Market. Stocks,ed to the value financials, small caps. Still with us, george perks of bespoke embedded spoke investment group. The rotation that faded today, today, justifiable optimism that will eventually be outected in the data months . I think the biggest question is whether banks can get their acts together for me trading perspective. They have lagged to the markets so badly. Beta than ther economy overall thanks to higher capital levels, regulatory approaches. So it makes sense it would not necessarily fly right to alltime highs over the past couple of weeks. So fact that there has been little participation of the banks is of concern. Kb, i put together a chart yesterday that showed i think no and than four 20 rallies and fourines since 15 declines since march. A strongern see series of higher highs and lower lows for banks, it is hard to imagine how firm the economys footing can be as opposed to flows and sentiment. The stock market is not the economy. Hesitant, looking at bank stocks or other industrial names and saying, while they are up one day or the next day without any sort of larger trend higher, that is a problem for where the overall economy will go. We have some really good improvements in breadth in the s p 500. The percentage of stocks trading above the upper Bollinger Band. A large share of stocks doing stocksans a lot of ripping higher. It is almost as high as it has been in the past year. That is a really good sign that the market is moving up broadly. How much the economy can fall through is largely dependent on bank stocks. Romaine that Bollinger Band comment is interesting. A lot of folks have been pointing to that. A lot of folks also pointing to the breakthrough yesterday and the retracement. How much stock do you put into those Technical Levels . George i think most of this rally has been dictated by flows in sentiment. People getting too pessimistic back in march. I think people could argue that i was one of those folks. Getting too pessimistic about the equity market, a very shock and all policy response. Think, as the equity rally can continue a lot longer than people think it can based on flows alone. Of course, if those dry up, that is a recipe for another big shock. As people manage their risk within those technical parameters. That said, if you already fundamental investor, the pain in value is going to continue. Value has gotten crushed for a long time. You have to feel for somebody looking at a discounted cash flow analysis of stocks. Where i sit, the theme of the months is that you can throw that out the window and if it goes higher, it goes higher. I am not here to say that the market is broken or is wrong or Something Like that. But there definitely has been a technical uptrend and it is hard from a Risk Management perspective to say that aggressively rather than look past valuation. Romaine we want to thank george pearkes. Some breaking news crossing the wire. St up, alto beauty, the ulta beauty, the big cosmetic retailer, down comp sales for the three months ending in april. This is slightly worse than expectations. The q1 loss per share coming in at 1. 39. Board, things lower for ulta. Company,loud computing pretty much in line with estimates with estimates. 4. 8 billion to 4. 9 in. The estimate on average, 5. 3. Previous forecast, 21 billion. Estimate, 20. 6 7 billion. Pretty much up and down the line. Those numbers are pretty much in line with expectations. Scarlet we are still waiting for nordstrom to come out with results as well as cosco. President trump, signing the executive order, did say that the administration will regulate , as the230 shield president seeks to narrow good faith in terms of how companies are protected from liability. Nordstrom First Quarter net sales dropping 40 in the first period. Loss per share was much wider than anticipated. 40 in net sales for nordstrom. This is bloomberg. Romaine broadcasting live from new york to our viewers worldwide, this is whatd you miss . Scarlet we saw u. S. Stock indexes erase earlier gains and all close in the red, led by the russell, off by 2 . Nasdaq closing off after President Trump said he would hold a News Conference tomorrow and discuss china. That raises all kinds of concerns about rising chinau. S. Tensions. Romaine salesforce shares down in afterhours trading. Q1 numbers largely in line with estimates. They did revise the forecast for q2, fiscal q2, and full year numbers. The Digital Transformation coming out of the pandemic. It appears that some of the sales at least in the short term. Scarlet thanks for that. Lets get to what is going on between china and the u. S. This National Security law on hong kong, now the president of the United States plans to hold a News Conference tomorrow to discuss china. Lets get the market perspective from Brown Brothers harriman head of equity strategy. What did the markets fear in terms of what President Trump could say tomorrow . What is the worst Case Scenario and best Case Scenario . I think the worst Case Scenario, trade restrictions. 2019, a socalled trade war between the two largest countries and economies in the world. Obviously, the last time we had tariffs, back in the Great Depression with the smoothawley act. Another round of trade tensions, tariffs, restrictions. That is the worst case. The best case, some sort of limited action. You probably saw overnight, the u. S. Is talking about expelling Chinese Students with ties to pla. The problem with these sort of tensions is that tempers can happen, and i can fear this can turn into a much titfortat thing. Ok in 2019 when the Global Economy was relatively strong but in a recession, this is the last thing you need. Romaine for those people out there trying to prepare for this, tradeoff this, how much can this action on a political level translate into some pain on an economic or financial level given that tariffs are already in place and relatively high . I think the key factor is that this is coming at a time when we are already in a global recession. We just really have no margin for error. We saw how markets have been impacted by these kinds of measures. Headlinedriven stock rallies and selloffs. To me, this is almost a replay of that, coming at a much worse time. China has been quiet, not responding back and forth. I think part of that was the fact that the chinese leadership was going into the National PeoplesCongress Last weekend and did not want to roil the market. I think the gloves were off. But i think there will be a much more direct confrontation going forward. This can easily spill from the political realm into the economic realm. Scarlet and the Financial Markets realm as well. We have seen offshore yen at new lows. Markets repairs likely offshore yen . It is funny should ask, i think this is the only way you can see it. Myself and other investment specialists are bewildered that the market is shrugging this off. ,f you look at hong kong dollar you would not think there are any tensions between china and hong kong deal the way it is being affected is the yuan. It is puzzling. To me, that is like canary in the coal mine. I would say those are the two pairs to watch. I do think they are the leaders. If these tensions ratchet up, i think some of the other markets will sort of revert to form. Soften, japanese yen, swiss franc would probably gain in this scenario, and the dollar as well. Romaine how much of a defense do you think we will see the pboc make on the yuan . Policymakers have really been trying to tamp down on turmoil. Yuan is weakening, but they are not feeding into the weakness. They are kind of leaning against it. See,he markets, as you can believe otherwise, and they have been taking it much higher on the expectation that they are going to worsen. Win thin, appreciate your perspective here. Will be on the lookout for other currency pairs. Was speaking, the white house said that President Trump at sign date social Media Executive order. He was of course upset without social media had slapped some factcheck links to his tweets. The administration will regulate the section 203 shield. Romaine revenue, 37 two 7 billion versus an estimate of 37. 05. This should not be much of a surprise given that the company does provide those comp sales. Fx. , that includes gas and this is bloomberg. We dont want to see consumers, small business, big business come out of this in an indebtedness position that is unsustainable. That is why i think you have seen a number of these programs, that they have been structured in a way that they have grants or aspects of forgiveness in them. The government is thinking about the same thing. We dont want to end up with an economy where our consumers and business are saddled with untenable levels of debt. We have to be mindful that going into this, the u. S. , from a position of strength in terms of rates,nomy, growth employment, from a monetary and fiscal perspective, not without some challenges. Low rates, negative rates in some places. Not a lot of things on the monetary front that could be used with highimpact today. Fiscal programs being put in place in terms of main Street Lending programs that are out there. The level that some folks would say balloon the feds Balance Sheet. We have to be mindful that we do not want our government or other governments to come out in a position where the debt at the federal level is untenable because, again, we are likely to be in this Slower Growth environment for an extended period of time and we have to make sure we have created that allans for people to continue to have confidence. Mind, how does the government exit . There are some people who say the government does not need to. Embrace the debt, modern monetary theory. There are others who say, as soon as it is practical, we will have to raise taxes, start to chip away at the mountain of withthat we have created regards to doing the right things to fight this crisis. As you look at this, we have period this extended policy,acks monetary not just in the u. S. But around the world. If you look at the fed Balance Sheet coming out of the last financial crisis, they were on a trajectory of getting that back down to levels people would be more comfortable with. As we try to get to the other side of this, it is going to be back on the table. Is a couple of things, one that the u. S. Does continue to be the worlds preeminent reserve currency. A very Strong International borrowing base, and therefore has capacity. I think the second piece of it, lulledont want to be into a false sense of complacency, but the low Interest Rates impose a cost. I think weve got to be prudent, we have got to be mindful in levels of our indebtedness and we have to have a trajectory to get it back to a sustainable level over time. But i still think we are in a reasonable place right now. It depends how long this goes on for, what needs they will be in the future, what kind of commitments it will take. Citigrouphe ceo of speaking a little bit earlier there on bloomberg television. Just a few moments ago, President Trump did sign that executive order on social Media Companies that he had been talking about. We want to bring in and brody, our bloomberg lobbying reporter, to kind of break down what exactly this is. The president sort of bills this as a means to i guess remove a liability shield that has kept these Companies Free from certain lawsuits if they allow things on their website to remain up even if that information is false. How much legal standing does this executive order order have with regards to overriding any existing laws on the books . Trump is kind of going out there, but i think the truth is a little bit more delicate. Thelaw is section 230 of Communications Decency act. Protects online platforms, Communication Companies from liability from lawsuits for users posts that they leave up and users posts that they take down in good faith. What trump wants to do, at least according to a draft we saw last night, he wants to charge the federal Communications Division with defining that good faith. He said, maybe it is not good faith if you dont offer people long enough to respond to your charges that something is wrong. In legalrt of Uncharted Waters here but it does seem like there are probably significant problems with that approach as well. The fcc is an independent agency. It does not have to take the white houses orders. And it does not under the statute have very much rulemaking power here. A very it does send powerful signal, especially to the president s base. Talk a little bit about the political context for this, especially when President Trump threatens twitter on twitter. That i cant get over it. Ben it bears mentioning that twitter is trumps communication strategy as a politician and has been from the very beginning. It is probably a huge part of why he is as successful as he is. I think the issue here is really , what we are going to be doing with section 230, there has been pressure to change it from all over. I think he wants to come down on it now because conservatives feel that they are being silenced online. They constantly are alleging that their views are being silenced. He wants to feed into that. I thick it is important to say also that we are dealing with a massive coronavirus pandemic. It is fresh in the economy, potentially making it much more difficult for him to get reelected, so in some ways it feels like he is changing the topic. Scarlet thank you for providing some muchneeded context there. Coming up, we have leadership live with David Rubenstein. He will be featuring his special guest, the youtube ceo. This is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Scarlet lets give you a recap of some of the earnings in the past 30 minutes or so. Nordstrom reporting a drop of 30 in First Quarter net sales. Many of its stores shut down and it had to rely on online sales. Analysts were looking for a loss per share of 1. 34. A pretty massive deficit and a devastating drop in terms of percentage decline in sales. Romaine salesforce shares moving lower on the day, 3. 3 after hours. The company did revise its forecast for the fiscal Second Quarter as well as the full year. It had seen 21 billion as the number. Analysts were expecting 21. 1 billion. That seemed to be enough. Scarlet really good perspective. Inco shares are moving lower after our trade after it reported fiscal thirdquarter Sales Revenue came in at 37. 2 billion, higher than what analysts were looking for. Turn er share analysts were looking for 1. 92. The previous years number was two dollars, five cents. It had to reduce the number of shoppers in its stores and reduce the operating hours because of the pandemic to keep people and employees safe. All of that taking a hit on its bottom line. Romaine they did report revenue of about 21. 9 dollars, little change from a year earlier but enough to give shares a little bit of a boost. The company did say they generated profits of 1. 34 per share. A big beat at least on that metric. Vmwareto point out that is up about 6. 4 . Dell, the largest shareholder. You tend to see those Companies Move in tandem together. Costco, wee thing on were talking about how orders were driving up the shares earlier in the quarter. Once people got their fill, bought all the toilet paper they needed, paper towels, canned soup, it turns out they did not need to go to cosco as much. Lets turn to leadership live with David Rubenstein, featuring conversations with Business Leaders navigated the unprecedented challenges of coronavirus. How is the online video giant policing misinformation . Leadership live starts now. If this isme ask you the best of times or the worst of times for Companies Like youtube. The best of times, a captive audience. Times because advertisers are not advertising as much. Which is it for you . Susan probably both. It is a difficult time for everyone. The other hand, we have seen that youtube has a different role to play, delivering the right information to People Associated with covid19, connecting them to their communities. Youtube has really been able to connect people, whether it is religious, social, or information. How did they fix things in their house . We see so many kids out of school so youtube has been an im