Looked like both the house and senate would be out next week and it would be difficult to get anything done fiscally in terms of legislation before next week. The timeline is getting pushed out. Because of that we lost all of our gains. 3 gains in some cases. Then we had some mike pence strategy from the meeting with insurers. At that meeting mike pence said there would be no surprises, there would be 4 million test sent out and there would be no copay. Insurers would waive copays. That gives the markets the idea we are going to get an accurate and quick assessment of those infected and those passing it on. We also heard President TrumpPay Lip Service to the fact that they were looking at the cruise industry and Airline Industry and that has stocks bouncing. The s p 500 up almost 1 . The 10 year yield, 60 basis points. Jim vogel out with some good levels saying there was a cluster around 55 and buying is concentrated in certain areas. It is trading within a 21 basis point range. The yen has given back some of its losses. Not quite as much of a safe haven as it was. Well be speaking with kitty. Ukes and a few moments guy it has certainly bounced back, but for how long. In europe, stocks are negative. We are down. The early gains have faded. We are down. 6 on the stoxx 600. When it comes to brent crude, up around 6 . Onare now only a little bit the bund contract, a little bit higher on yields. Five basis points. It used to be a lot, now it is a little. Nevertheless, we are seeing bunds on offer. Btps are catching a bid. Vonnie President Trump speaking moments ago on the coronavirus, saying progress is being made. Kevin cirilli is live on capitol hill. We heard mike pences strategy, not so much the fiscal effort. Kevin President Trump saying he is perfectly he is carefully paying attention to the cruise industry, though he did not provide specifics. We are anticipating some type of economic agenda rolled out within the next 12 hours or so. Beyond that, youre on capitol hill, top banking officials, including wells fargo testifying in the house of representatives as lawmakers continue to grapple with ways in which they might be able to alleviate some of the pain that has been caused by the coronavirus. The president likely to speak later today in which he will likely give some type of details. Ive spoken with several sources in the Financial Services sector throughout this morning, and all of them are saying the timetable from the white house as well as Congress Remains fluid and there does not appear to be a concrete any type ofow for cohesive meeting that could come this week. Meeting the top wall street executives as well as banking executives are expected at the white house within the next couple of days. Vonnie that is our chief washington correspondent, kevin cirilli. I believe you have some breaking news . Suspendingntal pending news hitting the tape. Occidental cutting its Capital Spending this after the slump in oil prices we have seen since the weekend. A very aggressive move. Its shares to the downside. Yesterday we were starting to chip into that. Unsurprisingly, given the debt this company is now carrying after the deal it did, occidental is being forced to make some moves to try and stabilize the balance sheet. Cutting its dividend and Capital Spending, trying to stabilize the ship. Lets talk about how governments are trying to stabilize the ship. European leaders are starting emergency videoconference right now. Italy remains on lockdown. Ryanair and British Airways suspending all flights to and from italy. The Spanish Government has done the same thing. London is going out with the budget tomorrow. The bank of england as well. We will have the ecb meeting on thursday. Christine lagarde will be on this afternoons videoconference between the eu leaders. Juckes,me on set is kit global strategist at socgen. What are you expecting from governments . It is easier to see positive physical action in the u. K. That it is from europe. Would be al reaction game changer in europe because they find it so hard to do. Because it is hard to do, it is hard to imagine that we get something together that is big enough. I was listening to the u. S. Peace and you get the sense that tocally the u. S. Is likely be good at helping alleviate the economic aftermath. The fight is do we help people or companies . Im not sure what they will do about avoiding the spread and getting enough tests out fast enough. Guy is that one needs to happen for markets to find some degree of calm that we are starting to get around understanding what the extent of the virus is going to look like and how much damage it will do . Kit this is like his nominee rolling from east to west around the world. It will be ons is the others have the atlantic before we are much older. I am not sure what we can do other than wait and see how that plays out. Good news in terms of how fast it is true, low debt rates. Good news at the human level would be genuinely good news in terms of disruption. That is parallel to the other two things. The oil thing and the physical response, government the fiscal response, government policy response. The rates bank is not sure it helps, what else they can do. We are more confident in the u. K. And u. S. That something can be done on fiscal policy quickly. Vonnie i think you put your finger on it. We have the human response ready now, it sounds like it is quite a strong response. There will not be any copays, there will be 4 million test sent out. That is persuading the market we have some idea of the scope and scale of this problem. It may not be wonderful to the insurers. What kind of response would be necessary if it were to be accurately assessed in terms of how big of a problem it is . Kit i think it will require a sizable fiscal easing. Whatever happens, we can see the empty hotels, empty restaurants, empty airports, empty shops around the place. People particularly in the gig economy who will not get paid. People who will not get paid because they are looking after children because schools are closed. All of that needs a response, and you can do it well or badly. That will roll through. It needs to be fast and it needs to be big. Even if it is only shortlived, there are people who are going to be genuinely struggling in quite a big way for a long time afterwards. Vonnie we have seen violent moves in the currencies and treasury market. Now that we have the beginning of response, or the violent moves over . Kit very unlikely they will be over. , yesterday inves tenyear note yields the falls were of the same order of magnitude as the biggest falls 1982, forand 9, 1987, everyone to remember that fallback. We are starting from a lower base. You cannot keep moving at that speed. I do not think we are done with dancing around on information. We will have days when the 10 year note yields are up and days like today when they go up and then come back down. We have volatility because we have so much uncertainty. 1981, the u. S. 10 year yield it 15. 84 basis points. 15 in 1981, 60 basis points now. Let me get that right. What is to say the numbers will go negative . Kit i think there is every chance he goes negative. We have gone negative japan, negative and europe. What it would we go negative in the United States . If you track that note from 1981 until now, every great cycle would see a lower high in 10 year long bond yields. They have mostly peaked for the cycle before fed funds peaked all the way down, but they have kept on going down the hallway. Whole way. 2009 ishave seen since it is hard to fulfill the promise of normalizing. I am not sure anyone is trying. They will not try unless we have significant inflationary pressures. There are no inflationary pressures . Kit no. We will get low inflation going through. Guy stick around. Kit juckes joining us from socgen. Vonnie here is kailey leinz. Kailey at the moment we are in the grain. It has been a very wild session. I want to remind us what we have seen than the past 24 hours. We had the worst day since the financial crisis yesterday, and then overnight the s p 500 dropped so low it wouldve taken into bear market territory. With trumps promise of fiscal stimulus we saw a rebound this morning. It triggered a Circuit Breaker because we were up more than 5 . Then throughout the course of the session, we have lost a lot of our gains. We slipped into negative territory, but now we are back up. The dow and the s p 500 higher by 1 . The market cannot decide how it feels about the prospect of the stimulus versus the timing of it. What it will do to combat the coronavirus. That prospect is still taking the stoxx 600 lower by. 4 in europe. What is done a better job of holding onto its gains is crude, up more than 7. 5 after the biggest drop for oil since 1991. Even though todays gains are the strongest we have in about six months, we have a long way to go before crew to seize any kind of recovery to the selloff we have seen. Crews down in eight of the last 10 weeks. Nearing 20 . I should say the Energy Sector was one of the leaders earlier in the session. It is not the case anymore. I want to check at one stock in particular. Shares have been halted pending breaking news. They are down with the oil selloff. The news today is that occidental is slashing its dividends for the first time in 20 years. That comes as the company is severely under pressure with shrinking oil prices and shrinking its quarterly payout just . 11, down from . 79. Vonnie and 86 drop. Kailey leinz, thank you for that overview. Function on the bloomberg allows you to catch up on charts focused on the show. This is bloomberg. Vonnie live from new york, im vonnie quinn. I am guy london, johnson. This is the european close on bloomberg markets. Lets check in with first word news with mark crumpton. Mark President Trumps team has been working on a potential economic stimulus package for 10 days but was not yet prepared to provide specifics. Bloomberg has learned the president surprised members of his administration by promising to unveil a package today. The proposals expected to include a payroll tax cut and is shortterm expansion of paid sick leave to help calm markets that have been battered by the coronavirus outbreak. With the coronavirus now and at least 100 countries, Health Officials say the global shortage of medical masks is likely to get even worse. The shortage is leading governments to jockey for supplies, including the united stockpilingh is come and germany and south korea, with have banned exports altogether. Health officials warned that restrictive trade measures could worsen the shortfall and make poorer nations more vulnerable to the spread of the virus. Putinn president vladimir is setting the stage to be able to stay in power until 2036 speaking to lawmakers today, Vladimir Putin says he backs a proposed constitutional amendment that would allow him to seek another term in office. The current law limits president s to two consecutive terms. Current putins sixyear term expires in 2024. He dashed turkey says the eu should stop stringing it along when it comes turkey says the eu should stop stringing it along when it comes to the migrants on its border. Turkey wants eu to shoulder more of the burden for turkish refugees. Let sides have agreed to review a 2016 deal. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Vonnie thank you for that. Back with us from london is kit juckes. I am looking at the Canadian Dollar. 771 ading at 1. 30 1. 3071. What happens to currencies that are oil per related that are oil correlated . Kit i think they go down. If everyone sat down and reached a new deal, than they would bounce quickly. On the more likely outcome the major producers of a contract for supply, we are going to sit in the lower range for oil prices. Last time brent was trading at these levels, dollar was trading at 140, not one already seven. The Australian Dollar and the norwegian krone are as weak as they have been. I am less pessimistic about the Australian Dollar has been punched in the face by so many things in the last while. I feel it probably cannot go much lower than this. The Canadian Dollar i liked on january 1 and i now think of prices stay here it has further to fall. David the mexican peso vonnie the mexican peso is at 21. The yen is a separate kettle of fish. The last time we were looking at currencies this closely was because of trade. Did we ever get back to trade concerns or are we now in chrome coronavirus and oil concerns for this a viewable for the foreseeable future . Kit we will not get back to trade until we get the economic aftermath of the coronavirus. Right now we have had the Foreign Exchange device to the oil price fall, probably bigger than to the coronavirus because it is such a big surprise on saturday should the big question around the speed of the response to the coronavirus and the economic aftermath. What has brought a long period of Dollar Strength to an end in all probability. Well have to get back to trade because we will wonder what happens to global trade after all of this. Have we cd trade . That is a question for another day. Tomorrow. What are you expecting . Andssibility of fiscal monetary action at the same time . Kit it is possible. We used to get rate moves announced by the chancellor when i was a younger man. We could go back to mark carney could come on the line and just announce it. A proactive physical response entirely focused on virus reaction with the monetarys response that is not just rate cuts but selling more practical in terms of how you have to solve things. I think that just makes sense. Guy Christine Lagarde is currently on a call with the eu leaders. This is the job she was brought into do, to get europe to get its act together and come up in some sort of physical response to the problem the eu is currently suffering. Do you think she is pleased today . If she does not succeed today, how difficult will her job be on thursday . How difficult were will her job be getting the Government Council on do anything. Kit how long does it take to learn how to herd cats to this degree . And it is a big herd. I hope so but im at the stage of i hope rather than i have any genuine confidence. Becauseo come and will you cannot ignore this. The italians will be shrieking for it. , the ecb nothing today can come in with the kind of targeting help it will need to offset some of the negative effect of some of the low rates in yields. The idea you can create a significant demand boost through cheaper money in europe today, i do not see it. I do not see how that works. Vonnie what is the Federal Reserve due next week . Kit i think they cut, dont they . The fed is probably working yet what should we be doing that is ,ore targeted, more helpful more working toward the specific. Roblems because of that the fed can cut and probably will cut your vonnie that is kit juckes. This is bloomberg. Vonnie we are up good, 1. 3 on the dow, 1. 5 on the s p 500, and those are not even the highs of the session. We are awaiting potentially more stimulus announcements. We did get mike pences strategy for having the insurers waive fees and making sure 4 million tests go out. It is looking more positive for the market, in terms of coronavirus diagnosis. The president also making comments regarding the cruise liners and the Airline Industry is up 6 . Mgm up 7 . Those are higher. I did want to point out Occidental Petroleum had desperate days. T is of 8 it will cut the dividend by 86 . Guy a real spread in europe in terms of the performances we are seeing. The ftse 100 is in positive territory and north of 6000. Bp and shell adding to the upside. The dax is down. 5 . Take a look at madrid. The italian markets, the spanish market, both down over 2 . 2. 4 in madrid right now. The european closes next. This is bloomberg. Guy 30 seconds to go until the end of regular trading in european equities. The ftse 100 and positive territory. Bp and shell doing well. Hsbc also having a pretty good day. You see what is happening in spain and italy, those markets are down by 2 , 2. 5 . You can see we hit our highs two hours into the session today. We will seeion that serious policy action is generally driving things at the moment. We are in the midst of this call taking place with european leaders right now, but it does not seem like it is being done with the shock and awe that the market is looking for. Down by. 9 in europe. 336. Ftse 100 in positive territory. Bp, shell bouncing back today. That is were the gains are from a points point of view. Really fading into the close today, the market down by nearly 3 . We will see what the final numbers look like later on. It is obvious, we are seeing a little bit of a reverse from yesterday. Mind, it is being faded rapidly. The Mining Sector is up by 1. 9 . Oil and gas up by 1. 5 . Todaynks are back up after a horrible day yesterday. The insurance sector is trading up. Market, let mehe show you what is going on. Utilities. We are basically rotating out of the bond proxy names. Real estate trading lower. Staples lower as well by 1. 5 . Travel and leisure, you are seeing some movement to help out the airlines. Having to ground aircraft will hurt. You cannot stimulate demand with prices at this time. You simply have to put aircraft on the ground. In terms of names weve been watching, we are seeing health care come back today. The u. K. Names helping out the ftse 100, bp up 1. 4 . Hsbc up by 2. 27 . Sector hitnd oil hard yesterday, some of that coming back alleys for the european market. That is the european close. It is the same macro themes heavier we are trading on here in the u. S. , but a different response, given we are closer to a fiscal response here in the u. S. We did get done roundtable with the insurers and mike pence putting out some measures to at least get people tested without having to pay copays, which will give us an idea of the scale and scope of the coronavirus. We are now erasing some of our gains again, but a lot of volume, and we are anticipating that we may get a stimulus announcement in the next couple of hours. The yield on the 10year is 62 basis points. This is a pocket a little volume today. That could move around a little bit as well. 103. 87. At crude oil up by 7 , still at only 33. 34. Theis releasing some of supertankers to get some of that oil out there. Lets take a look at the sectors that are moving. Different sectors have been moving in different directions. The president talking about the cruise and Airline Industry. Aboutnt mention anything aid but still they are rallying. Casinos, gaming stocks, auto, Retail Management companies doing well. Downside, we have some other companies that have been suffering, including oil and gas. Some of those companies are getting a boost. Occidental petroleum getting a although they will be cutting their dividend. We lost two etf products today. You can bet there will be more fallout in the industry. Not as down as yesterday. Guy lets get more insight on whats happening. Big market moves once again. Joining us again is mark. The question really is, are we going to get shock and awe from governments, when does it happen, and is it coordinated enough to have some sort of real effect, to offset the impact of ours is happening . Class we saw in markets is forcing people to react. The problem is, does it come in shock and awe, in that we are getting it piecemeal . I dont think we are seeing policy leadership. We are not seeing who is setting the path. That is traditionally from the u. S. , but we are not seeing that clearly here. Even the u. S. Domestic policy is being announced in a piecemeal approach. But we are expecting it soon. The reason stocks are down today is on the hope of stimulus imminently. Vonnie is this a bifurcation between the u. S. And europe . We may get a fiscal announcement, and it may not be shock and awess but at least it is something. Do u. S. Stocks go higher . Mark we cannot be certain which country will announce the muster medic stimulus. There is still more top we may get something out of europe. Beh of europe seems to handling the crisis quite well. Advances in testing and quarantines. You have the backdrop of insurance and health costs. Ande get some very strong comprehensive package out of the u. S. , you are right, that will matter. But it will probably change the dynamic again within 48 hours as we get new coronavirus news, stimulus from other countries. Guy what are investors saying about when you get in . Some ofyou start to put the money you have on the sidelines to work in risk assets . What is the trigger for that . Mark that is the big dilemma in the markets at the moment. Investors were saying last night, from a personal pension, i think this is the time where you drip feed. When you are trading in a pond, you have to be more aggressive. So you have to time it more carefully. No one is ready to pull the trigger get on the actual buy the dip. In terms of the timing, they think it is a little bit away. Some think it is a couple weeks away. Monthsority think we are away, negative news yet to come. Energy sector, the high yield problems there have to play through in the economy. We have an oil price war, impacting those stocks. The impact from the shock of the coronavirus israel. We have not seen that repricing. I was out last night, all of the bars were closed. We were struggling to find another bar to go to. Thank you very much indeed. Lets get to the eu now get a breakdown of what exactly has been announced, what we are expecting. The eu planning to ease the rules for the first time in a decade to give get a breakdown t exactly has been airlines relief from a fax stemming from the coronavirus. Joining us now for more is victoria. Tell us what brussels and the various states have announced. A few things right now. Eu leaders are having a call as we speak to court and in the response to what is happening, in terms of cushioning the impact on their health care systems, which are under immense strain, but also the economic impact. On the latter, theres a lot of things happening. Finance ministers are meeting on monday. They are preparing a menu of measures. Each country can pick and choose from depending on their needs domestically. This has to do with relaxing state aid rules to potentially changing the treatment of nonperforming loans, if they have been hit by the virus, to helping companies with liquidity, which is a key issue right now. Of course, measures like you mentioned with the slot rules, the eu announce it would ease requirements to keep their slots at airports for 80 of the time. For theto accommodate massive drop in demand, cutting capacity they have done. A lot of measures in the works right now in different sectors. Every country has been hit differently so far in europe. Guy Christine Lagarde is on the call. Is there any expectation we will have fiscal policy and Monetary Policy working hand in hand in europe . Viktoria that is exactly the expectation. The ecb will decide on thursday and there is broad expectation it will take some steps. For a few months now, not just because of the virus, what has been said is that Monetary Policy is reaching its limit and it is time for the government to step up. Now this crisis is forcing them to step up. Likeve seen governments the Italian Government announcing stimulus packages, but we have not seen the coordinated the skull action, which is what the commission is pushing for. This is what we would expect over the next few days. Vonnie give us an idea of the severity of the coronavirus in various countries. Obviously, italy is on lockdown. Greece has made some announcements. Eachelse . Viktoria country is different. Italy became the first to impose nationwide controls, a new situation. A lot of travel bans. Greece has close down schools and universities for two weeks. Spain has done the same. Every hour we are getting new developments of countries imposing further restrictions, trying to slow down this virus. What is becoming clear is that any effort to slow it down will have a cost to the economy. Guy we will leave it there. We have a headline saying new jersey has announced its first death from the coronavirus. New jersey announcing its first death from the coronavirus. We will bring you any more details as we get them. A reminder of the human cost of the coronavirus. Guy in terms of what we have seen in europe, the effects of the coronavirus on the markets, the ftse 100 faded into the close. We are up by. 2 . We were just mentioning what was continent,n the italy, quarantined, spain starting to feel effects. The expectations for policy action in the nearterm maybe driving markets lower today. By 1. 41 . Nishing down the cac 40 down by 1. 51 . On the periphery of europe, spanish markets down by 3. 21 . The italian market down by 3. 28 . Some really big losses on the periphery of europe coming in in the last hour as the market completely faded their earlier rally. We will continue our market coverage at the top of the hour on bloomberg radio. You can also find it on all your bloomberg devices. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is the european close on bloomberg markets. Despite saudi arabia confirming its commitment to the price war with russia. Saudi aramco was to supply 12. 3 Million Barrels per day in april. That is a lot of crude. With us for context is mike mcglone. Putin was one of the notes that i saw today. Who is the house, if the house always wins . It is the collapse of opec plus. You look at crude oil compared to natural gas, yesterday, natural gas made a 22year low. I dont see why crude oil should not do that. Then you look at crude oil versus bond yields. They say the same thing. Yet, bear markets are famous for volatility. In terms of any idea about whether we can put Humpty Dumpty back together again, opec plus back together again, is there any chance, is this broken on a permanent basis . Fightings is dictators it out in a sandbox. We can predict human nature. I think this will continue. The best way to do that is with lower prices, and that is what will spur them. Prices, onee lower thing that will happen is u. S. Production will drop sharply. It is already showing signs of that. Lower prices will do that, which is a self filling prophecy. 42. 50 orssia needs so to balance its budget. How long can they last before dipping into emergency reserves . You look at what happened in 1998 when russia defaulted, and we could be getting their. There. Iniously, there is credited some of the middle eastern countries. Then we have russia. It is hard to measure what they will do, but this will definitely be a major issue for all of them. The only way to slow down production is lower prices. Guy this is a boost for the global economy, isnt it . Mike that is the good part about it, it is basically a tax cut. 1. 509, i remember paying a gallon. It will help. Even with the summer blend coming in, we may get lower prices at the pump, and diesel, too. Seeing we are already victims, occidental with a dividend cut, two products have gone away. Mike it is hard to define what is next. I focus more on the underlying commodities. We have a team that looks at distressed credit, and distressed debt should be getting pretty big there. Ok. On a quick question from me even final quick question from me. In terms of how the saudi, gulf states deal with this, they will be producing a lot of crude. What happens to that crude . Saudis have started to rent out vlccs. Ofk me through the mechanics this much crude suddenly being pushed onto the markets. Mike massive oversupply. You will see it in the inventory data, which is typically a bad sign for prices. People may horde and store it. Every country will be trying to do that. We all know prices will be lower. So what is the hurry . Vonnie our thanks to mike mcglone of bloomberg intelligence. Price around the world continues to drop, and it gets cheaper and cheaper, is that going to slow europes move to a zero Carbon Economy . I spoke to an eu commissioner yesterday. We cannot say lets save the planet in 2040. We have had a very tough crisis, financial crisis, in 2007, 2009. We recovered after it. Unfortunately, very bad trends of our environment, climate decline, we cannot continue business as usual. Clearly it will change. Most important to realize about the green deal, it is a growth package. It is not only about environmental policies, it is a Growth Strategy for maintaining decoupling from other sources of growth, and offering a greater solution to consumers. This is what will also be trendy, and companies are already starting with their plans. Many Companies Already have their plans on how to reach the 2030 goal, 2050 goal. Right now, the world is screaming for europe to spend money. The world is having a financial crisis. Spend the money, make big announcements, and do it now. Tomorrow, starting tomorrow, we will have a new industrial strategy which will clearly set a path. Wednesday, we will come up with the economy action plan. It is a huge number of initiatives, opportunities for businesses. At the end of the day, its also very important to succeed negotiations on a new upcoming budget. Then i think all of those priorities will be in line. Guy do you think the slots rule should be abandoned . So that these aircraft can be grounded without the airlines osing their slots at the airports . At the moment, there is no need for the eu to step up, airlines are making the decision themselves for a son their scenarios. And it is not only here in europe. We see a similar situation in china. Guy that was my conversation yesterday with the eu environment commissioner. There has been some Movement Today on that slots rule. More coverage to continue. This is bloomberg. Lets take a look at the markets with kailey leinz. Are seeinght now we the rebound still in tact, granted it has lost quite a bit. We opened 3 higher on the major averages. Fluctuating, dipping into negative territory at one point, now up by more than 1 . The prospect of some fiscal stimulus may be getting a lift to risk assets. You may also being some buying coming in. Bearishness has gone so extreme. If you look at the 14day relative strength rsi, it tells us whether something is overbought, oversold. We are still in oversold territory on the s p 500. Yesterday, more than half of the members in the index were in oversold territory. That has not happened three days in a row since the financial crisis. We will see if that changes in the next two days. The best performer is Occidental Petroleum, up more than 10 , after getting crushed in recent weeks. Today, the news that occidental is slashing its dividend for the first time in 20 years, . 11 down from 79. It is also cutting its capex. His company very much pressured by lower oil prices, and it has to pay down the debt of their acquisition of anadarko. One other stock i want to look at on a longerterm view, boeing. Today is the one Year Anniversary of that second 737 max in ethiopia. Since that time, the stock has lost almost half of its value. Thats really range bound we have seen the losses accelerate in 2020. The 737 max Program Still faces a lot of headwinds, questions, so we are keeping an eye on boeing. Vonnie a reminder, check out tv on the bloomberg. You can watch all of our programming and engage with our charts, and even right to the producers with questions or comments. This is bloomberg. Lisa im lisa abramovitz. Welcome to bloomberg money undercover. Oftake you inside the World Private debt, private equity, and real estate. Turning and credit is into opportunity as investors start poking around the trash bins, digging into the shale patch to see if it is time to catch a falling knife. Private equity burning for a global recession. With me is