7. 5 . Is up more than a test flight about to get underway. The 10year yield, 64 basis points. Lets get a deeper dive into the market action. Kailey i want to take an outside view. This is the fourth consecutive day we have moved to the up or down signed by more than 1 on the s p 500. We have not seen this since back in april. Look at where we have gone in the past 21 trading days. 3 . Y more than 6 , down by now we are essentially flat over that time period. I want to focus on todays session, you mentioned it is the dow outperforming, up 1. 3 . That is largely thanks to boeing. Boeing is up nearly 8 today on approvedafter the faa a critical set of test flights for the 737 max. This is not just good news for boeing and the potential recertification of that jet, but suppliers as well. You see the likes of raytheon and General Electric higher as well. Iifting away from equities, want to look at fixed income. We are quickly approaching the end of only one day to go. We are looking at the Bloomberg Barclays treasury index. It is up 9 so far this year, the best firsthalf performance since 1995. That reflects a certain pessimism about the economic outlook. Vonnie not that much pessimism when you look at the markets, so good to know that there is some baked in. Thank you. One of the biggest areas of dislocation is in housing. Forcedas a lot of selling, which our next guest was quick to notice. Ceo and managing partner of Kayne Anderson real estate. Welcome. Explain what you see with default rates now that the fed has stepped in and the situation hadnot have been as dire, the fed not stepped in. Prediction one a default rates, but as you point out, they will be lower than anticipated in march, april. I wouldnt take a bit of a contrarian view in that i think the fed should have been more patient with some of the actions taken. Ve i know i am on here partly because we were able to take advantage of late march, early april, dislocations that we saw in the real estate market, which worked out well, and i would love to be wrong about the fact that i think there will be second and third legs down, and this little longer than at least what the equity market is anticipating. But i would reiterate, i think the fed did not allow us to come anywhere near the precipice, and has potentially set of a moral hazard dynamic by essentially putting a put option on asset values. Vonnie you referenced a trade. Could you talk about the freddie mac debt trade that paid off handsomely for you in march . We had been anticipating a recession for a while, stayed quite liquid. In late march, early april, when mark to market margins came into play for many hedge funds and mortgage reits, we were liquid and were able to quickly react and acquire freddie mac bonds, primarily mezzanine bonds, a very safe part of the freddie , and very deepck discount because of liquidity dynamics that existed in the market at the time. Frame really a 2. 5time from march 18 until april 3. We acquire approximately 3 billion of freddie mac bonds in that timeframe, plus or 30 discounts to notional value or par value. Vonnie that was a steep discount, but is there more to go . Al i think there is more to go. There has not been over the last six to eight weeks. The fed stepped in, announced they are willing to acquire a number of different asset classes. That has put the brakes on distressed or highly motivated selling for time being. I dont think we have seen the end of this by any stretch of the imagination, although i will hasten to add, i would forgo from profits to be wrong because that would mean the world and the pandemic is a parfar better place than i expected to be months from now. Coming back to that trade, part of the dynamic is, the turnaround was so rapid, we anticipated acquiring at a discount and selling in a one to andeyear timeframe at par, we were able to sell within three months at par. Vonnie that is a shortened trade position. So what happens now . We are seeing contract signings come back a little bit, not as bad as anticipated. Residential may be holding up. Senior assisted living, Student Housing, commercial real estate. What is the outlook in those areas . Office,re in medical Senior Housing, Student Housing. The heaviest concentration is in the medical office. That will be a shining star in this downturn. Deferral request, delicacies, very few defaults, which is why we invest in that sector. The Senior Housing side, although hammered in the press, the high end of the Senior Housing sector, independent living, has fared very well in our portfolio. Actually has only seen a 3 decline in occupancy with no delinquency. We expect Senior Housing to emerge high and Senior Housing to emerge from this pandemic stronger than prior to the pandemic, primarily because of enduring demand and significant supply constraints. On the Student Housing side, while faced with a challenging 20202021 Academic School year, we think stews and that Student Housing will come out of this. Brand name universities with enduring brand name growth. When you look at 2021 and beyond, those universities will be very wellpositioned. In fact, you will have not just people enrolling for the 2021 Academic School year but you will definitely have some deferred demand because there are a fair number of students that will elect to defer this year and instead go to 2021. Long story short, we think if you are in highquality properties in strong markets, you are going to two quite well on a longerterm basis. We are obviously in a difficult time at the moment. Vonnie i know you are not willing to give us the level of defaults you are making into your ownarios for portfolio, but what about postponements of loans, any other concrete metric that you can give us as the outlook for commercial real estate in general . Al i am willing to give you statistics on our portfolio where we dont expect to see any defaults on the debt side. On the equity side, where we own assets, we expect to see a very quick recovery. The housing markets overall, i think, you are going to see continued strength with pockets of weakness. 2009, i think08, you are going to see fewer defaults than you did in that timeframe. Vonnie a pleasure speaking with you today, al rabil, Kayne Anderson real estate ceo and managing partner. Lets get a check on first word news with Mark Crumpton. Mark a divided u. S. Supreme court today struck down a louisiana law that impose limits on doctors who impose abortions. Justices defied expectations by reinforcing reproductive rights. Chief Justice Roberts provided the crucial vote, joining the liberal justices in the 54 majority. China picked up the pace of buying u. S. Goods last month but imports are still far behind what is needed to meet the terms of the phase one trade deal. By the end of may, china had only bought 19 of the target of more than 70 billion worth of goods this year. It plans to speed up purchases of American Farm goods. Here in new york city, broadway will remain dark for at least the rest of the year. Many shows are signaling that they dont expect to return to the stage until late winter or early spring. Broadway stopped performances on march 12, the longest shut down in history. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. It is time for the latest Bloomberg Business flash. 8 , a of boeing are up critical set of test flights for the 737 max are underway. Regulators gave the goahead after viewing a Safety Assessment for multiple fixes for the plane. Been groundede for more than 15 months after two fatal crashes. Amazon will give bonuses to most frontline workers. They had been criticized for ending its pandemic hazard pay. The bonuses will cost the company 500 million. Shares of Planet Fitness falling. Reports that 200 people that went to one of the gems in West Virginia may have been exposed to coronavirus. A client tested positive for the disease. Many corporations are taking big steps to increase diversity and inclusion as the fight to combat inequality continues. Caroline hyde spoke to the dow chairman on the need for diversity and tolerance. The elected to stay in closet for a long time in my career, but after coming out, i can tell you, physically and mentally it takes a toll if you do that every day. What we are trying to do is eliminate that from people, lift people up. Tune in for more of that interview at 2 30 p. M. Eastern. We are continuing this conversation with derrick johnson, the president and ceo of the naacp. That conversation is coming up next. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Townsts continue in small and large cities across the globe in response to Police Brutality and racial injustice. It is leading to calls for deeper examination of race from main street to wall street. Joining us now is the president and ceo of the naacp derrick johnson. Can i ask you about the house passed bill, George Floyd Justice in policing act, which was then blocked by the senate. Is it too late in this congressional term to advance any further . Do you imagine that it is dead . Derrick i think there are still opportunities for a negotiated ill. The house was able to pass a bill. Im looking forward to leadership from tim scott to be able to step up and get past some of the blockage in the republican party. I would hope speaker mcconnell could get past partisanship and understand the urgency of protecting all communities and ensuring a more accountable Law Enforcement agencies across the country. Vonnie in new york city, mayor presented to the council a budget that will be voted on that takes away a billion dollars from funding the police to other uses. Can i get your reaction . Derrick its an opportunity for all of our Police Agencies to evaluate the priorities of the city. We have put in place preventative measures to ensure the communities are provided opportunity. There is no need to continue to increase budgets. We have seen a sharp decline in crime over the past 30 years, yet the budgets of officers have gone up, and not necessarily the pay, while at the same time, support for Mental Health, homeless, many of the calls police get, are not there. We should be looking more at prevention. It is cheaper, more effective, and it would allow our officers to focus on priorities of crime, not providing social services. Stepe what is the next for the naacp on this front . Obviously, it is difficult to move things along in the senate right now. What concrete action are you taking . Derrick we are engaged in the current conversation. There is still opportunity for a bill to move. We have to get past the partisanship conversation in the senate and focus on what is in the best interest of this nation. How can we maintain an accountable Law Enforcement presence across the country to make sure that officers are not moving from one agency to the next as bad actors . To ensure there is a conference of database. There are some tangible things we can do, if we can get past partisanship in the senate. Vonnie do you consider moves that have been made in municipalities in the past couple of weeks, days, as wins or just move the dial slightly on something that is much bigger . Derrick it is a department by department evaluation. Basedou have communities in trauma, you need more social workers to address that trauma, not more officers to accelerate that trauma. When you have a Severe Mental Health crisis across the country , particularly from our military veterans who have come back, we need more Mental Health professionals to provide support, not Law Enforcement agencies. When we have those agencies understand the dynamic of their communities and make the necessary adjustments in their budget, that is an advantage. But it really is an agency by agency evaluation. Vonnie we have been seeing since friday varies companies deciding to pull the advertising from facebook. It started with one company and now there are a dozen or so companies doing the same thing, for reasons that you outlined, partisanship, some eight speech, and facebook is not hate speech, and facebook is not doing enough to eradicate that from their platform. Do you have a take on this . Derrick we have been in conversation with facebook, mark zuckerberg, sheryl sandberg, for over two years. It is absolutely vital this platform take the necessary measures to address white supremacist activity and racial hatred on the platform. We have seen in the last month individuals meeting on facebook and plotting the death of officers. Used tothe platform was subvert democracy in the 2016 elections by allowing a foreign nation to purchase ads. It is a necessity to put guardrails in place so that cannot happen. Facebook has the technology. Facebook understands how to address this. They have yet to address this. As a nation, we have to move the question of race above the question of partisanship. Those things should not be equated as equal. In order to protect individuals and democracy, this behemoth of a company that is operating more as a public utility, has to be more accountable. Vonnie when you say you have been talking to the team at facebook, what have they been telling you . Derrick they know there is a problem. In some cases, they might technology problem, but we have not seen acknowledge a problem, but we have not seen outcomes. Organizations, antidefamation league, naacp i been calling for the same to doch for this platform something to protect american citizens, to protect our democracy. They have not done anything. This is a problem with the lack of accountability that we see in a company like this. There is no Regulatory Agency to oversee this. Boardis no stockholder or governance to require certain things be in place because one person owns 60 of the stock. You have a runaway train that is causing harm to the public, causing harm to our democracy. Vonnie before the pandemic, black employment was at its highest in history. Even then they were problems with unemployment and employment in this country and equity. What kind of policies would you like to see enacted to reduce the inequity in the labor market . Derrick we have to approach the policy structure of racism that has been embedded in our system. For example, when Social Security was enacted, it was to the deficit of africanamericans because politicians were able to thatn exemption in there Domestic Workers were exempt from the program. Generations of africanamericans who made up 85 of the workforce, did not even qualify for Social Security. If you look at that example and current, we to the have a lot of examples where the structural damage from Public Policy has impacted our ability as a community to advance. There is not a single money manager participating with the fortune 50 companies or the Federal Reserve. We have to change the way we approach this question. Johnson, naacp president and ceo. This is bloomberg. W . W . Uhiono mark im Mark Crumpton with bloomberg first word news. A grim outlook from the World Health Organization. The who chief said today the worst is yet to come because of a lack of global solidarity. He noted that tomorrow marks six months and the who has known about the virus. He says countries should not wait for a vaccine to deal with it. In florida, the pandemic is picking up steam. The rate of people testing positive for the first time climbed to 13. 7 . The miami beach mayor tells bloomberg florida needs more than it is getting from the federal government. The messaging from washington has not been help everybody else, help yourself. It has been, dont wear a mask, or stand up against this or that. It is so unhelpful. We need direction and leadership. More thanida has had 46,000 new cases over the last several days, the highest since the pandemic began. European Union Governments are getting ready to extend a travel ban for u. S. Residents for at least two weeks, according to a draft decision. The wording of the decision disruptingt the ban business and Leisure Travel across the atlantic will not be lifted until u. S. Authorities control the spread of the coronavirus pandemic. Has issued a warrant to arrest President Trump and 35 others for the killing of the top iranian general in january, according to the iranian media. Inem soleimani was targeted a drone strike in baghdad. It was a dangerous escalation in the standoff between the countries. The u. S. Calls the arrest warrant a political stunt. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. York, onive from new vonnie quinn. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. Debts from the coronavirus are surpassing have a million worldwide. Confirmed cases exceeding 10 million. The World Health Organization reported the most infections for a single day. New clusters around the world indicating the pandemic is far from over. The s p 500 is in the green. Climbing after u. S. Home sales posted a record