Stabilized but that doesnt tell you what is happening beneath the surface. The 10year yielding 0. 8 . Updates on the outbreak in america. We are now more than 4,600 confirmed cases. At least 85 deaths last night, President Trump vowing to backstop u. S. Industries saying the u. S. Will be power fully supporting those Industries Like airlines and others impacted by the virus weigh will be stronger than ever before the eight largest u. S. Banks announcing they will be jointly accessing funding from the Federal Reserve. There has long been a stigma and they are all doing it together Morgan Stanley being the first bank to do it. We should not take anything away from that decision the ceo also happens to be the chairman of the committee that put this group together that went to do this. Joe. Investors are looking for a substantial fiscal response from washington to try to stem the he can economic damage. Reporter we do expect congress to move today not sure when the senate will take action, we do expect to see the treasury secretary on capitol hill later persuading republican senators to move on that house passed bill they were able to get the technical corrections done last night that they said they needed to do on the house side. There is some concern here, joe, if the senate and house were to adjourn and go to recess, that they might not be able to get those members back to washington depending on Airline Travel and staff. There is some urgency here to getting this done. The senate is also talking about the additional bill. Youve got some like romney suggesting we need to start sending money to the americans that proposal is below the certain threshold. As you are washing throughout the day, the president asked about the market and said the most important thick ng he can o is focus on the virus. The best thing we can do. Thats what i think about. Once this virus is gone, i think youll have a stock market like nobody has ever seen before. You referenced that tweet from the president saying the United States will support various industries mentioning airlines in particular thats the central focus now industries across the entire economy will be impacted by this the question will be wear to draw the line or do you draw the line in terms of all the indices as you think about American Students staying home, restaurants, bars, food courts the president now saying you should avoid all of those businesses and no gathering more than 10 people in terms of the approach you think the president is going to take, there are two schools of thought. One is that he says there are particular industries he pointed outlast night that are necessary for the u. S. Economy that hes going to pick the industries there is another school of thought that and the airlines have made to him, you did this to us. The u. S. Government is saying, hey, we are going to effectively shut down airlines at least internationally. There for, you need to compensate us for that the second example, you have a different situation because then youll have the hotels and restaurants and Small Businesses too. How do you see him trying to work through that argument it is entirely uncharted territory. There is this sort of free market conservatives around the president that dont like the Government Support but this is an entirely new situation. You have lines being bent every which way. The other is that you might need to do something across the entire economy entirely unprecedented not sure how that will work but put the full faith and credit behind this economy in some fashion. Everyone is going to be hit. It would be easy why i to go down the list. You can imagine about the social frustration that would unfold from a process like that youve got to think as clear as possible not clear where congresss head is on any of this. You saw the block of the consent on the fix bill. Even individual members can sort of throw gum in the works here and decide that this isnt good enough for me. Youve got people in all different head spaces right now. It runs the political gammut. People saying back in the financial crisis, people brought that on themselves at the same time, i hear some people saying, you got a tax cut, you spent a trillion buying back stock they dont have much even this is being politicized at this point. Sure. And look at the cruise lines a lot of them are not headquarters in the United States they avoid many u. S. Regulations. Is that going to be a popular move not all but many of them are in that bucket. And banks buying back stock instead of investing there is going to be anger and frustration here but we also need to have a u. S. Economy. If you think the experience of 2008 is something that will make it more likely or less for congress and the administration to Work Together i thought in the early days of this, the 2008 lessons would be again what is the appropriate role for the taxpayer here every day has been a new political universe we cant predict where we are going to be by the end of the week this is not a situation that these companies brought on themselves because of Miss Management or because of the situation where the Natural Disaster has struck the entire country simultaneously this is katrina but sandy and 9 11 all at once and then some specifically looking at those examples, 9 11 and on that list, you start thinking about, the equivalent of a national bridge loan for every Company America that is a several trillion dollar package, by the way well see where it heads we remember what happened with tarp didnt happen right away im hearing again that United States eventually does the right thing after maybe not necessarily. I dont know whether i agree with that sentiment. Someone said churchill said it yes they said it a couple of times before i cant imagine anyone needs anything more right in front of their nose to see that you dont need politics or delaying this time around. I cant imagine we need to see things get worse maybe i dont know that everybody is there yet. Im with you and i agree that every 24 hours this looks different. In terms of what people are willing to accept in terms of social distancing and what we are willing to think about in terms of how long this will last the comments maetd by the president yesterday where we talked about the time line, this idea of being july or august situation is so much longer than i think is, a, in the market even today and, b, that the public has any appreciation. So many people think this is a twoweek situation or a month situation. This is going to be a multimonth situation. The he ceconomic cost during ths going to be real tweeting about it late last night, there was a study that was done saying worst Case Scenario, this is something that lasts 18 months thats one modelling well talk to Scott Gottlieb about what he thinks the schools that say they will be closed for two weeks say theyll reassess that in two weeks. I dont see any of the schools just being closed for two weeks. I dont know if we can stay this way for 18 months im not sure when anyone finishes how is this working is it working out. You guys are at home im at the studio. I have no one to blame if this shot goes down by many myself it is way more complicated. Im not wining. I heard you coughing before stay where you are i sneezed too but they say thats a good sign lets talk more about the markets. As youve been seeing, futures are indicating up about 384 points theyve been all over the map. Futures were up and we saw them get back above the flat line people watching and wondering. The president of Wells Fargo Investment Institute tom kennedy is with fixed income at Jpmorgan Private Bank what are you thinking after the dow turned in its worst performance after 2007 good morning. I would say yesterday was particularly disorderly. We saw it across the market. The vix closed with the alltime high of 83 history tells us you are not going to find a bottom i think we probably have some more testing to do that would be consistent with history. There is key support of the s p around 2,350 well probably have to come close to testing those once or twice. If that fails, you are probably looking at Something Like 2,100. What you are experience, the social distancing is becoming the economic disease because it is shutting down the whole economy. We are not separating winners and losers at this point the markets are just looking for liquidity, stimulus and solvency at this point. If history tells us that the vix is at the highest level, where is this . The highest that it has bottomed has been at 77. You want to see the vix fall back down to the 50s or 60s, which suggests some type of stabilization. You cant do it when you have these kind of extremes it implies 70 to 80 of daily moves. Tom, we are looking at the yeelgd sitting at 7 or 8 . It sounds like a more stable level. There have been so many questions about what is happening in the credit markets. What do you see in fixed income right now . Fixed income is having some Challenging Market functioning issues if i take the big step back to look at what policymakers are dealing with, they are fighting battles on two fronts. Battle one and battle two which in the segment prior, you were talking to happening you now and with policymakers with inability to suggest to markets the fed has cut rates in the last few weeks theyve not followed lower that is creatingproblems in th case of bond purchases relative to qe three is incredible introducing a lot to the system. Stepping it up on that side. Would you advise any clients to actually buy Corporate Bonds at this point . It is a time to log in to high yields what is in the price is what we need to think about in the market trading at 900 basis points you are getting the thought market like we saw in the financial crisis you are getting compensated for the risk there that doesnt mean the expense cant go wider if you are a long run investor, thats a place you can get for the returns. It feels that most are effectively betting on policy and what is going to be the rescue package or will there be in what looks like for the broad based. Well talk airlines in a moment. Delta right now is trading with a market cap of 22 billion. Unless you believe the u. S. Is going to come in and give them a deal how is the investor this morning, how should you even begin to think about that . A couple of things. One, we know the bill running through right now, scoring at about 100 billion i do think there is two more behind it. Think schumer or the white house in this 750 to 800 billion simultaneous is some kind of targeted relief that comes more in the working capital lens and maybe it comes in broad based into Industries Just to support them saying we could really use 58 billion in working capital we could work with the market with price discovery here. Thank you it looks like futures are indicated up about 450 points. Continuing that conversation about u. S. Airlines. They are seeking a paj package from the government. They are talking about demand and southwest saying when you blook at the bookings it is quickly moving down to 68 s. That gives you a sense of how much demand is off looking to 28 of their available seats. They have also instituted a hiring freeze. Delta and american, according to reports overnight, they are looking to secure shortterm loans. The amount remains to be scene this is an indication that airlines wants to be sure the liquidity at least in the near term of the plunging market in terms of the people who want to take a flight. When you look at the request they came out with a package that said look, we want 50 billion for the airlines, 8 billion for the cargo operate yorz the airlines also want money because they are receiving less revenue. They believe they should receive 10 billion. Airbus will be closing down its plants in spain and france for four days. Spain and sfra france are in lockdowns. Theyll be shutting down what about boeing . Remember, they have six cases at the plant. The Credit Rating down to triple b, two notches above junk status the concern is cash flow well show you this fiveyear chart below the shares when denis mull Denis Muilenburg took over four days does not seem like a lot do you think well see this with other industries as well yes they want to continue production as much as they want to make sure people will safe but they also want to keep production youve got a lockdown in terms of people moving around in spain and france the question for boeg and auto manufacturers is what happens when you have a case in a particular facility. In this case, everett said well be working with officials where the plant is located at this point, boeing said the people out in the seattle area have said it is still safe to continue production. They obviously do a keep cleaning this question is going to come up not only for boeing but for all manufacturers, what do you do when you have several hundred thousand people coming in and out of production facilities ive been thinking about boeing, i know we came up last week after the oneyear anniversary for the 737 max being grounded doesnt that mean airlines could at that point decide to cancel a raft of orders with airlines facing these decisions, nobody wofr sooun assumed a week ago what happens if everybody cancels their orders take a company Like American Airlines that is still scheduled to receive 737 maxes when their come times to receive a particular aircraft lets say late in the third or fourth quarter. They want that theyve said, i would rather take a new airplane, retire the old plane, sell it as opposed to saying, no, i dont want the 737 max but you are right. This brings up questions for airlines who may not have a decent Balance Sheet the believe is that you have airlines that will be weaker around the world and some of these will say, we are not taking delivery. Or well take deliver and work on new terms here. I just wonder if thats a huge issue lawmakers will wonder about. When you you are looking at industries, this is one they care about a lot that may be something you work in if we are going to fund an lines, that means you cant cancel these orders. Boeing is talking with lawmakers and the Trump Administration about some type of relief. Not just for boeing but for the industry all around. The supply chains, Companies Like spirit arrerosystems theyll need some backstop from the federal government at least that is the early discussions taking place stay with us. Well bring in ron epstein on this ron, i was on a phone call yesterday who thinks this company may have negative value. What do you think of that . Caller if you do a valuation of parts, you can convince yourself easily between defense portfolio. If you were to assign zero value to the boeing commercial aircraft, youd get something around 100. Having negative value doesnt make sense right now right now, looking at how this company is trading, what do you think the expectation is what kind of policy response it is hard to believe the stocks are at these prices. If you do believe there will be a bail out, what kind of strings will be attached one of the key things people look at is the liquidity of boeing theyve got about 23 billion liquidity. You have a rare deal and the dividend that gets 32 billion of liquidity. When you look at how much cash flow boeing has. It is upwards of 35, 36 billion. What is their run rate boeing has been burning through billions a month if you were to assume all those airplanes canceled they could afford to do that. If you look at what boeing has on their Balance Sheet for a rainy day, it is pretty significant. Ron, when you look at the backlog not just for the max but for all orders, how much do you believe is threatened by the coronavirus and what we are seeing around the world . When you think about it, you have to think about wherewith the airlines are positioned. The stuff that is much closer for delivery, that stuff is probably reasonably safe when you walk out a little bit, airplanes can be deferred. Airlines follow two Groups Airlines that want to renegotiator cancel things on a shortterm basis. Looking at the bag log, could a third of it, 25 be at risk . We have to run but real quick. Do you believe there is private money that would support a bridge to the likes of a boeing or an airlines industry. Whether there is a private market that would jump in with rates that would make sense . I do ultimately particularly for boeing. It is a longterm growth you have to believe after this passes, the world will travel. Im asking do you believe there is private money out there today that would lend money to a boeing or to the airlines on any reasonable Interest Rates . A reasonable rate, youve got to think about it this way on the boeing side, i can say, yeah, i think there would be the airplane lines are a broader session. Airlines are talking about globally laying off. Boeing isnt talking about laying off anybody right now their talks with the government are around the entire industry not just themselves. They are looking for the whole field. They are much more concerned i do believe on the boeing side there would be private money at a reasonable rate. The airlines, thats a different question ron, thank you. Phil, well be talking to you, so thank you joe . New bank stocks are rebounding a little bit. The sector now down 35 in a month, will ford frost joins us now with more. I have no idea where you are but good morning like many of the team, the bank as you said got slammed closing down 16 now down 45 worse than the s p 500 they came later. As the banks took the step collectively spending the buy back more action from last night as well they announced for Financial Services again, they were all tapping the discount window. Saying their members have, quote, substantial liquidity and using other Financial Institutions in the past, there has been a signature mstigma the