federal government could retain financial stakes in their companies. That is according to new u. S. Treasury department guidelines. That is your Bloomberg Business flash. Alix thanks so much. One other story that caught my eye come of the Worlds LargestSovereign Wealth Fund is about to make some history. Norways 950 billion fund is preparing to liquidate assets to cover government withdrawals. Set toernment looks withdraw 25 billion. That was a week ago. Norway is facing its worst economic shock and half a century. If thats bad for norway, and mind what it is like for saudi arabia and their Sovereign Wealth Fund, as the epicenter of what happens when oil prices crash. That causes a lot of havoc on things like the treasury market, that have nothing to do with the overall macro environment or what the fed is doing. Crumb as to what other Sovereign Wealth Funds are doing as well. We will talk to Scott Sheffield of pioneer natural resources, and his radical suggestion that may be texas, as well as russia and saudi arabia, should get together and cut output. Jeff currie of Goldman Sachs also joins me. This is bloomberg. Theres no place like home. Especially when xfinity has you covered with fast, reliable internet. With advanced security to help keep you secure online. And with the most tv shows, movies and streaming apps all in one place. With simple Digital Tools you can get the help you need or even trouble shoot your services on your own. Download the xfinity my account app or just say help into your xfinity voice remote. We are working to make things a little easier on everyone. Download the xfinity my account app today. Alix welcome to bloomberg daybreak. Im alix steel. We finally ended that horrible First Quarter. Today we are on the front foot just a bit. I want to highlight european banks. The ecb says it could actually force banks to stop paying a dividend to preserve liquidity. What does that mean for other Asset Classes . One, buy treasuries. Two, buy the dollar. ,he vix a little bit calmer relatively. 19 is where we are for the longterm average, so will above those levels. Oil is bouncing back after a disastrous day yesterday. Lets get more. Scott sheffield and Matt Gallagher are the ceos of independent are two of the ceos event of up and Oil Companies that send a letter yesterday saying that they think a cut in production would be most helpful for the industry, and went all u. S. Shale producers to cut by 10 . Going me is Scott Sheffield of pioneer natural resources. Always great to c