Futures reverse losses as the u. S. Senate reaches an agreement on a 2 trillion stimulus plan. Trump said he would like the running by easter despite warnings from local health ans and his own professionals and europe as ases a bailout fund finance ministers lay out the next phase of their fiscal response. A stimulus plants given a assets. Risk we had the best day for the dow since 1933. S p 500 having their best day in at least 12 years. Futures on the front foot. After the best winning streak in years for the dollar, 10 Straight Days of gains taking it to a record highest thats one perhaps of de funding stress easing in markets. Yield, weve seen a gold. In oil and some of the forced liquidation in markets seems to be subsiding. To the top story. The u. S. And the white house and democrats have reached an agreement capping days of sent on negotiations that shock waves through markets. Its great to see you. So what do we know . It seems to be light on detail at the monument but run us we know. Hat we did hear from mitch leader as majority well as from the democratic leader, chuck schumer, about what this deal is. A deal. F we have its something weve been on, and people close to it know it might actually be 2 trillion. Han 250 will go town employment aid. Hospitals. On for a stimulus deal approximately 50 billion for airlines. Of the main sticking points of this deal, they all agree we should be spending 2 trillion the u. S. Economy back on its footing but it was about the oversight of the money. Going to be giving to corporations and municipalities. The democratsed is we need significant oversight. This is one of the biggest things to be negotiated on. Pparently the deal includes significant oversight similar to what we saw with tarp in 2008 this ey will be voting on deal tomorrow morning. What more can we expect in days, then, how might this evolve . Certainlyxt two days, whether or not, how quickly this money gets to the american people. Deal is checks. Im not sure if it will be or 1,500. 200 one thing about the checks that americans seem to be excited the democrats want it si every single american while the republicans were just those employed and in retirement. The next few days will likely focus with this stimulus plan ut of the way, is going to focus on whats going on, on the ground . Are ventilators making it to hospitals . Masks making it to hospitals . There seems to be a bit of a between the administration and governors round the country about when reopen. Can thank you so much. Cioquintet , Group Private bank joins us. Thank you for joining us. Of course, were seeing a little bit of risk coming back from equity markets following news stimulus plan e from the u. S. Is this the end of the beginning f the bear market rather than end . Beginning of the well, i think its too early to tell. Were seeing at the moment, rally. N early having the re adjustment for the markets audio fading in and out] you know d see, a lot in the last few days [audio fading in and out] and where you saw this pernicious effect [inaudible] i will connect with you in a second. Bit of an g a little issue with the skype connection there. These se, in unprecedented times technically as we broadcast and in markets as well. Just bear with us as we try and reestablish that connection in. Terms of how markets are looking little bit seeing a of an extension in u. S. Futures. In the dow n we saw yesterday, the biggest jump since 1933. Erase ures actually did some of the losses that were still seeing ever so slightly in nasdaq futures, too. Perhaps investors questioning or htly this stimulus plan maybe it was an issue of buy the rumor, sell the facts. 10year yield not really rising. Dollar weakness continues for a after a 10day winning streak. Ne of the signs potentially of some funding stress subsiding in the markets. Take a look t across other markets as well, whats been interesting is weve not do too well but then we had a rally over the past couple of days. 1600 per ounce. Pulled back a little bit. Well, up almost 4 . Some of the gains that were seeing in commodities, its been copper. Good run for erhaps suggesting that some of that, selling that liquidation of portfolios is subsiding. Oil seems to be riding that rally but the question for markets is, how long that on in terms of equity markets. Now, getting back to the oil story. G7 finance ministers urging oil at theink if you look way prices have been moving with think stocksues, i prices have yet to settle down. Where intereston. Ates move significantly higher will be a lot of socialization of debt in terms of the funding crisis. But any real pernicious raising of rates, i cannot see it happening. A risk of inflation coming through. I do not think that will shift rates either. If you look at the reaction in markets to what we have heard on the senate bill today, you are seeing futures in the red. 9 . Utures down almost nasdaq futures down 1 . You are not really seeing a sustained appetite after yesterday. What more do you need to see to want to start to add risk . What we are seeing over the last 12 days is some really downsidele on the where liquidity is driven the need for investors to pull into their atm machines in terms of liquid assets. We are seeing everything from gold out of their portfolios. Now the funding has stabilized. You have seen people be able to normalize their portfolios. Wave of have this fiscal support. Looking soft. I think we are in the realms of the unknown in terms of moving away from fiscal policy and moving away from monetary policy. At this point they are doing whatever it takes, and that is great. But it is down to the government in this unusual situation we have in terms of the pandemic, to demonstrate they have the containment in place. To me the biggest risk at this point is to see the world dealing with the crisis moving from Different Cases to east to west, china to europe to the u. S. To be embedded we need the u. S. To show a Strong Health policy and containment. Then, we hadyou mr. Trump talk about filling churches by easter. Bill de blasio talks about the inconceivably of that. I want your opinion on the risk policy from the white house versus the policy veracity coming from the central bank. Is there a risk of major policy handling of the closedown of america . If you look at it this way, you see what is going on in china, and i know the governments and economies are coit different arc white different are quite different. Is about 10 weeks from the first infection which is bably as fast as any yet. Has not abated the u. S. Is a very different economy and it is a very large country. Multiple states and multiple Government Intervention within the united states. We can do this within 10 to 12 weeks seems very optimistic to me. We are at risk. The safety net is there for liquidity and driving fiscal support, even into the workers hands, and that is great. To containically this from a Health Policy perspective, this could go for make vshaped recovery into something that looks like a u or an l. Got, especially because of the construct of the u. S. Economy, it is very consumer driven, very confidence driven. This, we do not contain you could have a second round affect in terms of drivers of the economy. Absolutely. If you look at the european pmis yesterday, it showed what we are facing is not so much an issue with manufacturing, although that is the issue, but the bigger drop is on the services side. People have also been talking about depression and where we are in equities and bond yields right now. To me and a number of people have agreed, it is not really Market Pricing for a depression. Are clients coming to you with questions on what to do with the portfolio in the event of a depression . No. Base case is the fiscal support and monetary support will come through. The package coming out of states is enormous. We just see that the risks are large in the u. S. In terms of kittanning this, which could [indiscernible] bill staying with us. Thank you so much. We will catch up again tomorrow. Ill ask him fatalitiesirus climbed in spain and italy. For more lets go to brussels. Update us on the last 24 hours. Group that a euro was hyped up. A lot of expectations placed on it. I am sure you know there was a lot of chatter going into this. The result was i would say slightly underwhelming. Its clear by now finance ministers believe the way to tackle this is more on the credit side than on a corona bond. They feel the best way to go about this is to tap the esm, around 2 gdp. There are a number of issues. The question is what conditions are we going to get. That carries a political stigma. The italians do not want to see any conditionality attached to this because they feel this is something effectively not something they created. It is not a political problem, it is a health crisis. Why should there be any conditionality . Speaking of italy, there was bad news the past 24 hours. The number of cases and deaths climbed again. That is damaging hopes that the longterm the lockdown measures were reducing the numbers. It is too early to say they have failed. If anything what we need to see is a bigger lockdown. Maria, thank you. Coming up we are going to speak to the Spanish Foreign affairs minister. You can see that interview just after half past 7 00 this morning london time. European features in the green, up more than 1 . S p futures down. 4 . We gave up some losses of the stimulus plan from the u. S. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Good morning, from london. Im nejra che h. Asian stocks extend the wall street surge and futures pair losses as the u. S. Senate reaches an agreement on a 2 trillion stimulus plan. Country up and running by easter despite warnings from his own Health Officials and local leaders. Daybreak europe. We get the deal in the stimulus plan on the stimulus plan in the senate. After the best days on the dow since 1933 and the best day for the s p 500 in about 12 years, not much conviction in u. S. Futures at the moment. Are there just too many questions about where we go from here in terms of u. S. Policy and concerns about further stumbling blocks . Or perhaps ultimately the effectiveness of the fiscal stimulus, given that the fed has already thrown everything some might say at the issue of coronavirus in the u. S. . More than that, we did not get a data out of the u. S. Great data out of the u. S. Or europe either. More dollar weakness after the best run of gains in 12 years. There signs that lola liquidity strains are softening. Is it just a slight correction of the Dollar Strength . The 10year yield has been fairly steady and most of the session. We are down 1. 5 basis points. Oil on the front foot. Gold going back, about 1600 an ounce. Lets get back to the 16 trillion u. S. Mortgage market, suddenly experiencing its worst turmoil in the decade. The upheaval is setting off alarms. Here is dani burger with the details. Dani it is almost unbelievable that yet again the Mortgage Market is at the center of yet another financial crisis, but this time it is not because the bonds are risky. Instead, because of the coronavirus shutdown, you have fears that homeowners and corporations cannot pay on leases. That means that these bonds have plummeted in price, yields are skyrocketing, and Real Estate Investment trusts that own the bonds are all of a sudden facing heavy redemption from clients. But that is not all. These leads are also very highly leveraged. The lenders are saying the value of what you are holding is plummeting so much, im going to need more collateral. The issue is that they need the cash to fund the collateral. About trying to sell off the bonds. More cannot meet margin calls. That includes invesco. We have seen the shares absolutely plunge. Msa financial lost more than 80 of its value. We are seeing a fire sale from these mortgage bonds because they cannot meet their margin calls. The fire sales could be ricocheting throughout the financial market. Nejra that takes me right to my next question. What possible consequences could we see through the rest of Financial Markets from this . Dani sure. One of the issues is that liquidity, that grab for cash we have continued to see when you fund thesecash to positions, those margin calls, they have to look elsewhere to get it. See thatue to liquidity crunch. The Mortgage Market is an important one. It has a lot to do with the repo market, the shortterm lending market and it is sitting brokerdealers as well. That much of not that 6 trillion market, but they are so highly leveraged it is really hitting a lot of the aspects of the bond market. Burger,loombergs dani great to have you with us. Lets get to Annmarie Hordern for more on this Senate Stimulus deal. Basically the. , white house and democrats have reached an agreement on the stimulus package. Speaking in the last hour, Mitch Mcconnell says it is a historic package that will deliver relief to americans antibusiness. And business. Annmarie hordern in new york. Im sure you heard after days of intense discussions, the senate has reached a bipartisan agreement on a historic relief package for this pandemic. It will russian new resources to the front lines of our Nations Health care and it will inject trillions of dollars of cash into the economy as fast as possible to help american workers, families, small businesses, and industries make it through the disruption. Tell us so can you far even if details are light . Annmarie the details are light. They just wrapped this up about 1 00 a. M. Eastern and they will vote on it this morning when they reconvene. That they are telling rdc reporter that what it includes is actually could be worth more than 2 trillion, 250 billion dollars will go for forployment aid, another aid, and then 50 billion will go directly to airlines. This is one of the industries hardhit by the pandemic. One of the biggest sticking points, everyone agreed there needed to be stimulus, they agreed they should go big with 2 trillion, but it was the details under looks like the democrats got the significant oversight for the 500 billion beso they are going to bailing out in a sense these corporations and municipalities similar to what we saw in tarp in 2008. We should get more details tomorrow. Throughout the day today, the discussion has been really wideranging between what would be included in this bill. Im talking about money for things like ngos to even the energy sector. Republicans want to fill up Strategic Petroleum reserves. The democrats are saying, we want to link it with clean energy credits. It has been wideranging. The crux of it we have now, but we will have to wait for the morning more details. Nejra i dont mean to throw a curveball at you, but there is also a report about the Trump Administration weighing a 90 day referral of tariffs. Debating whether to defer payments of duties on imported goods from around the world for three months, according to people familiar with the talks. It seems like such a long time when we were having any discussions about the trade war, but what is the latest on this . Annmarie i saw that report. It is interesting. That has been the debate inside and outside the administration. If they were to defer the be immediate would cash back for some of these corporations purchasing these products. I guess it is something they are looking to do on top of these measures. It will be interesting if they do take the next step given the fact that that has been one of the main points of the Trump Administration, these tariffs with other nations. But we have really seen the u. S. Completely kind of throw the kitchen sink at this pandemic that has now become a fullblown financial crisis in the sense that we had the fed going into what many are saying is uncharted territory with those loans. Now, one of the biggest stimulus bills ever from d. C. , more than 2 trillion our sources are saying. Then potentially if they go a step further and way this deferral. Great to have you with us. Bill, lets pick up on a few threads. Hearing from dani burger before the update on the senate bill thet the implications of Mortgage Market in the u. S. At the moment. Is this something that is causing you concern and how are you expecting this to reverberate across markets. I think this implication coming out of the whole funding cycle, going back to some of the questions about the basis for liquidity. I think it is not really that surprising that we saw this play out in 2008, as well. This would stabilize the liquidity cycle. This will play through the system. Even if there has to be fiscal in terms of buying some of these assets, they will stabilize the markets. It is concerning because it is a reverberating across all the risky assets. The highyield market in the u. S. Is showing signs of strain, as well. That will probably next be be the next focus because the highyield market is facing a confluence of events. Yes, the fed venturing into uncharted territory in terms of giving direct support to credit markets and moving away or in addition to trying to ease the liquidity strain. The ecb, boe, and boj have had programs for years, so you could say the fed could turn to its peers for tips on pushing loans to businesses. You have had a strategy in the past of euro highyield versus u. S. Highyield. How are you navigating credit markets in this . Yeah, you know, if you step down the credit structure, the highyield discussion that you had mentioned, i think the policy support and the framework in europe is significant. With impacting the highyield market as well. Compression ofe the spread and a lot more stability. We prefer the european credit markets over the u. S. , especially the highyield markets because of the support and the intervention. When you look at the u. S. Highyield market, it is better, but it has significant exposure to the Energy Market as well. Also, the refiners and the transport linkages. At the moment, it is very difficult to see a play. If you look at the highyield u. S. Versus 2008 and 2009, we are nowhere near that spread level. I suspect he wont get to that spread level because the policy intervention has been so much quicker than it was in 2008, the, but we do expect reallife rate to increase significantly over 2020. With bill street stays us. U. S. Futures in the green now. Than 1 res up more after the best day for the dow since 1933, the best day for the s p 500 in years. This is bloomberg. Nejra this is bloomberg daybreak europe, lets get back to our top story. The white house and democrats have reached an agreement over a 2 trillion stimulus package. Majority leader Mitch Mcconnell says it is an historic package that will bring relief to americans and businesses. Lets get to our senior at of her editor in singapore. Inare seeing futures positive territory. The market getting more into the stride after being in the red earlier. What can we expect over the next few days . A vote laterpect sometime today washington time. Ist that actually means afternoon, evening. After that, if you cant get unanimous agreement from house lawmakers, you have to call the house in, so there is a process this has to go through, not necessarily that this is going to be enacted into law in the next hours, so be a little bit patient on this. What you watch for is whether or not there is any hiccup Going Forward that is a meaningful hiccup. It does not seem like that from the early indication. Mitch mcconnell said there would be a vote later today and help is on the way. That is the message. Nejra one of the issues democrats had was that this was not necessarily going to provide enough support to individuals. Has that stumbling block been truly over, and are we left with what has been an effective stimulus package . Moment, there is additional relief to people, going through the early bits of aboutll, you were talking unemployment insurance, workers being furloughed. Things like that. They have come to an agreement on that. That wound up being an important thing. I think the bigger thing contained in your question is that this might not be the last thing. This isr thing about that this crisis is different than a lot of other crises we have seen before because this is a thing where demand fell off a cliff. The whole nation started locking down cities. People dont want to go buy a plane ticket if they think they are going to get a deadly virus once the get off the plane. Isot of how this works really tied to the issue of how many people are in a hospital, how many people are dying . Everything else follows from there. Where at a situation central bank or a government is going to lead you across the line here. The virus ishether dying more people are dying. Nejra yes. Exactly. You can give cash to people and companies, but when it comes to people, the question is whether they hold onto that cash rather than spending it in times like these. Thank you so much for joining us. Now, lets get the Bloomberg Business flash. Apple may start reopening some of its stores in the first half of april and it has extended remote work for many of its employees through april 5. Details were exposed in an internal memo obtained by bloomberg. Cutting about 1000 more jobs than previously announced as part of an overhaul for the troubled steel unit of the industrial giant, cutting about 3000 jobs by 2026. They are also looking to cancel the fallout of the coronavirus. Facebook says the advertising business is taking a hit in some parts of the world after an uptick in usage for many of its services. In some of the worst hit countries, messaging has jumped more than 50 . They say the coronavirus is adversely affecting its business like so many others despite that. Boeing hopes to revamp may. Ction of it 737 max by the News Agency Says the coronavirus outbreak has pushed that back a month. The 737 max was grounded a year ago following two fatal crashes. That is your Bloomberg Business flash. Coming up, we will have more discussions with the bill street. He is still here with us, bill us for the hour. Bill, we are looking ahead to the rest of the week where we did see quite a powerful rally in u. S. Equities yesterday. The best data since 1933. It looked like we have a little bit of positivity coming back into futures. One thing as well that ive been focusing on, the second day of dollar weakness after the best run in 12 years for the dollar. Is this a very slight correction in Dollar Strength . Or do you expect the Dollar Strength to resume from here or perhaps provide more challenges for the u. S. Economy . Think that Dollar Strength is highly correlated with the crisis. Haven Movement Across the world to normal currency culprits. I think what you probably will see is that correlation continuing if we get a bit more strength into the equity market and we discussed the jeopardy and that in terms of risky assets Going Forward. I would see the normalizing in that scenario. If you take a look at some of the crosses, they have moved so far. The cable car pushes concerning. Unless you are really mapping out significant scenarios for the u. K. Economy, we believe the u. S. Economy, than there is some value there, but i would say that the concern with volatility , the dollar will maintain certain amounts of strength. Nejra yes. And also, what you have been putting out in your outlook for march is that actually you think that rather than focusing so much in the Inflection Point in italy, which is what a lot of investors have been focusing on, you think we need to be looking at what happens in the u. S. To in a more powerful leg up equity markets at this point. When President Trump talks about easter,g on april 12 by does that fill you with confidence or concern . This is probably what concerns me the most. I look at the policy responses from east to west, china, europe, the u. K. Policy response has been very rapid. From 2008. Blueprint they know what they need to do. There has been no discussion about things like moral hazard and concern. The fiscalks and support has opened really quickly, so that is good news. The jeopardy and all of this is the degree of complacency that comes out in terms of the administration, in terms of how they deal with containment and delay. If they are not careful, we will see what we have been going on that is in the u. S. And a slightly concerning prospect in terms of what it means for the economy. We know that this is a demand shock in the Global Economy as it hits the west end hits the u. S. , we could have a significant leg down in Economic Activity and the pricing of if investors cant get confident that the Trump Administration has a handle on how they contain and physically look at this phase for this virus, as we have seen in the u. K. Has gradually, day by day, put in more draconian measures that we have not seen since world war ii. I think to be done and it will need to be done more quickly than they are talking about in the u. S. Nejra bill, what are you looking at in terms of portfolio diversifiers at the moment . I know it might seem silly to talk about diversification one we have had so much correlation and markets at the moment, but what are your preferred diversifiers . Obviouslye is diversifying agents that require a new portfolio. Had is wheree have those correlation coefficients breakdown. Is not some degree unexpected in terms of when you have severe stress into thousand 8, 2 thousand nine, your correlation coefficient did break down because you had other shocks to your assets, such as funding and liquidity and getting liquid assets out of the liquidity requirements. Example, the selloff in gold. In sovereign bonds, as well. Which normally have a high degree of correlation of risky assets. Is as soon aseen the funding and liquidity has normalized, those diversifying agents have started coming back and i think they will continue to come home. We have had gold and long in treasuries in our portfolio to help balance the risky assets and they performed really well. Nejra ok. Bill street, sorry, going to have to cut you off there. We have futures on the front foot. This is bloomberg. Matt welcome to this is bloomberg. Miller im matt miller. U. S. Lawmakers agree on a 2 trillion stimulus plan despite the impact of coronavirus. It goes to a vote later today. In europe, lets progress. The euro area finance ministers take a small step toward a rescue package. Spain records its biggest daily death toll