That was a sea change over what we have seen the last eight weeks. Francine hyde park was definitely packed as well and on saturday. It kind of goes to the challenges the authorities have as you look at the infections in real time to see whether you can go back to full lockdown. This is what markets are trying to figure out as businesses are reopening but you dont exactly know for how long. Tom it is true, nation to nation as well. Brazil having a particularly tough go of it. Statistically there is much more we can talk about about the economics and financing and also how it all folds into this pandemic. German powell front and center on that chairman powell front and center on that. Right now with our first word news. The Federal Reserve chair says the u. S. Recovery could drive through 2021. He told 60 minutes the economy will recover steadily through the second half of this year, but he said a full recovery depends on people being confident and that may not happen until a vaccine is available. It is the first meeting of the World Health Organizations governing body since the coronavirus outbreak and china will be challenged on two of its most sensitive issues. Those are how beijing handled virus and the status of participation. An investigation into the viruss origin. Thirdlargest economy fell into a recession. Andnese exports plunged 22 the economy is expected to grow worse. Oil rose for the first time in two months. West texas resumed their run after 19 last week. Producers in the u. S. Continued to cut output. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks so much. Level, dowh a 40 futures up maybe 50 or so. The vix come in middling. Ist really interests me pushing against the rich the risk on field. Seen gold elevated, sterling retreats. The swiss franc really wants to put a bid on stronger swiss franc. Francine i am looking at stocks climbing in europe with futures and i think you are right. Crude oil is on the up. Seeing a lengthy recovery depending on when the vaccine gets delivered and not looking just at wti, i am also looking at the pound you mentioned earlier, currently at 2123 but guild is rising. But gild is rising. Tom very good. Is bobwhere in the world nardelli, not only about the corporate work ahead but the tough decisions amid uncertainty that Corporate Officers have to take. Nardelli joins us this morning. How do you plan if you dont have an exit . How do you do a fiveyear plan if you dont know the calendar out to five years . Excellent point. As we all climb out of ourselves out of our shelters, it is the certainty of uncertainty and having lived through several experience,years of the variability based on the business is the issue. If we just pick one airline one for example, the airline industry, atlantic and delta down 80 and that tumbles into boeing where dave calhoun presented a realistic view of the length of recovery but as that business falls away, it tumbles to ge and we saw general election General Electric aviation layoff hightech assemblers in plants around the world. For everyone technician at ge, youve got 10 in the tier one, tier 2, 3 or four. I see this recovery taking a tremendous amount of time. What is going to happen is first they have to worry about protecting the worker. Then as the worker comes back based on seniority and locations and jobs for social distancing, they have to retrain and make sure the quality is there. The Biggest Issue is cash management. Also supply chains. That is going to be the biggest hurdle given disrupt given the disruption we have seen and getting the big industrials back and running. Go in a threes to hour conversation with bob nardelli. We should point out bob nardelli was drawn and quartered as he exited ge and he looked brilliant as he got out from that train wreck. Bob but what areica wants to know is Corporate Officers willing to give up the ratio of before . Tion it has been if we go to a new paradigm, array going to go to a new paradigm with Corporate Executive compensation that is a little bit down from the glory days of before the pandemic . Bob there is no question, we have seen example after example of ceos stepping forward and being first among many to either eliminate totally their compensation or to reduce it in half. My current experience, that is from fortune 100 all the way down to small private equity businesses i am dealing with day in and day out. All of them are trying to lead through example. I think you will see that. I think the new paradigm, to use your word, it is going to be interesting to see if wall street recognizes the work that has to be done by corporations on showing to provide stability in the supply chain which could add to higher costs, therefore lower earnings and will wall street punish those or doing the right thing . They are putting a lot of emphasis on esd. Will they put the same emphasis on supply chain stability to avoid what we are going through right now . Francine what are the chances companies that would be have been provoked that would have been profitable without the coronavirus that go under . Bob that is an excellent point. We were in a robust economy. Unemployment. Profitability. We saw it in wall street. The Second Quarter is going to be a disaster relative to earnings. Ceoson the phone with 60 and they are talking about scenario planning of a 20 hit to gdp for the full year, not just the quarter so they are looking at when we are talking about temporary furloughing of workers, that may be extended because we are finding new ways to work, finding remote, travel and living is going to be impacted. I think this is going to be a very tough recovery with some hard realities. Companies on there the flipside that should have gone under that wont . How difficult is it for companies to get grants to make sure you are not propping up Zombie Companies . Bob we saw that right . Prior to this pandemic we saw some of the Retail Companies that are already struggling and then you look at the retail will see a 67 , we bigger number Going Forward but there were companies on the edge already due to ecommerce. Some of them have just recently filed for bankruptcy. My guess is that is going to purge some of the companies that were on the edge. Unfortunately it will impact a lot of workers. Tom one of the things that people dont understand about a. Nardelli is he takes number two pencil with a sharp point and figures out labor costs. Nardelli, everything critical back from china, we will bring it back into the unit it states and we will build it here. What a wonderful idea. Can you do that with a labor delta . Bob that was my point. As we transition, we might be able to rebalance that Going Forward. Initially we are either going to see higher cost and lower earnings or we are going to see that ugly thing of inflation where the cost is passed to the consumers and the consumers will have to digest that, but it is going to be slow for some time. We are on shoring but lets look at what happens that forced this offshore. I never had an outsourcing strategy, i had a Global Competitive strategy and when you look at the current administration, the support of were,ss, as to where we and that forced the offshore to be globally competitive. Now we will see the realities of a disruptive supply chain and have to bring that back home again. Tom thank you so much, bob nardelli. Great to catch up, the former chief executive officer of home depot. Nardelli talked about wall street. I could go three hours with the former ceo of goldman sachs. We will talk to Lloyd Blankfein later this morning. This is bloomberg. Francine this is bloomberg surveillance. Tom and francine from new york and london. Tomorrow, fed chair jerome treasury secretary Steve Mnuchin will testify before the before congress. We expect them to hold steady on rates. The ecb publishes their account of the latest Monetary Policy on thursday. The annual gathering of the Chinese Legislature gets underway after induced delays. That is what we are expecting throughout the day. To our editorght in singapore to look at the markets and what they are looking for. Coming with ages couple of the indices but in general, what are the markets looking at . Is it Central Banks or treasuries or are they just following the number of infected . The biggest thing at the moment is the u. S. China trade situation. That has overtaken the virus as to what people are watching. To stop has asked tsnc dealing with huawei. The nationalhave peoples conference and china would like markets to be stable. Think those kinds of tension with the backdrop of where the virus blame lies with a president ial election in november, u. S. China trade tensions have overtaken the virus as the main driver. Whether the fed will be forced into negative rates at some point in the future. Theme will ramble on as well. Francine how will the u. S. China relationship move from here . We understand from Peter Navarro that he was saying things like china was sending Airline Passengers to spread covid19. Mark that was some very aggressive comments over the weekend. Mostly balanced. It has become inured to the idea of strong rhetoric and it is whether or not there are concrete measures imposed. It is also whether china responds and escalates. The u. S. Might threaten a lot, impose very minor measures in the market can stomach that. I think there is more focused on how china responds rather than u. S. Measures. Tom good morning. I want to talk about the markets and about Interest Rates and what they show right now. There is this tip from liquidity to solvency whether it is a developing economy, em economies and such. What do you observe when rates move now . Mark there are two things. Talk in the market is which is correct, equity markets or bond markets . Equity markets are saying we might actually get a rebound or something close to that. I would disagree with this whole diversions if both equities and bonds are priced the exact same way and they are disconnected from the economy and both pricing stimulus to keep pumping into the system. Powell says the fed is not out of ammunition. When i look at bond markets, and they have stopped being. A guide for the markets. Used to be the treasuries for the ultimate macro instruments have stopped being a guide for the markets. It used to be the treasuries were the ultimate macro instruments. The shortterm markets dont mean much. The Bigger Picture is more stimulus to come. Tom what do chairman powells actions mean to singapore . Indonesiasia to and to Southeast Asia . Mark that is a very good question. Ultimately it is what the delivery is. He is expected to push back on negative Interest Rate policy this week. If the market intends to beat the intends to lead the fed, if the market does pressure the fed to entertain the idea of negative Interest Rate policy and remember, powell has promised they are not out of ammunition. I think that would be massive for the whole world. That will turn the dollar trend. The index reached a record high the last few months but if the u. S. Will follow europe and japan, if they follow them down that path, i think we will see the longterm turning point in the dollar which will ease financial conditions across the rest of the world. Markine thanks so much, cudmores bloombergs managing editor in singapore. Stick s hour we will we will speak with an economics professor. This is bloomberg. This is bloomberg surveillance. Lets take a look at your Bloomberg Business flash. La 17. 7 billion in the last fiscal year. Theue of investments loss is the worst ever. Another sign of the massive changes coming to the airline industry. Jobs,e may cut 30,000 almost 30 of the workforce. The massive doubledecker planes conceit more than 500 passengers. The Trump Administrations crackdown on huawei is sending shockwaves through the asian markets. Officials call huawei a security threat. On may 15 the u. S. Commerce to specificecided lee dashed his fist decided to specifically target huawei. Ritka investors fear china will retaliate. That is your Bloomberg Business flash. Much. Itka thank you so let me frame the markets for you. I will not give you the details. Chairman powell among other you clearlyng see that with equities. Of yields really coming back will stop the two year yield was lower and it came back higher but against that, there is some serious pushing including gold with big moves today. Francine, what do you see . Francine we are looking at the what gilt is doing. We will speak with the head of blackrock. Francine this is bloomberg surveillance. Good morning everyone. We have been doing expend extensive data checks. Currencies linked to commodities but also gold. Very different for now. I would point out that who meeting. It is the first time we will hear from president xi. That could make or break the situation. Tom im glad you bring that up. I believe the plaited up this morning. Tapedea of this conversation of the president of china speaking to the who, particularly after president trumps criticism and over the speculation the president may withhold funding from the World Health Organization provides a really interesting tension. In the markets, i want to emphasize gold. I went back to the bloomberg earlier this morning and i took the london gold index and i took 1921 when it was 20 announce and there was a bit of a blurb in the 1930s and up we went to the nixon moment in 1973 where gold began to move and it basisnning on untreated to see the new leg up in gold like we saw a number of years ago. Francine i like that you bring it back to 1921. We dont always agree it is a good idea to go back that long because globalization has changed the way the markets look. Ands a way of looking at it there was also Peter Navarro speaking to abc, comments that were incendiary about china. Lets get to the first word news. Here is ritika gupta. Ritika Federal Reserve chair Jerome Powell laid down suggestions that shut down suggestions that played down suggestions that the u. S. Is heading for another great depression. He said the u. S. Recovery could stretch through the end of next year. The Trump Administration stepped up its attack on china over the coronavirus. Trade advisor Peter Navarro suggests china spread Airline Passengers to spread the infection worldwide. China says the u. S. Is lying. In the u. K. , more warnings of the damage the coronavirus will inflict on the economy. The chairman of the u. K. Fiscal watchdog says output would likely be a third smaller. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. , this isa gupta bloomberg. , thank you so much. Crossllege of the holy had an extraordinary month. Not only dr. Fauci and his acclaim as the nations neurologist, but also peter hays coming to the rescue of laurens bank over the future of our municipalities. Is head of minas appellate the work at blackrock and he joins us this morning. I would be grossly remiss in not focusing on your world. How threatened are those be disciplined bonds we own that a . Assured aaa, aa and questionat is a good because a lot of people are misinterpreting this as being bad for the entire markets. It is important to separate out the market. There is a lot of guesswork going into what the pandemic and economic shut down mean for the u. S. And Municipal Bonds. The highyield part of the market, lets leave that alone. That is going to be under a lot of pressure and we see that in Retirement Centers but the breadandbutter of the market, the general obligation bonds, even revenue bonds, you look at fta, it came to market two weeks ago and the deal was oversubscribed and it shows the essential nature of the service, the longterm viability. There is a lot of noise still to come, a lot of uncertainty around all of this including in the minas supermarket but the idea that states may declare bankruptcy or your bonds are not going to pay is just not correct. What has theyes, price of bonds done . Up, what a yield huge opportunity to create total return in california paper. Bonds actuallyal done what have Municipal Bonds actually done . Peter it has been a roller coaster. That is probably true of most Asset Classes when you come back to the beginning of march. We had two weeks where the index up over 3 to down over11 and that occurred seven or eight trading sessions. There was a big snapback because of that total return you talked about as investors recognized the opportunities being created. They stepped back but they havent come all the way back. Yields are still low but when you look at what we have done compared to Investment Grade corporates, we have not rallied back as much. The index back on the year is about flat. Come all the way down now and we are back to flat and it is because get back to your first question around the uncertainty and the impact of what will happen in the market Going Forward. Eight good backstop for issuers, they have not done anything directly in the market and now orhaps over the last seven eight trading sessions, the market feels much more healthy. The state of illinois came to market, oversubscribed and they were able to upside the deal. They came at a premium spread so they are paying for some of the economic pain and some of their credit situations coming into the market but nonetheless the market is clear. I think