Test. E taken the it has come out positive, so i am working from home. I am selfisolating. That is entirely the right thing to do. Be a no doubt that i can continue, thanks to the wicked with agree of modern technology to continue to communicate with my top team and fight back. Is selfisolating in his down a street offices after a test on thursday found he had the coronavirus. Weeks ago johnson had pledged he would go on shaking hands with everybody. 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 i am vonnie quinn, welcome to bloomberg markets. Here are the top stories we are following. The fastest u. S. Stock rally in nine decades is showing some signs of fatigue. Nervous aboutin the effects of the coronavirus pandemic. Bostic from president who expresses some confidence that the economy can rebound strongly. Later we speak with nobel prizewinning economist joseph stiglitz, who will discuss whether the stimulus efforts are enough to save the Global Economy. Before we get to our market check i want to point out that the baker hughes count is out. Down 44 to 728 last week. Right now crude oil is deteriorating even further. Down 5. 1 . Taylor riggs is with us to take us through the rest of the trading day. Taylor i want 10 fold and some of that analysis you are getting some getting from the baker hughes index. It is off about fiveandahalf percent or so. Industrials as well. Until today they were up 15 or so. On the past three days we had a lot of optimism. That is turning around some of those. Down 11 basis points on the 10 year. Utilities now finally turning in positive for today. To take a look at the chart here i am showing. I kept hearing some of the hedging that was going on his getting expensive. It is too cheap to sell calls, so then it is too expensive to buy puts. The cost of hedging is getting pretty expensive. As you can see, the spread between the two as widened. Not as white as it was in the last few days, but certainly you can see the cost of hedging increasing within the s p 500. I want to take a look at the bloomberg dollar index. We have talked so much in the past month or so how the funding pressures within the dollar. He finally got a bit of a reprieve as some of the dollar dynamics were returning to some of the traditional mechanisms. You had a little bit of weakness in the dollar index as we finally start to see some of that fed intervention play through within the dollar market. What that means is you are getting a big rally in credit. The fed is stepping in as the lender and buyer as last resort. They will be continuing to buy investment grade. Boost foruge investmentgrade bond etfs. Following suit in gaming with Corporate Bonds today. Both of these etfs on track for their best week ever. Vonnie thank you for that. I just want to point to what was supposed to have been a News Conference from u. K. Prime minister Boris Johnson. Michael gove is giving that press conference because Boris Johnson has been diagnosed with coronavirus. Michael gove saying that wars johnson is still leading the response. At the moment of infection doubling every three to four days. Treading stronger today by almost 2 . A look at credit and fixed income, the buoyant mood is darkened a bit today. Lets get straight to our guest for a roundup of what did happen this week. Casei jones is income strategist at schwab. Kathy, it was a turbulent week and fixed income. Where are refinishing friday . Kathy it is been quite a roller coaster in fixed income. It looks like we are finishing up on a positive note as taylor riggs mentioned. Or the reality that we are going to see the fed buying Corporate Bonds to close those spreads or keep them narrow have helped out. In particular the investmentgrade market. Flow eeing this rapid the money flows and, the money flows out rapidly. A risky Mortgage Lender laying off 275 employees earlier. How concerned are you that there are pockets that the fed cant get involved in that might be in real jeopardy here . About the concerned mortgage market. Anything leveraged. Leveragedve something it is going to create its going to amplify the ups and downs. Could concern other areas that could be at risk. The other area you have to be concerned about his high yield, simply because the fed is not committing to buying low investment grade. We have seen the spreads. Throughthat as you go the highyield market youre going to have to be pretty careful with where you are looking because we have some fallen angels. Vonnie there was concern about counterparty risk. The fed has delayed the banks apple hit. Banks capital hit for up to two years. More we see even unorthodox action from the fed next week . Kathy i think the fed can do a lot. And really never runs out of ammunition. There are things that they can always do. Weve seen that demonstrated now. They probably could, but i think from beginning and end this is not primarily have financial crisis. Is a Public Health crisis that has become a bit of an economic crisis. What they dont want to tip come as a financial crisis from here or a Banking Sector crisis. I think they will continue to take steps. If they see in area they think is at risk i vonnie think that they will step in. Kathy, we were speaking with a couple of fed president s early on. Saying, absolutely no chance of inflation out of this. The pandemic effects are going to be deflationary. Do you agree . Kathy i think i do. The impact will be deflationary. Then we have a crash in oil prices to boot. Interestingly, we have actually seen a bit of an uptick prior to this happening because of the trade conflict. Its starting to raise some of the prices of imported goods. Some bottlenecks because of the tariffs. That all gets subsumed by this overwhelmingly deflationary impulse from the decline in economic activity. Vonnie we have to leave it there, but thank you for joining us today. The Schwab Center for financial research. The houses scheduled to vote today, republican Thomas Massie says he will insist on a roll call vote push the timeline. House leaders have a plan to fourth that call. Lets get the latest from kevin cirilli. Kevin, obviously a lot of pushback from within the gop. What happens, what is your best call on this one . Andn even President Trump with theiragree opposition of massey. Heres what i know. House Speaker Nancy Pelosi has signaled to democrats that they would like them together on the house floor. They believed they could have reached a quorum. Forso spoke with a staffer Republican House members and they are being told they could have quorum. That is just the latest step. If we get a vote as the president signed today . To start enacting this, right . Kevin precisely. That is something that republicans are pushing for and democrats. The president has said he will sign as quickly as he can, once that gets on his desk. Vonnie we will be in touch with you. As soon as the vote gets underway. Our thanks to kevin cirilli. From new york, this is bloomberg. This is bloomberg markets. Extraordinary scenes in the house of representatives. Thats nancy pelosi. Shes waiting to get enough people into the chamber in order to allow a voice vote. House leaders with this plan to thwart Thomas Massies effort to force a roll call vote. Thomas massie coming out earlier spanner ining the the works. House members planning to be on the Chamber Floor and upstairs in the gallery to establish a quorum. They also have to make sure their social distancing. This is all according to aids that spoke with bloomberg. We are going to monitor what happens in the house. I can only imagine it will go on for some time. For more on the markets we are joined by dennis but dennis debusschere. Have you ever seen anything like the last 10 days . Dennis no, not even close. Having lived through the financial crisis, it is certainly extraordinary speed at which things are happening. The speed at which things are happening are just 10 times what i recall from the financial crisis. Vonnie what are clients saying to you . What is the concern that comes up most of the moment and what are you telling them . Dennis good question. The biggest one is, when will think thanks come back to relative normality. When can you expect to go back to work . And then what will behavior be like that follows . On the first point, what we are telling them is, if you can get back to work by my by may, gdp declines can be somewhere in the 20 range shortterm. If it is june or july, significantly worse. , hope is yes . Vonnie you dropped out there for a second. Continue. Dennis the hope is that people come back by the end of april and the powers that be are trying to push for that. That would be a positive and so far as we would have the stimulus. We think that will be possible, of course i am not an expert on how quickly this will spread more when we will see peak virus cases in the u. S. Comfortable that im willing to take a bet on the long side. I think we are close to fair value under a financial crisis scenario. If earnings went down 40 and recoup 50 about over five years and we saw dividends and buybacks move back up from distressed levels, you are pretty much in line at these levels right now. If we think we have some thatlcy in the future, and stimulus can bridge that gap, volatility will decline significantly over the next six to eight months. Vonnie are you looking for an earnings recession this quarter and in coming quarters . Dennis yes and yes. I think that the easy call to make. Consensus estimates have not come down nearly enough. I think you are looking at a 25 . Um on the year of similar to the Global Financial crisis. A lot of people have gravitated toward that 40 number. Year 164, get you down in hundred dollars on earnings. Obviously very steep decline. Most importantly, on a cash return basis, the market is has discounted a lot. Leave ite have to there. Always love getting your thoughts. That is dennis debusschere. Head of portfolio strategy at evercoreisi acai isi. The economic rebound may be robust. That is the call from the atlanta fed. This is bloomberg. This is bloomberg markets. Atlantareserve bank of president Raphael Bostic spoke to mike mckee earlier about when he sees the rebound for the u. S. Economy following the colonna coronavirus pandemic. Take a listen. Mike this is a Public Health crisis. This is quite different than some of the economic disruptions we have seen in the past. As a consequence, i think there is the possibility that once the Public Health crisis has gotten under control and we dont have that issue, the economy may rebound quite robustly. Yesterday on the news that the economy started in a good place. I think that is right. Something we should all keep in mind. The goal for all of these projects is to try to make sure that when we get on the others if this the economy is as close to that place as possible. Health when recovery and is not a major concern, the economy can start kicking back on all of the cylinders and running quite strongly. My hope is that if we do the responsible things and take care of our Public Health problems, the economy can rebound and some of the shortfalls wind up not being as deep as they could be. Like how bad do you think the shortfall could get . What does the fed see in terms of gdp . Raphael it is interesting. I have talked to my macro forecasters. What they tell me is that in this environment, where we have had an induced contraction, forecasts are difficult to do. We are definitely expecting gdp for the Second Quarter to be at for the first quarter, close to zero, for the Second Quarter definitely negative. It is an open question as to how quickly we get the Public Health crisis under control. There isforecasters debate about whether we will start to see that early in the third quarter, the middle of the third quarter, or the fourth quarter. I think he can be pretty tough for the next month or so. Then a lot of the trajectory depend on how we deal with the Public Health issue. Mike you have a background in housing. There is no money in the stimulus for mortgage relief. How do you think housing plays out . Raphael it will depend. What we have seen to the congress is a series of bills trying to address various aspects of the crisis. The Housing Market is one we are continuing to have conversations. Manygotten contacts from italy the product and the property industry. We are working right now to try and understand those better and make sure that there is an Collateral Damage in Housing Markets. Isnt thatre companies go out of business for people lose their home or people lose their home. In the stimulus bill, you are getting a lot more money, a lot more power from congress but they are also putting some restrictions on what you do. Say, in terms of the corporate loan program. Does it bother you that the line between fiscal and monetary is getting blurred . Raphael i dont think so. First of all, it doesnt bother me. The thing to remember is all of these facilities are being stood up under emergency authorities. The important context is that we are in an emergency. Emergency, onean of the lessons we learned coming out of the Great Recession is of, act strong, act definitively, attacking a very aggressive way those parts of the market that are weak to limit how deep or have negative things get. It doesnt trouble me about this. We have these authorities, the congress has given them to us. We will use them in emergency. I have every confidence we are going to reply them in a responsible way. Vonnie that was atlanta fed resident Raphael Bostic. Coming up, we speak with joseph stiglitz. He says unemployment could easily reach 20 or 30 . We will be asking him for time frames in just a few moments. Lets take a look at where we stand. We are more than halfway into the final session this week. We have had a bumpy ride today, but in the main whereby about 3 . In the s p 500 most of the groups are lower. The cruise lines are obviously the lowest. Some of the Energy Companies as well. Of course, the casinos. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] vonnie live from bloomberg headquarters in new york, im vonnie quinn. Tomato toronto im amanda. There are the top stories we are following. Fastest u. S. Stock rally in 90 years has ground to a halt after a massive threeday search. Erase much of yesterdays gains. This is the coronavirus outbreak continues to spread locally. Confirmed cases topping half a Million Worldwide with more than 25,000 deaths. The u. S. Has passed a recordsetting stimulus bill to help fight the virus and its economic impact. Is that enough . He will get the outlook from joseph stiglitz. That conversation in just a few moments. Vonnie let me underscore that. The house has clear the coronavirus package. Thwarting efforts by Thomas Massie of kentucky to force a roll call. Just in the last few minutes, leaders did insure a quorum of more than half of the houses numbers were present. And they refused to support masseys request for a recorded vote. It will go to the president s desk for signature and presumably that will happen sooner rather than later, and definitely today. You may thanks that stocks pair their losses on this news, well, they are not. , and the nasdaq hall down 3 . The dollar index below 99 as well all day today. And just look into the bloomberg terminal, im looking at major central banks. They are all at 25 basis points or below when it comes to their benchmark interest rate. This following the canadian decision to drop to 25 basis points. Lets get to taylor riggs. Youre halfway into the trading day. Taylor some of the Federal Reserve stimulus is filtering its way through the stocks. Despite some of the floor action we are sitting on the price, you are having a pretty good week. Best week for stocks since 2001. China is coming back online, supporting supply chains over there. Back here andt the increased Data Center Demand and the increased pressure that is putting on chipmakers. Chips having a pretty good week. I want to highlight some of that michigans Consumer Sentiment. It was the worst drop since 2008. Interestingly, chris says that the consumers still do not know what has hit them. Confidence surveys are hitting holding up much better than expected. He calls consumers dear looking into the headlights completely unaware about the disaster that is set to hit him. At least according to economists, Consumer Sentiment poised to go lower and lower. I do want to talk about some of the other stocks. General motors and their ventilator maker says they had much of what they needed to ramp up production of the breathing machines. Then you have the tweet from donald trump asking them to produce more. Think a lot of confusion about what is going on there. You are getting some pressure on general motors. What is not seeing pressure as consumer staples. Take a look at colgate. They are getting two bullish upgrades. One coming from suntrust. He is raising his price cover target 275. Colgate is leading the hygiene wave. So, a few stocks out there that are still doing better than good. Amanda thanks much. Of course, more on the breaking news. The house has clear that 2 trillion stimulus package. Joseph stiglitz is in economics professor and former chair of the White House Council of economic advisors and ennoble and nobel prizewinning economist. We have officially a stimulus past. In terms of the way this will work, obviously money money into the hands of people is the first order of this news. There have been those who say it is still not enough. When you look at the 2 trillion, is there a chance more will be needed . Prof. Stiglitz that would pandemic how long the continues. All of the indications are it is very highrisk that it will continue long enough that there will be need to be more money. There are some big deficiencies in the bill. Wasmost important inadequate aid to the states and localities which are on the frontline. The revenues are limiting. They have balancedbudget frameworks. With the revenues plummeting, they will have to cut back. The other sector that did not get anywhere near the attention is the nonprofit sector, which includes our educational institutions, our research institutions. Vital to the future of our country. They did not have the lobbyist that the Airline Industry and the other Corporate Giants had. That left out of the picture. Vonnie the Federal Reserve and its president keep reiterating that the economy is in a strong position before we went into this. Is that all now by the whiteside . The wayside . If you look more carefully at the economy, it was not on strong footing. What was striking to me about the economy before the advent of the pandemic was that in spite of a 1 trillion deficit, growth was at estimated to be below 2 . Sign of a weak economy, not a strong economy. Investment was relatively mild. Well. Were not doing very incomes of ordinary americans were not doing well. I think what was striking about the economy was that it was not in a position that it should have been. Amanda obviously some of the systemic issues will be with us, but worsened. I think particularly of deteriorating Balance Sheets. We didnt learn any good lessons about saving and being prepared for a downturn. How much worse is it on the others of this . Prof. Stiglitz very much so. Although, the package them up the 2 trillion package, is making it much better than it otherwise would have been. We are absolutely right that we did not learn the lesson from 2008. We let a crisis go to waste. The decemberafter 2017 tax cut for corporations, rather than using that money to thed up a buffer against kinds of events like this one that always happen, what they did is they have almost 1 trillion of share buybacks, putting them in a much more precarious position. Many companies took out a lot of debt, taking advantage of the very low Interest Rates that ofe an anomaly at this stage the economic cycle. We actually almost encourage firms to get into that by those low Interest Rates. That was a result vonnie professor stiglitz, obviously i wanted to point out that the imf has said 81 requests have come in and not just from the most emerging economies. It just isnt enough money or reserves out there to pull them through. That said, you have written recently, the spread of diseases is one negative side effect of globalization. Does this presage the end of populist leaders or does it strengthen them . Let me highlight havemportant it is that we a Global Response to a pandemic, which is a Global Health crisis. Carryviruses dont passports, they dont carry visas. If we dont contain it [indiscernible] as you pointed out, a large number of emerging markets and developing countries will not be able to respond adequately. They dont have the resources that the United States has to be able to put in anything comparable, relative to their economy of the 2 trillion that the United States has passed. Meeting that g20 there will be more than just a commitment, rhetoric to do something. But there are concrete steps. Ifwould make a big help those dras were wing rights. For would make a difference the capability of the Global Economy to respond. Populists whosome will take advantage of the that,t situation to say we need to close our borders. , we cantbe clear shut ourselves off in the modern world. Resources, we need we need we need ideas, labor from one country to another. Inevitably going to be globally integrated. There is a question about whether countries should be somewhat more selfsufficient. The ideology that prevailed for the last 40 years that borders dont matter had already been undermined by the position that our own populist leader had taken. Countries are aware that borders matter. This will remind them how important it is that they have to look at things both from a global point of view and from a National Point of view. Vonnie thank you for joining us today. That is joseph stiglitz, former chief economist of the world bank and so much more. Lets get to washington dc for the latest on the stimulus bill that is now through the house. It did pass. A little moment of drama there. We will ask anna to summarize from us what just happened. Pass the 2ally did trillion economic rescue plan. There was a little bit of a delay because Thomas Massie, a kentucky republican, commanded that there be a roll call vote. They got around that by quickly counting the members of the chamber and deciding there was a quorum and he did not have enough support. Hearing theit by in the chamber. Amanda obviously the big key here is how quickly this turns into action, money into the hands of people and businesses. How long before we get the next step . Anna it depends on the provision. There are certain measures that will be able to be enacted quicker than others. We expect President Trump to sign this as soon as possible, certainly by the end of the day. When it comes to direct payments, those will go out faster to people who already receive monthly checks from the government. People who receive Social Security benefits. It will be a bit longer for those who did not file a tax 2019, because or the irs does not have the most updated data for them. For loans to be companies and Small Businesses, those can go through the Treasury Department in the case of the big companies. The treasury has 10 days to write those regulations. For Small Companies those loans can go through the banks that they already use or through the Small Business administration. Amanda thank you so much. Bloombergs congress reporter, anna edgerton. This is bloomberg. Vonnie this is bloomberg markets. Amanda im amanda lange in toronto. The house has cleared the stimulus bill to help combat the effect of the pandemic. The bill now heads to trump for his signature. For more we have our archean,. Rofessional Mauro Guillen thanks for being with us. Good news that it has passed. In terms of getting dollars in the hands and money to businesses, there is still a little bit of a lifetime here. What do you hope to see next in terms of the speed at which this can be dispersed . Mauro i think the most important thing is that some of these things can be put in place right away. For example, the loans and the cash for smaller firms. Some of the things will take a longer while. For example, expanding unemployment benefits. Its going to take a little while to get all of that money out, but i think its really important to get the money out to smaller forms smaller firms first. Vonnie how much can this be contained economically . Take 2t is going to trillion, perhaps a little bit more. We have 2 trillion that are going to be dispersed throughout the economy. Ins see what the reaction terms of gdp will be. Then, i think both parties in congress are ready to launch another round of stimulus for the economy. I think we should first implement the 2 trillion bill that has just passed. Paying a lot of attention to see what the reaction is. Amanda there is already strong reaction that there is not , as theor u. S. States front line of delivering a lot of the services that would combat the virus and obviously taking the economic hit. Do you see evidence that is the case . Mauro absolutely. Ecially in terms of filing fighting the war against the virus itself. Resources for the health care system. Theou know, the effect of pandemic are heavily concentrated in three or four states. Focus ourtherefore resources there, without neglecting the rest of the country. We need to be more focused. We are learning along the way. Vonnie the trouble is, that we know of. Its not that we have all of the data in the because the testing hasnt gone through yet either. The economyeas of that in spite of the stimulus package you are worried about right now . Mauro i would be very worried about the small firm sector. Am, someelphia where i stores have permanently closed. Of course, they had laid off all of their employees. We should try to avoid that. We should give companies enough money so they can stay in business. That is going to be less employees than moving to unemployment schemes. I think it is important to address that issue first. It is not just commercial Small Business enterprises, but manufacturing as well. Vonnie professor, thank you. Mauro guillen. Coming up, more on the stimulus package and what it will mean for street lenders. Will discuss with christopher maher, chairman of oceanfirst financial. This is bloomberg. This is bloomberg markets, im amanda line in toronto. Vonnie im vonnie quinn in new york. The house passing an unprecedented aid package that among other measures could make it easier for Community Banks to lend. For more lets bring in christopher maher, chairman and chief executive officer of oceanfirst. Jersey anded in new obviously you make a lot of local loans. Where are you seeing signs of trouble . Christopher we see a couple of signs. Its obvious places in the economy. It is the restaurant sector, it is the hotel sector really, across hospitality. Others are doing well. Anyone in logistics is having trouble keeping up with demand. This stimulus package is important. Front, i knowt that as of march 23, and likely this number has changed, but you received forbearance requests from 195 borrowers. What is the procedure in order to make sure that you can offer that and stay in business . Christopher weve been very proactive. We were one of the first banks to offer that proactive forbearance agreement. We have been reaching out to our commercial borrowers. We have had hundreds of those calls. We have touched about 2 billion worth of our Balance Sheet so far. Youre getting wonderful support from our clients. That isprior experience really helpful. We endured hurricane sandy, which was right in the middle of our markets. We had about 50,000 structures totally destroyed or substantially destroyed. We worked with millions of dollars worth of borrowers at that time. We found forbearance works. Good borrowers who had good businesses, two months ago, they just need a few months off to collect themselves, to get back going. Their losses were quite modest in that incident. We had less than 500,000 in chargeoffs. There were demands on you as well, right . How much is the Federal Reserve helping the likes of yourself . If you can just hold on, maybe everybody will be ok, but if you guys cant hold on, maybe everybody wont be ok. Had guests on talking about a bloodbath, quite frankly, in regional banks. Christopher i think a little bit of that has been overblown. When you compare this to 2008, in 2008 we had a system where we had six banks. Sick banks. We have strong banks. We have very Strong Capital levels. The conversations we have had with our regulators have been encouraging. From the first moment of this pandemic we have been in touch with our regulators, the Federal Reserve and the occ, and we have found them to be supportive, helping us understand what we needed to do. To let are you willing businesses go under if they should go under . Wonderfulr we had a Loan Portfolio with early strong followers. If you were strong 90 days ago, we are going to help you through this. We are going to help have you stepping with us. I think the vast majority of them are going to be fine. Amanda great to have your voice on this. Christopher maher, chairman and she el of and ceo of oceanfirst financial. From toronto and new york, this is bloomberg. Romaine it 2 00 p. M. In new york, 6 00 p. M. In london. Im romaine bostick. Scarlet im scarlet fu, anchoring from home. We are ending the week on a down note. This is something weve seen in weeks past. Romaine it should not be a total surprise. We saw a lot of the effect of that rebalancing play itself out over the past few days. Seeing a little bit of exhaustion today. Down about two and a half percent on the s p 500. We are up 10 on the week for the s p, setting up what is going to be our biggest weekly 2008. G back to 2000 we came into this week having one of the biggest down weeks we had seen on record. We had one of the best days ever on record for the dow jones on tuesday. The s p 500 capping a thr