Oil markets, the energy markets, saudi arabia cutting an additional one Million Barrels per day. Fact thatt change the the demand has collapsed. Even changes like that dont seem to change the trajectory of what we are dealing with in the oil markets. Still with us is chris ailman of calstrs. Positioning to hedge against another, like, down in the market . Of ourit is a big chunk market portfolio. 10 . We are still keeping our fixed income. For us, it is really all about diversification. We are underweight global equity. We think this market will have some weakness. Going into the last couple of weeks, these rallies back and forth, we have repositioned our equity portfolio to be more defensive. , cash isilt defensive king. As return on cash is trash, ray dalio likes to point out. But, liquidity is king. We are seeing Equity Portfolios already coming out from the disruption, people who need bridgeeople need financing. Nice strong returns. And, just the dichotomy in the market. The indexes giving returns. The stayathome stocks are all at new highs, leading this market. The traditional go to work stocks are crumbling. Oil is flat because there is just no demand. Mentionedou kind of something about credit a minute ago. I wonder if you do see some opportunity for investment in private credit. Will that be a little bit of a yield play for fun this that may be cant play for funds that cant find it . Chris for institutional investors, that will be an investment opportunity. You already aired private equity firms immediately ask all their Portfolio Companies to tap credit lines to ramp up on liquidity. We are seeing some of the middlemarket companies that had some financing come back and start renegotiating to extend that. In the 2008 crisis, you really did see equity opportunities, real estate, where you could buy businesses at discounted prices. This one has very much the debt offering, where people need to borrow money to bridge through. His crisis as you get into the summer, you could have more and more companies. The retail, oil industry, certain anything in the consumer goods industry, need additional financing. Here are not going to go rushing back into the mall. Scarlet we see that already with the places that have reopened. A lot of money is flowing into public assets. I wonder, are these investors a little bit late to the party here . Private assets are illiquid, hard to exit, and frankly, they are pretty cyclical. You talk about how a lot of these Retail Companies will get the foot traffic that a lot of people anticipate. They have really yet to see the fallout. You are seeing sticky prices because you are mentally anchored to business back in february. In a retail mall, none of the tenants will pay rent. In an apartment complex, lets say 50 of your apartment complex will not rent for two or three months. You are not going to kick them out. They will stay. How do you manage that . Does that mean this year is a 20 write down. They are looking at the lows and they suddenly see the rebound in april. Does that mean a folio company is down, or is it just barely 15 or so off the highs in february. Are these Companies Still worth down . 10 write it will be slow in equities. They dont want to write it down aggressively because we all have to hope the economy will come back. I want to get your thoughts about this move we saw in futures markets last week. Hereipating negative rates in the u. S. We heard from several fed thatials basically saying is not happening. Im curious whether you thought we would get to that level, where we would cross the lines to where the nominal rates did go negative and how the market would react if that did happen. Chris the head of fixed income said, no, you cant go negative. I have textbooks from college saying there is no such thing as negative interest rate. I would love to say, no, it is not going to happen. I was very surprising last week. The fed cant control the long end of that market. End 10 year trading at these rates i have to think we have learned from europe, that negative rates are not effective. Disincentive to savings, disincentive to cash in the bank. Scarlet negative rates, if we get it in the u. S. , will it play out the same way as europe and japan . Chris the u. S. Economy is different but we have two prime examples of developed nations where negative rates did not help the economy, did not stimulate any growth. I think that the view at that point was dollar weakness, which hurts the trade side. The International Trade is just frozen. Even china, as it has reopened, has found International Trade so weak that there are not the orders or the demand coming in. To me, it would really compound the problem. Obviously, the equity market is not envisioning that at all at this point. Scarlet it is not, especially with the s p, little change but at a twoweek i. Chris sees the market in a trading range, the s p 500 between that does it for the closing bell. Whatd you miss . Is next. This is bloomberg. Romaine i am romaine bostick, joined by scarlet fu, broadcasting from our homes in new york. This is whatd you miss . Lower, we did open nearing losses in europe and asia, but it did not last long as u. S. Stocks made a comeback. The s p 500, the dow still down but tech leading the come back here with the nasdaq 100 rising from a sixth straight day. When you look at the oil market, we have seen oil prices the race earlier gains. They had gained after saudi arabia said that it would add voluntary Production Cut of one Million Barrels a day. The backdrop is that saudi arabia is tripling its value the move comes as the kingdom deals with two crises, the lockdown of course, and the plunge in oil prices. Joining us with more, bloomberg intelligences chief credit strategist. Arabiasds like saudi austerity plan. You are right about tripling the vat tax and losing the cost of living allowance. But, really, it is other things like the lost revenue from robin on, from ramadan, pilgrimage to mecca and medina. The government has few options other than adjust fiscal policy, liquidate reserves, issue debt, or devalue the currency. We saw reserve depletion in march by saudi arabia, the highest monthly drawdown in 20 years. Romaine what does this mean in terms of the Investment Outlook into saudi arabia. Obviously, there has been a lot of interest not only from the equity perspective, but from the debt perspective. Damian debt and saudi arabia is still relatively low compared to peers. While reserves have come down from as high as nearly 490 billion, it is still relatively high. Gdp will climate the slowest rate since the 1980s. It is interesting to note, there has been a lot of talk just given the move on the short end of saudi arabias curve. Yieldsh forward implied have not spiked nearly as high since when oil prices collapsed previously. That shows to me that oil prices are not as concerned about a break of the peg. As scarlett rightly mentioned, the dual impact of low oil prices and virus induced stimulus. But it seems like saudi arabia is most prepared to get through it. Scarlet we know they had plans to diversify the economy. Do we have an idea of how that is going. To the extent that the kingdom has control over it, is it still proceeding as planned . Damian the money that has been allocated for vision 2030 has run away but that does not mean they will take a hard turn. The matter is, it shifts the economic burden. Ofto those more capable bearing the costs, monthly goods and other items. It is really no surprise they would opt to go down this scarlet we have got to leave it there because President Trump is speaking right now, delivering remarks in the rose garden. Pres. Trump the core element of our plan to safely and gradually reopen america. We are opening, we are starting, there is enthusiasm like i have not seen in a long time. Every american should be proud of the array of skill every american has brought to this challenge. The fda has authorized more than 92 different test, and over 9 million have been performed here in the United States. Three weeks ago, we were conducting roughly 150,000 test per day. Now we are doing roughly 300,000 test per day, a 100 increase. , the United States will pass 10 million tests conducted, nearly double the amount of any other country. We are testing more people cap than south korea, the united kingdom, france, finland, and many other countries, and in some cases, combined. Friday, the fda authorized an alternative Testing Technology that can be much more readily manufactured. The corporation that makes this new test estimates that it will be able to manufacture 150,000 tests per day, immediately increasing the 300,000 tests per day within just a few weeks. s further expand our nation testing capabilities, we have got this all approved of it is all done, we are sending 1 billion to americas states, territories, and tribes. The money is going out. This major investment will ensure that america continues to conduct more tests than any country on earth by far. Thatd from the beginning the federal government would back of the states and help them build testing capabilities and capacities. That is exactly what has happened this partnership truly flourished. We have had a Good Relationship with the states, governors, other representatives within the states. A relationship like i believe i can honestly say has not been seen in this country for many years. The governors and us are working together very closely, not only on testing, but on ventilators. We are sending ventilators, as you probably heard, from other countries, many thousands of ventilators because they are in tremendous need. I think building up a lot of goodwill. Much more importantly, we are saving a lot of lives. Most states are now doing a great job. Locatedistration thousands of machines. Government is also supporting states with vital supplies, quick approvals of tests, and oneonone coaching at the white house on how to increase capacity and increase it very quickly. We have held multiple calls with every state, including with d. C. And puerto rico. We have jointly developed testing projections and go for each state for the month of may, total 12. 9 million tests. Myay, i am announcing that administration will provide the collection supplies to help states meet their targets, and meet them rapidly. Deliveredhs will be 12. 9 million swabs to states nationwide. We already have them. The delivery will be very quick. We are preparing to provide additional swabs if any state is on a pace to surpass their goal. My ministration will also provide approximately 9 million transports can be used for transport swabs to the lab processing. As a result of these actions, every state will be able to test more people per capita in may alone than south korea has tested in four months since the outbreak began. This major commitment is possible because of a massive mobilization of industry, including puritan medical products, abbott labs. Some of these incredible companies produce rapidly for us, and their product are here with us this afternoon. These were literally just developed. These are the best machines, the best equipment we were in the world, and other countries are calling us and we are trying to work as much as we can not only on ventilators but also with testing we continue our tireless effort to begin testing in the most underserved communities. Leadingrivate sector, retailers are now operating over 240 testing sites across the country, and that is in addition to all the other sites that we have working. Located inse are communities with unique vulnerabilities. There will be more than 300 sites by the end of this week and retailers are making plans to open up hundreds more locations within the next 30 days. These additional sites are helping us ensure access to testing. My administration is fighting relentlessly to protect all citizens of every color and creed from this terrible virus. In addition to vast amounts of testing supplies, my administration has partnered with the private sector to coordinate the delivery of more than 90 million n95 masks. These are of the highest quality. Many are made here in the United States. 180 6 million surgical masks. Likewise, many are made here. Shields, 21ce million surgical counts, 10,000 ventilators. We are building thousands of ventilators across our country. This Global Pandemic has inflicted great pain and hardship on our people. It should have never been allowed to happen. It should have been stopped at the source. Life thefor every virus has claimed, and we share the grief of all of you who have lost a loved one. That goes worldwide. 184 countries at least. Thanks to the courage of our citizens and our aggressive strategy, lives have been saved. If you look at on a per 100,000 part, we are at the best of the pack, right at the bottom. Germany and the United States are leading the world in lives saved per 100,000. For every challenge, hardship, and danger, america has risen to the task. We have met the moment and we have prevailed americans do whatever it takes to harness the energies we need to achieve a total victory. Day after day, we are making tremendous strides with the dedication of doctors and nurses. These are incredible people, brave people. These are warriors. With the devotion of manufacturing workers, food suppliers, and with the profound patriotism of the american people, we will defeat this horrible enemy, we will revive our economy, and we will transition into greatness. That is a phrase you will hear a lot because that is what is going to happen. We are going into the Third Quarter and we are going to do well. In the Fourth Quarter, we are going to do very good. Next year, i think we will have one of the best years we have had. There is a tremendous pentup demand. It is a demand like i dont think i have ever seen. It is a pentup demand. There is a spirit in this country like you have seen. I think you can say and we have helped a lot of the countries a lot. There is a tremendous spirit all over the world to beat this terrible, terrible thing. We are transitioning to greatness. Thegreatness will be in Fourth Quarter, but it will really be next year. As good as we have done him and we have done great. We had the best economy in the history of the world, not just here. You can talk china you can talk any other country. We were going for numbers, whether it was unemployment numbers, employment also, a little different, where we had our best numbers. Almost 160 million people. We had the greatest stockmarket numbers ever. 42 days where we set records. In a short period of time. Military, all built in the United States. 1. 5 trillionplus. On the southern border, the wall is being built rapidly. Now, you dont hear the opponents talking much about the border. They dont like to talk about it because it seemed we are right on a lot of things. One of the many things we were right about is the border. We had one of the past weeks in the history of our border between the United States and mexico. We had very few people coming in almost record low numbers. The wall is being built. It is being built rapidly. People dont talk about it anymore. The area where the wall has built, we want to be up to 450 by early next year. Overshortly after that, 500 miles will be completed. He has had a tremendous impact. Again, we have had the best numbers. Is last thing we want now pandemic is for people to come across our southern border. We are doing record numbers, meaning record low numbers. I want to thank everybody and i want to introduce the admiral. Then brad smith. They are going to do a little explaining as to what we have done with testing. Scarlet you are listening to President Trump speak at a rose garden press conference. He did say that the u. S. Will send 1 billion to states and tribes for tests. Earlier, the white house said they had planned to distribute 11 billion in state test funding. Blackrock will do a stock buyback, buying the shares directly from pnc as pnc will exit its full investment in the company. Blackrock will buy back those shares. It will be about 1. 1 alien dollars. Blackrock buying shares back from pnc. If you want to continue watching President Trump, it is available in life go. This is bloomberg. S bloomberg. Romaine a lot going on with the supply chain here in america and around the world. The Trump Administration looking to develop looking to jumpstart the development of ship factories in the United States. Factories in the United States. Joining us is lisa anderson, founder of a Consulting Firm that specializes in manufacturing strategy and end to end supply chain transformation. I want to start broadly here with the u. S. Supply chain and some of the disruptions we have shutdown,he covid19 a lot of the distortions we have seen as every nation tries to deal with the virus in its own way. What has been one of the weaknesses you have seen, and do you think that weakness could be repaired once we get to the other side of this crisis . Lisa the largest weakness is the misalignment of demand and supply. Small changes in demand are exaggerated as you get further and further into your supply chain. Had more than small changes in the demand with the pandemic. In essence, demand and supply have got completely out of whack. Reverberatingd throughout the supply chain, creating shortages over and misalignment. Yes, we absolutely can recover from this. To get our demand and supply back into alignment. Depending on the industry and several factors. Scarlet so, this bullwhip effect, does that get mitigated or addressed if we bring our supply chains back home . What it does is it brings it into alignment quicker. Of is theffect lengthy lead time that we have asia, and alls. , along theferent steps way, for example, if the ocean carriers have containers where they need to be. Theust eliminates a lot of disruptions happening in between shortens theit lead time. That is what it does to get it into alignment quicker. Romaine how realistic is it . Lets say a midscale kind of manufacturer came to you, a manufacturer primarily relying on asia for a lot of its components and assembly. If they said, help me come up with a way to d