The dollar still strong against currencies like the euro, but the commodityrelated currencies are performing really well in the em, as well as the g10 space. Time now for todays market moving news from our london and new york teams. We want to start with the markets after we have u. S. Futures rebounding. Joining me on the phone is bloombergs dani burger. The question i feel like, last week we saw the bottom, now feels off the table. Every day people are saying it is the bottom, it is not the bottom, but the picture continues to change. There is so much uncertainty. A bit of a lift in markets today. It is really the Energy Complex helping lead the way today, getting a boost from china beginning to buy oil for their state reserves. But any upside today is likely to lack conviction. Stocks in u. S. H fields are really starting to march higher. A slight backandforth in terms of u. S. 10 year yields, no moving lower after being just slightly higher today. Then you have to keep in mind that we started the quarter not only with steep declines, but now we are flying without the help of rebalancing flows. That is likely not going to have that fire in the market which we sought the end of the First Quarter. Then we have the numbers we are going to see over the next few weeks, be at the coronavirus or the economy. All of that is going to weigh heavily on risk appetite. It is way too soon to celebrate. He gains we had. Alix we should also take into walk us through the action we saw today. There are longterm reverberations of that, not just a daytoday pop. Dani i think it is really interesting when you look at munis. This is generally viewed as a haven. Typically dont have a ton of volatility. But when you look at 10 year highgrade debt yields, they soared 30 basis points. Longer dated did stuff come of those climbed more than 50 basis points. These swings are very rare for muni markets, but it is the world we are living in now. Corona has put local governments on the front line of a very Extensive Health emergency. Of course, this credit crisis is not just munis. Corporate debt really at the front and center of the pain as well, even despite the 2 trillion of economic stimulus that got past in the final days of the month. It is really starting to show the concern about credit worthiness of muni markets and corporates. Flurry of downgrades and fallen angels flooding the market. A very popular etf tracking junk bonds yesterday sold off nearly 3 . It is at 2 free market despite the fact that risk assets are starting to bounce. The fact that we have seen leverage players seeing a lot of pain and liquidation it had funds liquidation in hedge funds. What is moving at full speed as the new issue in corporate markets. Companies are taking full advantage of this, knowing their cash flow is going to be crushed with the economic freeze, but they are paying dearly for it. Carnival announced for billiondollar bond sales, one of the highest coupons ever. Alix really unreal. Thanks so much, bloombergs dani burger. Now i want to turn to the economy. Investors await the key u. S. Initial jobless claims data related to the virus shut down. Michael mckee spoke with austin fed president Eric Rosengren to get his read with boston fed president Eric Rosengren to get his read. I think it is quite likely by the end of this quarter, we will see an Unemployment Rate north of 10 . Michael mckee, Bloomberg International economics and policy correspondent, joins me with more. This kind of sets the stage for initial jobless claims, where anything goes. Ive heard estimates all over the map at this point. Michael they are, and the funny thing is Eric Rosengren is one of the more optimistic people by predicting only a 10 rise in unemployment. Lets call it the jobless claims chart. I heard you whistle last week when the number came out. Hold your breath because this week is probably going to be even worse. Right now, the forecast is three point 7 Million People will be on the unemployment rolls. That would beat last weeks 3. 3, which was four times the previous record. We are in uncharted territory. This is a much more timely indicator that gives us an early look at what is happening to the labor market. Sirenalso a screaming saying that the u. S. Economy is in big trouble right now. The 1 trillion question, does the fiscal rescue package that Congress Passed this week enabled enough companies to bring people back onto the payrolls quick enough . If it doesnt, what do those people do until jobs come back, if those jobs come back . That is the 1 trillion question. You want the bad news . We are hearing a lot of states are having trouble processing all of these claims. We could see, and numbers like numberswe could see the like this for another week or two. Another bellwether industry in the u. S. In big trouble. Of cars and auto parts came in at the lowest since april of 2010. The number is poised to be even worse this month. Of course, nobody is buying, not just retail. Rental Car Companies arent buying either. They are slimming down their fleets because no one is renting cars. There could be an even bigger blow to the auto industry. Who knows when the production lines will come back. We did have a fed announcement overnight. This one is not a spectacular, but perhaps much more important in some ways. The central bank is going to let wall street banks take on more leverage so they can absorb a severe lack of liquidity for treasuries, as the fed tries to work through the plumbing of the markets. The leverage ratio, which calculates basically each banks capital against its assets, will be relaxed about 2 over the course of this for one year. The biggest banks are no longer going to have to count ,reasuries against their assets and not have to maintain capital. The thinking is a lot of the banks have to take on treasuries as part of the acronym lending programs the fed set up, but with the leverage ratio to tight , this should free them up to participate more. Market participants say what it could also do is lead to more demand for treasuries and send us into negative right territory , at least in market rates. One other number out today, trade figures, but that is february. What it will show probably is a complete collapse in the imports from china. Alix totally. Mike, thanks for the round up. You will be sticking with me. Another story that caught my eye is chinas plan to take advantage of the epic crash we have seen in oil prices. Bloomberg learned that beijing is moving ahead with plans to buy up oil for its emergency reserves. China is the Worlds Largest oil importer, and the price of crude is down 60 this year. Is government stockpile basically an equivalent to 90 days of net imports. The strategic stockpiling by china is only going to equate to one Million Barrels per day. They have space, but nowhere near enough to zap up somewhere between 25 and 30 Million Barrels of oil a day of demand. Isnwhile, President Trump meeting with Oil Executives tomorrow. He once referred to the plunge in oil prices as a tax cut for americans. Now he says something has to be done to keep from losing u. S. Producers. It is brutal anywhere you look. Norways Sovereign Wealth Fund lost about 100 billion in the First Quarter due to that oil price slide. We do have a earnings from walgreens coming in. I want to update you on some of the numbers. They are going to keep their 20 keepbefore the pandemic their 2020 view before the pandemic broke out. They say they will give an update, but not just right now. They did see net sales coming in higher than estimated, earnings higher than estimated, but clearly more backward looking. Program, next on this more of all your morning news, trade and analysis of the market in todays first take. This is bloomberg. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and insiders, Damian Sassower, Bloomberg Intelligence emergingmarket credit strategist, as well as michael mckee, Bloomberg International economics and policy correspondent. Mike gave us the lay of the land on what to expect today. What are you looking at . Damian these markets are trading on technicals. Defunding market dislocations which im observing in all markets are quick and relentless. Just look at last week. We had tbills negative out to 3, 4 months. Now they are no longer negative in the u. S. Just look at cross currency basis swaps, i know the i beat this one to death with you, if i were a large institution, i would be positioning for the happier turn because we have no tightened to levels i have never before seen. What do you make of the you want of the yuan we yuanng today . Of the weakening today . Damian for me, has to do with the story on oil. Where are they going to store the oil, number one . Second, the refiners in china, it is a payasyougo scheme. Thats not going to fly. They are not going to get the bank funding to do that anymore. While it is a great headline that is driving oil up 10 today, i dont put much stock in it, really. Alix totally. No way is that even going to help remotely in terms of any of this for us any of the surplus. A headline breaking right now, boeing is now offering voluntary buyouts to eligible employees. We kind of expected this headline was coming. It is going to take time for the industry to recover from the crisis. They are going to continue to recruit in some areas. I feel like this is just the first of many Different Industries area we have already seen it in retail. They will have to come out and start cutting their labor force. Michael you had a lot of analysts say we are going to have a terrible Second Quarter, and then things will be better in the Third Quarter. In the fourth quarter, we should see a boom. The stock market is going to come back and everything will be rosy. And yet, then you start to see these kind of headlines and wonder, how long is this going to last . Heres a problem for boeing. They were shut down, building all these planes. Theyve got all these planes sitting on runways, the 737 max, that they couldnt deliver. Now they were going to send them out starting in may or june. But now nobody wants them because nobody is flying. So it is going to take a lot longer for boeing to start to recover. The same thing is happening, i mentioned the auto sales. Auto rental companies. So the big sleep buyers arent going to be buying the big fleet buyers arent going to be buying. That is the kind of damage this is going to do. Unless the virus turns around really quickly, maybe donald trump is right and it will go away when the weather gets warm, unless that happens, this will be a much longer problem than people are anticipating. , and anyolutely structural issues that come out of that as well. Taking that point to the credit market, what we learn is that investment grade, even though we see spreads widening, you can access the bond market if you are a junk company, but at really high yield. Take a look at carnival. Can you give me some perspective as to the em credit space, the highyield credit space in europe and the u. S. . Thats what we need to Pay Attention to. Damian you are speaking my language here. To me, em dollar liquidity has not returned to prior to the januaryfebruary period. We never saw this in the Global Financial crisis because we didnt have doddfrank, and dealers were able to intermediate in the market. People are just not trading. If you have to look at the whole of the u. S. Dollar spread asset i focal for me then point is commercial mortgagebacked securities, 500 billion market. Is a situation that really, quite frankly, is going to kill the Equity Investors. It benefits a lot of these lenders because the Equity Investors walk away from brent obligations. Thesee seeing all of duplications for where things are going to wind up. As we approach that date, i am really going to be focused on where spreads go and how it filters over into em and the broader ig and highyield asset classes. Alix i thought the fed was fixing all of that . [laughter] michael they are setting up programs to try to bring some relief to those markets, but the problem that the fed has is they dont know all of the cracks and crevice is where things are going wrong. We have seen things start to come out of the woodwork over the last couple of days, yesterday particularly bad and the credit market. The fed puts of these programs hoping that the people who are trying to get out of these trades can go to their bank, can go to their dealer, and put the trades to those dealers, and the fed can finance them. Thats not really working. What we are seeing come of the Leveraged Loan Market really crumble in recent days. What do you do with those loans . Them ifs got to buy they are particularly not investment grade, and the fed cant take them. Theres a lot of investors in the shadow market that the fed cant do anything about, and they are kind of crossing your fingers at this point. Alix so for the emergingmarket ,orld and the relation to that what can the central Bank Emerging markets do . There was an article on the bloomberg that said the more stimulus the u. S. Actually does come the worse it can be for emergingmarket countries because the carry trade is done etc. Damian for me, it is going to be about how much a lot of these emergingmarket Central Banks are going to take their real rate economies. We are still expecting cuts across asia. Egypt is probably going to leave rates on hold. The cut glass time. Next week we see south africa and turkey. The levels in emfx are just bloody. Is through 24. The rand is at 18. 38. These levels just keep getting worse and worse, and i dont see any end to the bloodletting. So theres no need for them to get involved. They are just devastating for global trade because all of the trade finance agree must trade finance agreements must be repapered. The players who backed these trade finances are going to get a hit off of this. Alix it is such a good point. You also have countries hoard the stuff, so there might not be anything to ship at the end of the day. Damian sassower, thanks a lot. My, key, thank you as well. Any charts we use throughout the show, no to gtv on your terminal. This is bloomberg. Viviana this is bloomberg daybreak. Boeing Just Announced moments ago voluntary buyouts to its 161,000 employees. No word on how money workers a Company Hopes to cut. Boeing facing a sharp contraction in demand because of the coronavirus pandemic. About 44 of its global fleet are parked. The federal trade commission is suing cigarette maker altria. Regulators want altria to unwind a 12. 8 billion in Vaping Company juul. The ftc says the two companies are competitors who shouldnt be in business together. Altria is vowing to defend the deal. Still, it has already written down the value of the stake by roughly 2 3. Softbank is scrapping the 3 billion deal to buy wework stock. Last week, the stock repurchase was part of softbanks rescue package for wework, but softbank notified to the shareholders conditions for the deal hadnt been met. That is your Bloomberg Business flash. Alix thanks so much, viviana. Institutional investors are the most bullish on stocks since early 2018, according to rbc, which says that means the bottom is not in yet. A note overnight says that the surprisingly high level of bullishness shows that we havent seen investor capitulation. We view capitulation as a necessary, though not sufficient condition for stock market bottoms and major drawdowns. Joining me now is anna han, wells fargo equity strategist. Do you agree that we havent yet seen that capitulation . Anna that is a common question we have been getting, and frankly, we disagree. We think we have seen the bottom of the market, and that was around the low we saw last week. When we are selling off down to the close of 2237, we see panic selling. Panic selling, flows driven by technicals, and this goes handinhand with crushed Investor Confidence and peak uncertainty. But since then, weve had this comprehensive monetary easing and fiscal stimulus. Arrived bigger and these have both arrived bigger and better than what we got during the financial crisis. Reassess these supportive measures, and that time has allowed us to cool our heads a bit. Economyurse in the real , the next few quarters will be quite difficult. Equities could move over from here, but assuming we can see in coronavirus peak coming thes, we think we have seen bottom. Alix what are you looking at now . Anna we are asking investors to move up on the quality spectrum, and in particular, to look at the low leverage names. It allows you to protect on the downside, but also purchase a paid the upside. While we have seen that Monetary Policy has done everything, that whole kitchen sink, to make sure credit markets are staying fluid, we think it is still going to become a couple of bumpy months. We ask investors to stay high quality and protector portfolios. Alix anna, hang tight with me. Anna han of wells fargo securities. Coming up, italy coronavirus cases show signs of stabilization, but there a longer lasting impact. Thats coming up after the break. This is bloomberg. Shouldnt you pay less when you use less data . Now you can. Because Xfinity Mobile gives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 300 off when you buy a new Samsung Galaxy s20 ultra. Thats simple. Easy. Awesome. Go to xfinitymobile. Com today. Alix welcome to bloomberg daybreak. In the markets, we had the worst start to a quarter yesterday since 1928. Now we are trying to rebound, but we are off the highs of the session. The ibex in europe is actually turning negative. Oil stocks going to outperform because you have oil prices outperforming, up by about 10 . China is buying. Perhaps President Trump could broker some kind of deal. All of that playing with optimism in the market. It is hard to see any real material impact. 60 basis points is still where we sit on the 10 year. The vix trading around where we see normally, although totally a from that 19 weve averaged for the last decade. The coronavirus is showing signs of moderation in italy, which has been the center of the crisis in europe. Officials warned that lockdown must remain in place for much longer. You hear the same thing from hong kong moments ago. Theyre going to shut down bars, etc. For the next 14 days. Going me on the phone from milan s michael spence, General Atlantic Senior Advisor and nobel laureate. It is really great to talk to you. Before we get to the piece that you wrote, how are you . How are things there . We are like everybody else here, lying low, staying in our house, and really only going out to do the essential things like go to the supermarket. If you are careful, you can probably stay safe. That is certainly what we in most of our friends are doing here. Is there a sense there, and this feeds into the article you wrote, of how and when things can go back to normal, and what normal even looks like . Michael until recently, we havent had much sense of that because we really didnt know how effective and when the lockdown would produce the desired effect. As you mentioned a moment ago, we are seeing preliminary eminence that a nationwide lockdown is actually working to slow the spread of the virus. But we have a ways to go. The medical system, especially in the north of italy, is still overwhelmed, so we have a ways to go for we get the rate of critical cases coming down to a considert we can even making a transition to a kind of different regime. What i was talking about in the article go ahead. Alix i was going to ask you about your article anyway, so go ahead, michael. Michael at some point, the cost of keeping schools closed for very long periods of time, and the cost of trying to keep businesses from failing that dont have any customers now, restaurants, hotels, airlines and so on gets so high that you have to start trying to think through how do you restart the economy. I think the wrong way to do it is just to declare victory and sort of stop the lockdown, which stop the lockdown. What you need is some carefully tailored version of the testing and tracking regime that the World Health Organization and pretty much the entire medical establishment are saying is what we need to deal with the virus once we get the numbers down to a certain point. The point i was trying to make is that is exactly the same thing you need to get the economy going. Right now, everybody represents the same risk. Is transitiono do to a regime where, when we go out on the street, people think, well, the reason that person is out here is because they have been certified somehow to be in a low risk category because we were tracking the high risk ones and treating and or isolating them as needed. So the prescriptions for how to kind of get out of this in a sensible way from a health point of view i think are an important part of a good and relatively rapid economic recovery, too. Alix does that wind up meaning that it is going to be a slow opening up of the economy because we are going to be testing the workers that then will be allowed to go back to work, go back to stores, go back to buy stuff . Is that the prescription youre basically laying out . Then,l yeah, but even that applies to the demandside, too. Given the state we are in right now, if the government said, ok, lockdown is over, i dont see that people will rush to go to a restaurant. Some will. The vast majority will say that is way too risky. So the program is to is amatically, because it very laborintensive process, reduce the risk for both buyers and workers at the same time. Is a good point because then you will actually feel safe to go out and spend, which raises the question, and the beginning of this, months ago come we talked about a vshaped recovery. Now we are talking about a ushaped recovery. Is it even appropriate to talk about a letter . [laughter] michael i dont know. Ande got vs and us, recently a w. Maybe we should just drop that. , a u seemsk probably to be, i would guess, the best sort of analogy to help people thing about it. Because wey unlikely just cant get rid of the risk that quickly. There will be lingering effects and difficult choices and tradeoffs to make. Also, you know, the nature of this recovery is also going to depend on the effectiveness of the policy measures. We had this huge fiscal stimulus in america, but it will be repeated here in italy in some form or another. It is designed to help people and families get through this period, especially ones who have lost their jobs, and try to help businesses that might fail without support so that they can come back into business. So allocating the funds is one thing. I think that is doable. Governments know what they are doing, and Central Banks, as you mentioned before, i definitely on board. They are going to lower the Interest Rates and expand the fiscal space to make this possible. It will have longterm consequences, but this is an emergency. But then we have to get the money actually to the places that need it, and i think thats the hard part. A good challenge. Alix that raises the question, when we talk about a u, a u applies something that is symmetric. I have a really hard time seeing that our economy is going to be the same coming out of this, no matter what. Michael thats fair. In thata u is probably, sense, inaccurate. By asharp drop followed recovery that is slow at the start, and one hopes eventually we can accelerate it, but i think youre right. Modeling theu are support that is going to be needed to throw firepower at all of these economies to get them started again, how do you view specifically situations like italy, where it seems like crises move so much faster than policies that it doesnt seem that the european leaders can get their act together enough to get something comprehensive done . Thinkl well, here i there is a longterm issue in europe which has to do with fiscal transfers and whether we are all in this together or not. But in this case, i think even for a highly indebted country like italy, meaning high sovereign debt environment, an emergency efficiently large that, even if we dont have agreements that support each , the at the european level individual governments, including this one, will be able to act because the Central Banks will make it possible, and the borrowing at the very low Interest Rates will be sustainable, at least in the short and medium run. Right to just set aside the issues that europe has with either eurobonds or some other form of cooperation in the support, but i think it is wrong to assume that is crucial to have an Effective Response in europe. I think we can do this country by country with the ecb standing behind us. Appreciateel, really your time today. Thank you very much, michael spence, General Atlantic Senior Advisor and nobel laureate. Stay safe. Still with me on the phone is anna han of wells fargo securities. We were talking about the type of recovery we will see. When you are modeling your forecast of what to buy at the moment for a longterm time horizon, what does that economy look like . Speaking, wecally see significant slowdown in the gdp in the second and Third Quarter. That is pretty general consensus across the sell side. By fourth quarter, we expect the u. S. Economy to be on the mend, but the things we are going to be watching closely are really jobs, unemployment, and corporate earnings to see how we might change or adjust. But rather than a u or a v, this could be a very slow return and recovery, and we agree that this will take a couple of quarters. We expect the reopening of businesses will probably more in will probably be more in tranches. Good point. A i feel like we will probably get a look at that in earnings. How do you feel about earnings when companies have no feel as to what their margins will be like, what their sales and earnings will be like, and also if they are able to issue any buybacks, which has been a key support for the markets . Anna corporate earnings is a tough one, and it could be ugly in the near term, to be frank. Many of us are flying blind into the upcoming earnings season. We know generally that certain sectors are more susceptible to the demand shock we had, and some Lifestyle Changes brought upon us by this forced quarantine could be lasting and industry changing. We need to stay nimble here, but broader picture, think about credit liquidity. Much thanks to the fed and the stimulus for this helping. We can see this starting to recover in fourth quarter. That should help, at least in the long term, for companies to see somewhat that return to normalcy, but until then, another thing you mentioned, buybacks. Youve seen a lot of companies suspending buybacks, whether it is voluntary or in some ways pressured either investors. That stopping of shared repurchases, anyway it is poor news, but that also means that allocated cash they had prepared to do those share buybacks are now going to help those companies with increased liquidity. Alix fair. That is a really good point. Anna han of wells fargo securities, thanks a lot. We want to give you an update on what is making headlines outside the business world. 50 anna hurtado is here with first word news. Viviana china accusing the u. S. Of trying to shift blame for its own response to coronavirus. U. S. Intelligence saying china concealed the extent of the problem. They concluded beijing under reported both the total cases and deaths. China that moral slander. China callingg that moral slander. Spain now has more than 110,000 confirmed cases, the secondmost severe outbreak in europe after italy. U. S. D on capitol hill, and Senate Majority leader Mitch Mcconnell telling the Washington Post he would ignore efforts by u. S. Speaker and people are said to get talks going. He says hes concerned about how congress would pay for another wave of federal spending. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Alix thanks so much. Coming up, the fed tells wall street, go ahead, take on more leverage. More on the move to relax limits on the leverage ratio for banks, coming up in todays wall street eat. Ash wallve a bloomberg street beat. If you have a bloomberg terminal, check out wall street beat. If you have a bloomberg terminal , check out tv. This is bloomberg. This is bloomberg. Viviana this is bloomberg daybreak. Coming up in the next hour, derek webster, cardflight founder and ceo. Watchingyou are bloomberg daybreak. Become the second u. S. Airline to apply for federal aid. In a filing today, southwest says it is looking for possible grants. They could boost liquidity and provide job security for its employees. American airlines has said it will ask for up to 12 billion in aid. Pricedl cruise lines share sales after cutting twice. It will sell 500 million of shares. They originally hoped to sell more than 1. 2 billion of stock. The company is also selling more than 4 billion of debt. Losing 14nd billion, a record loss and a decline of almost 15 . Equities plunging 21 . Bonds gaining a little more than 1 . Im viviana hurtado. Thats your Bloomberg Business flash. Alix thanks so much. I just want to break some news for you. The German Government says they see the economy contracting more than 5 in 2020. They do see a return to growth in 2021, but they say probably return to growth in 2021. Economy the German Affairs minister saying it is obviously the Economic Impact that depends on how long the crisis lasts. In the first half of the year, we are looking at contraction of more than 8 . Some pretty staggering headlines coming out of germany right now. Just taking a quick check in here on what the euro is doing. It is right around the lows of the session. Sits. Is where eurodollar time now for wall street beat. First, the fed letting loose on leverage for wall street. Then a 3 billiondollar fund faces a 30 drop. And softbank scraps its deal to buy wework stock. Joining us is bloombergs sonali basak. So the fed yesterday loosening those leverage rules, basically capitale up some to spend. Sonali banks should be more or less excited about this because it does free up their funds. Is this the right time to be doing that when they are seeing so many stresses in the economy . Time will tell how much this really frees up the banks to take more risk, extend their Balance Sheets. This is really meant to also free up issues in the treasury markets where we saw a lot of freezing up during the last six months. Time will tell if this is going to work for the banks or not. Supported this new change was while brainerd, she wasnt for some of the other changes the Federal Reserve was making for these banks. Alix fair point. Sticking with some of the big wall street guys, the Treasury Department is going to hire 3 wall st banks for some advice on how they are going to execute some of the programs. Sonali super interesting list of characters here. We have here pjt, whose run by someone who was at goldman during the last last crisis. Then you have two players who played a role in the last crisis. The big thing about these folks is they will be helping with airlines, according to reports from the wall street journal, but they are also not conflicted in the way the banks are. Banks have credit lines already to a lot of these firms. It will be interesting to see where the banks play in the other rounds of this rescue package. Remember, it is not that the banks dont have a role at all even though the independent firms were chosen. The banks will still be lending and finding other ways to be involved in the story. Alix good point. Even blackrock having to work with the government as well. Lets get to softbank. Sonali according to reporting from my colleagues, they were selling credit protection here. They saw a lot of their , deutsche bets lufthansa, whiting petroleum. We did see a lot of rebounding from a lot of other funds. We saw ken griffin and citadel up on the First Quarter. That was very good. Then we saw some losses among equity funds like viking. It really a mixed bag among hedge funds. Theyre going to be watching closely, especially of some of them had extended a lot of leverage and a lot of risk in the last couple of months before these issues arrived. Alix alix no kidding. Lets wrap up the third one, which is softbank scrapping a 3 billiondollar deal to buy wework stock. Workers were really counting on this. Sonali the workers really hated this bailout package to begin with because of that payment to adam neumann. The chief legal officer told my colleagues they remain committed to wework, it is just that they are not committed to this part of the package because they believe that there are some terms that hadnt been satisfied. Theres some regulatory issues surrounding we were up at this time. This could get messy moving forward with the special committee not all agreeing to softbank pops to softbanks decision. Alix in todays off the beaten street, casino billionaire Sheldon Adelson has closed his vegas hotels, but he is paying employee is paying employees as though they are still on the job. He writes that workers will stay on the payroll for two months. The company is even trying to make up for nice tips for lost tips. He says any business that can do what he is doing should do it. Inspirational, ive got to say. Ing up, the bank swap line coming up, the fed bank swap helpextended should. This is bloomberg. Alix the feds extending Balance Sheets whats best damianeet swaps sassower is joining me. Damian we are seeing a lot of downgrades coming from the big three rating agencies for emergingmarket sovereigns. We seen a ton of downgrades in the last few weeks. That breaks the fiveyear upward trend we have seen of the number of upgrades to downgrades across the whole of e. M. It is really reflected in their currencies. Weve seen a bit of a recovery in terms of positioning, and terms of looking at risk reversals and things, but we are still nearly two standard deviations above the threemonth average, which means you could see a little bit of nearterm respite, and we definitely need to see that with a lot of the stimulus to work its way into these domestic economies. Alix we will definitely be paying attention to that e. M. Commodity currencies did a boost today. Thanks so much, Damian Sassower of Bloomberg Intelligence. Coming up on the program, art hogan of National Securities and alisa levine of bny mellon Investment Management as we look ahead to initial jobless claims coming out in about a halfhour. Just how bad are they . Will receive revisions even higher for the previous week . All of that coming up. This is bloomberg. Alix welcome to bloomberg on this americas thursday, april 2. Im alix steel. Lets take it from the top. China says the u. S. Should stop politicizing Health Issues after the u. S. Intelligence community concluded that china concealed the extent of the out i can the country. Some even called the numbers fake. Pres. Trump the numbers seem to be a little bit on the light side, and i am being nice when i say that. The Foreign Ministry says some u. S. Officials want to shift the blame. They see this as what they call moral slander. Alix new york and new jersey deaths have doubled in three days, and l. A. Asks the whole city to wear masks outside. It is quite likely by the end of this quarter we will see in on a ploy meant right north of 10 . See an Unemployment Rate north of 10 . Unfortunately, these facilities do take some time. We are doing it as fast as possible. Alix meanwhile, the fed lowers leverage ratios for bank to free up capital as people rushed to deposit cash. This should free them up to participate more, but Market Participants say what it could also do is lead to more demand n send usuries the into negative rate territory. See believeomists i it is a reversion back to an economy that almost gets back to the same size. Alix ceo of bank of america soundmoynahan try to upbeat. At the same time, the credit and Municipal Market are still facing whipsaw action, leading to higher borrowing cost for indebted cities and companies. We have to keep in mind that we have started the quarter not only with steep declines, but now we are flying without the help of rebalancing flows. That is likely not going to have that buyer in the market which we saw at the end of the First Quarter. Alix today, the markets breathe a sigh of relief as china ramps up oil buying and the u. S. Gets the next highfrequency read on jobs. S phe markets, we have the having its worst start to a quarter since 1928. No doubt we will see some kind of rebound today. Initial jobless claims in about an hour will help set the tone. Part of it is that oil bounce, up by about 10 . It will be hard to see how russia and saudi come to the table now. We are seeing reports of tank germany. G reached in some grim outlooks continuing. Going me now for more on their take is art hogan, National Securities chief market strategist, and alisa levine, bny mellon Investment Management chief investment strategist. Have we seen the bottom and equity markets . Art it feels as though we are in the bottoming process right now. Steps. Kes three the first step is to have that real panic selloff we got for the s p, 2250 level. Weve bounced significantly higher than that. My guess is you get that relief rally into realizing that you probably priced the worst Case Scenario, and then the news hits. That tsunami of news is going to come in the Economic Data, like today with the jobless claims, and new cases like we are seeing in new york that will spread across the country. Until we get some Market Reaction to that, it is hard to know exactly when, but we will likely test that low level. If that low level test holds at the 2250 level on the s p 500, then we can work our way quickly higher, understanding that the news has to get worse before it gets better, but markets will understand we have probably priced in as much damage as we need to in the near term for stocks. Come aboutly will walgreens said we are not revising our 2020 outlook for the pandemic. We will have to come about we dont know what that looks like. Earnings season kicks off soon. How do you look at it, then . Alicia the earnings estimates that are out there are still about 165 for the year, and that is simply not believable. Earnings for 2020 is a black hole. Therefore, when calling the bottom, you do have an issue of what fair value is if you dont know what earnings are for 2020. I think the best Case Scenario is probably down 25 on the year, and worstcase 50 on the year, and then you have to put some sort of growth rate after that at a multiple. Saying, i dont think we are necessarily looking for a bottom yet. Think there is risk to the downside here only because many of the takes on this, and i think your interview with example ofs an this, are seeing a vshaped scenario. For 2020cut to etf really requires a vshaped recovery and nothing worse than that. Alix i guess the question becomes, if we dont know what letter the recovery is going to look like and we dont have visibility on earnings, but we are in the bottoming process, how do you know what to actually put your money to work into . Art art the way we look at that from a first and foremost, if you are a longterm investor, rebalanceeim to this is a time to rebalance and write out the storm. This is something we will recover from. At a certain time, we will get a peek in case risk every a and in new case discovery begin to go down. Look at names that have been more durable during the sellout, that will likely outperform the market when things bounce. It is all the household names you can think of that are sector leaders and the important sectors right now. In financials, looking at j. P. Morgan. In technology, talking about ibm, cisco, microsoft, amazon, and google. It is those names that have outperformed on the way down, and will likely be more durable on the way up. The third thing is right now, if you are feeling like you want to get more defensive, i think it is much more appropriate to stay away from some of the defensive sectors that still remain extremely defensive. The u. S. Treasury extremely overbought. Staples continue to be overbought. We would rather have you raise enough cash than to pile into some of those defenses that are very crowded and expensive right now. Alix its a great point. The stocks that you did talk about heaven, and that they also have buybacks and dividends. Now there are a lot of questions as to whether we will see the pace of buybacks. You have banks in europe suspending their dividends. Others doing the same. How do you value the s p when you have to rethink the buyback Dividend Strategy . Alicia alicia that is actually the underbody of all of this. Last year, buybacks gave 2 extra from net income into earnings. You got to percent extra from that. Then you have the dividends. Part of the reason you had financials so weak yesterday is because of the news out of europe. Is noth return strategy going to be successful Going Forward because you are going to have a suspension of buybacks, and dividends across companies are going to come under threat. Whether or not it happens in the financial sector, it is very clear that financials are going to try to maintain their dividend throughout this, and with the fed support, may be able to do it because they will be able to keep capital ratios intact here. But that should be seen as a possible risk area. What we know it is when dividends are suspended and past 2008, it can take up to 10 years to return to the previous levels once dividends are cut if it is a crisis of the magnitude of this. Something to keep in mind if you are an investor looking for income. Alix alix that is a pretty staggering statistic alix that is a pretty staggering statistic. Art, you said you would want to go to dividend growers. Table, it off the looks like you can only go to ebita. What do you think . Art i think thats right. I think it is difficult to use either historic evident payouts and historic yields or current pay ratios because current pe ratios because we dont know what it will look like at that point. Companies that have strong free cash flow, agnostic of what is going on in the mobile growth dynamic, i think what we are forgetting here is that we will see some recovery in the back half of this year that is likely much better than the first half of this year. The Second Quarter is obviously going to be the apex of bad news, both in Economic Data and growth, and certainly new case discovery. We would suggest the back half probably looks a modicum better than the front half. What we would suggest is thing about the 16 t5 number we talked about for earnings estimates on the s p 500 area since we are in the Second Quarter now, i thick it makes a great deal of sense to be focusing on that and put a recession multiple on that. A 14 multiple makes sense. I think 2250, 23 hundred is the defensible level of the s p 500 here. We have to stomach a lot of bad news, but i think that is what we will test in terms of a bottom. Alix fair enough. Thanks, guys. You are going to be sticking with me. Art, you actually talk slower on the phone than on television. Brent plunging over the first quart of this year. More on that next. Volvo is out with some of its auto numbers. We will get some of that as well. In march, down 31 . Unbelievable decline. Volvo march sales down 31 . This is bloomberg. By aboutll futures up 10 oil futures up by about 10 today. Hopes that china will buy more oil to stockpile in reserves, but it wont do much for the demand situation. Art hogan and Alisha Levine still with me. How do you look at the Energy Sector right now . Alicia the Energy Sector has a double whammy. It has a supply problem and a terrible demand problem. Gdp is now staying at home. 50 . So you have a terrible demand problem. It is not clear to me that if there is any kind of agreement between saudi and russia in any way that this will necessarily help pricing in the oil market because the main problem is the demand problem. Not so much the supply. I am suspicious here of any hope that oil pricing can go any higher. Alix i am right with you. Art, what do you think . Art alisha brings up a great point in terms of the double whammy energy is facing. I do think saudi arabia and russia get together and decide not to have a mutually destructive price war. They are both too dependent on revenues coming from hydrocarbons in both of their economies. My guess is at some point in time, they get back to the table and come to their senses and have at least a modicum of a production cut, call it a Million Barrels a day. In 1. 5 million when they brought opec . Going to start picking up as they get further back into business. From our checks on the ground in china, they are north of 70 online. I think we are going to start to incrementally see, as countries start to get back to business on the others of this curve, the demand slowly picks up. It is not a rosy picture, but it is not as bad as what is being priced in and the oil markets right now. Alix what does feel really bad is the aftershocks on the credit market. Energy is a smaller portion of highyield then it was in 2015, but you can make the argument that ig is going to hang in there, but i goldman sachs, you could see 100 billion worth of fallen angels. How do you look at the credit market what the fed ended to fix it . Alicia the fed picks winners, and the winners are the aaa and investment grade, and clearly the bbb players here are at risk of falling into highyield. I just dont see, watching markets for 20 years, i dont know how you isolate defaults in the energy patch within highyield and keep a hard dome over it and not have the rest of the highyield sector really selloff here. I think theres a lot of unknowns out there. Rumsfeld said theres the known unknowns and the unknown unknowns, and i think the highly leveraged credits are really where we are going to see the problem. I cannot see this contagion stopping just with energy. Alix right. So what is the trickledown effect with that, in terms of small caps, for example . How can we get any kind of meaningful recovery when you have the risk of fallen angels . Art i think you bring up a really good point. To the end of that point, when we think about the aftershock, small caps are going to be hardest hit. Has gote fiscal policy a section in it that is going to alleviate some of the pressure for small and medium businesses, it is going to take a while. We heard that yesterday. We heard it from Eric Rosengren of boston. Point, the the fed is going to be buying bonds, but they are going to pick the winners. Suspect they are going to look at highgrade corporates, and to an extent, munis. Municipals i would be more concerned about getting support for in an illiquid market than what we do know, and what the known unknown right now is that the oil patch is in trouble right now. We will see some companies go under the waves. Alix to that point, you brought up muniz, and we will talk about that you brought up munis, and we will talk about that in a second, but the idea that some people will have to sell some things when they dont want to. Are we still in the world of deleveraging here . Art i think we are. I think you approached it exactly the Way Investors have to approach it, too. You have to sell things now and raise cash. You need to be in a position where you can defensively have cash on your Balance Sheet for those needs. The deleveraging process is not over necessarily. So you will see pressure on illiquid markets like the munis. We have seen people struggling to get munis off their books. Thats where we hope the Federal Reserve will be the buyer of last resort. Thats the large part of what this Quantitative Easing Program is. It is historically large, but it is also there for other asset were liquidity has dried up over the last several weeks. Alix great conversation, guys. Really appreciate it. Art hogan of National Securities and Alisha Levine of bny mellon Investment Management. Coming up, how the pandemic has put a lot of pressure on borrowing costs for counties. We will look at the response to the virus, next. This is bloomberg. Viviana you are watching bloomberg daybreak. Boeing announced voluntary buyouts to its 161,000 employees. No word on how many workers the company will cut. Boeing is facing a sharp hit to demand because of the global pandemic. About 40 of the fleet is part. Southwest will become the second u. S. Airline to apply for federal aid. Southwest says it is looking for a possible grant. They could boost liquidity and provide job security for its employees. American airlines will ask for up to 12 billion in aid. We end with a rout in the Municipal Bond market. Prices retreated from last weeks rally triggered by the federal government stimulus plan. Some traders say they news about the coronavirus pandemic is pushing investors back to the safest securities. That is your Bloomberg Business flash. Alix thanks so much. For more on the turmoil in the 4 trillion muni market, but reporter Amanda Albright joins us now. Bloomberg reporter Amanda Albright joins us now. Can you give a seasons of how many of this investors selling because they have to, or is it cities and counties having such a dent in their tax return and Revenue Growth that they are really going to struggle . Could makehink you the argument that it is a little but of both. At first, investors attributed the selling to just a panic selling, not a stuff of any real credit concerns. Virus hitting different sectors, there are real credit impacts from the coronavirus. Alix just how much worse could it get . Can you give us some figures of what we have seen and what we are looking like . Amanda last week, there was a huge rally in the muni market, but yesterday, we saw a massive selloff again, which i think took investors by surprise. Yields through about 50 basis points in a day. Not used to seeing that until march 2020. I think investors are kind of worried about what the bottom could be because mutual funds, the big buyer in the muni market, they have continued to see outflows. With that, that creates a lot of pressure on the market because that selling can beget more selling as people see the losses on their ritual fund statements. Alix the fed is buying muniz, right . Is buying munis, when is that taking effect . Amanda that may have driven some of the selloff yesterday. We havent seen the fed spell out exactly what they are going to do in the muni market, so investors are waiting for those details. Some lawmakers have raised the concern that may be the fed is too hesitant to enter the muni market even though the have these powers now. Weve seen a lot of urging by lobbying groups that the fed to act quickly, but so far we havent seen any news from the central bank on that. Alix have we seen the lenny aided selloffs in the muni market, either cities have we seen delineated selloffs in the muni market, or is it kind of across the board . Amanda i would describe it as a baby with the bathwater trade. We are seeing a lot of different needs get hit pretty strongly. We have seen certain sectors like airport bonds, especially affected by the selloff, which makes sense because people arent flying. We are also starting to see downgrades of hotel bonds, convention centers, stadiums. We are starting to see that credit risk really rear its head. There are questions about whether large states and cities could start to see their Credit Ratings tank as well. Alix really appreciate that. Definitely something to keep watching. Ombergs amanda all right bloombergs Amanda Albright, thank you so much. Coming up, initial jobless claims. Your highfrequency data with david wilcox coming up. Initial jobless claims coming. We will break that down. This is bloomberg. Welcome to bloomberg daybreak americas. I am alix steel. A quick check on the markets. After the worst start of the Second Quarter for the s p yesterday since 1928. You are seeing a Little Movement with some riskier currency as Oil Continues to grind, it is way higher as well. Not a lot of movement in the treasury market. The dollar is premuch flat. As we wait for initial jobless claims, the trade balance coming in at 39 point 9 billion. Initial jobless claims, coming in at 6. 6 million. The highest estimate i saw was 4 million or 5 million. Jobless claims, 6. 6 Million People. Continuing claims up by about 3 million. Terrible numbers. We knew they were going to be terrible, it is just a question of how long a question of how long it in some blasting. The 3. 3 million from about 3. 2 8 million, not a big revision, but a huge jump this week. David wilcox is here. David also served as the director of the fed division of research and statistics. I am like, wow. We knew they were going to be bad. Funael it is as much watching your face as these numbers come over as anything else. For 6. 5orecast was million. This blows away at the forecast. Almost 6. 7 million this week. Justevision last week, it points out how bad this is for the u. S. Economy. We were at Something Like 210,000. We have added about 9 million Unemployed People to the unemployment rolls. Maybe 3. 8 torom somewhere around 10 unemployment right now. That wont show up on friday because the numbers are based on the first part of the month, but we are looking at some really scary numbers Going Forward. Bank of america came out with a new forecast just a short while ago. They think we will see contraction into the Third Quarter and get up to 15. 9 unemployment. Things are looking pretty bad with these numbers. The one thing we dont have yet because all these things come out slowly is the statebystate breakdown to see where the biggest increases are. Remember last week, we did not have the biggest increases in california and new york that people were expecting, pennsylvania was the leader. Alix no doubt. We have heard things like websites going down, people not being able to register, could it be worse than what we are seeing . David wilcox, what is your initial reaction of these jobless claims numbers . David it is difficult to fathom just how unprecedented these numbers are. Here is one way to get a handle on the question. Together, the revised number for last week plus the initial estimate for this week totals nearly 10 million initial claims in just two weeks. Inozen years ago starting september 2008, just as the u. S. Economy was entering the worst phase of the financial crisis since the great depression, it took about 19 weeks for that many claims to be filed. These numbers are just plain off the charts. Alix david, can you help me understand the logistics of how this affects the Unemployment Rate . It wont be seen in fridays fridays data,in but what is the Multiplier Effect . David there is a mechanical link of data that is collected through two entirely different systems the bureau of labor statistics will report tomorrow a payroll jobs number that is focused on pay periods centered around march 12. The is too early to show numbers reflected in last weeks claim number and this mornings claim number. There is a survey of households that generates the Unemployment Rate. Data were collected too early to really show the complete scale of the devastation that is happening right now. We will need to wait another month for that to happen. Aboutmike, you talked this yesterday and he said Unemployment Rate could reach 10 . You were talking about how that could be on the lower end of the rate that we could actually see. Wasael bank of america 15. 9 . Jim bullard was talking about 30 at some point. When we talk to him this week, he said it still seems reasonable. Somewhere in that range. You are getting to a number now were a dozen matter what the actual number are, it is so staggering and it is coming so fast that the damage in the economy will be so great in the short run, we have never seen anything like it. Forecast,f america the team said this will be the worst recession in american history. You get into the question of, what is the difference between a recession and a depression . It might not last long enough that people think of it as a depression, but we are looking at numbers that would fit the pattern. Alix unbelievable. I see downgrade after downgrade from all of the big banks, bank of america the latest. David wilcox, the fed, the government are committed to step in. People will get checks cut to them. Unemployment benefits will be increased by 600. In your calculations, will any of this be enough . A crucialwill provide amount of Financial Assistance to tens of millions of american households. What we are really in right now is a race against time. Last friday, the president signed into law the emergency the largest emergency spending bill in u. S. History. This mornings claims numbers underscore how badly american households need the Financial Support that will be provided in that bill. Getting the money out that is provided in that bill will be difficult. There are four main sources of Financial Support, direct payment to households that received a lot of discussion, 1200 per adult and 500 per child under the age of 17. There is expanded unemployment insurance. There is a provision that allows mortgage Payment Relief and a foreclosure moratorium for certain owners of mortgages. Ton there are the loans Small Businesses and other organizations that can be converted to grants. Those will provide crucial to support provide crucial support to americans. The question is how rapidly can that be delivered . Alix mike, you were talking about, it seems how the Small Businesses are at least a few weeks out. Michael we were talking earlier about states and cities. This will only impact their budgets even more because they have to pay the unemployment claims checks. It is worth pointing out, your last guest was talking about the fed will buy munis, this is not a class, these individual securities traded overthecounter. I think it is useful to point out the fed will not be the magic bullet for states and cities here. David that is absolutely right. All kinds of rules and laws are being rewritten as we go through this experience. Under the current set of legal authorities, the fed does not have the provision from congress to purchase municipal securities. What these governments are facing at the state and municipal level is not really today so much an issue of liquidity. They dont need a bridge loan. What they need is Financial Assistance from the federal government. Congress and the president need to be ready to step in and provide that assistance to shore up the finances of state and local governments, which have to run on balanced budgets. Borrowing capacity of the federal government is close to unlimited. Alix at what point, david, do you think they start to get pushback. There are reports that Mitch Mcconnell did not want to talk about the next stimulus package because he is worried about a budget deficit. We have had billions coming in in bills. When is the right, when is it the right time to have that conversation . David this is not the right time to have that conversation. Lowrest rates remain very and experience over history and around the globe shows governments who take forceful action using the tools of fiscal policy to sure up their economy come out in the end in much better financial shape. The longterm damage associated with sitting aside and doing too little is really devastating. Talking toyou are your sources, what are you hearing about that conversation . Michael that is the problem. There are two problems. No Congress Members are anxious to go back to washington. The political divisions within each party between those who worry about the debt growing so rapidly and those who want to do a lot more spending right now. I will tell you what the most important time to discuss this will be for Mitch Mcconnell, the governor of kentucky calls him up and says, fix this, because our state is going broke. They have balanced budgets and some of their fiscal years will like the united states, they will have to do something to fill that hole. The one thing you cant do is raise taxes, because people dont have jobs, they cant pay taxes. They will have to get some sort of help from the federal government. It might not be for a month, but you can see a phase coming up by the end of april. We might see talk of people starting to negotiate in advance. I saw this headline cross as the job neighbors came out chuck schumer, the Senate Minority leader was on msnbc as the number came out. He said, oh, god. Alix that is pretty much what i said, that was my interpretation. I appreciate the conversation. David wilcox and michael mckee. Initial jobless claims coming in at 6. 6 million. Someone said one in every 16 employed people have filed claims. Now in update on what is making headlines. Viviana hurtado is here with first word news. Viviana china is accusing the u. S. Of trying to shift the blame for its own coronavirus outbreak. There is a report the china concealed the extent of the problem. Bloomberg learned the Intelligence Community beijing underreported total cases and deaths. China calling that moral slander. Spain is reporting its worst day yet in the coronavirus pandemic. Fatalities in the last 24 hours, pushing the death toll past 10,000. Spain has more than 110,000 confirmed cases. The secondmost most severe outbreak in europe, after italy. Mitch mcconnell would move slowly on considering a stimulus bill. Mr. Mcconnell telling the Washington Post he would ignore the latest efforts by nancy pelosi to get talks going. He said he is concerned about how congress will pay for another wave of federal spending. 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 viviana hurtado. This is bloomberg. Alix thank you so much. I should point out that equities the s p up only 10 points. Coming up, the pressure on Small Businesses. We will break that down with derek webster. He is the cardflight ceo. Interact if you have the bloomberg terminal. This is bloomberg. Viviana this is bloomberg daybreak. Coming up later today on balance of power, u. S. Vice president mike pence. You are watching bloomberg daybreak. Viviana you are watching bloomberg daybreak. 113 billion in the First Quarter is a record loss and a decline of almost 15 equities, 21 bonds. Now to the federal trade commission. Regulators maker, want them to unwind a 12. 8 Million Investment in the company juul. The two companies are competitors that should not be in business together. It has written down the value by roughly two thirds. We end with Carnival Cruise lines pricing a share sale after cutting its size twice. Bloomberg has learned they will sell 500 million of shares at eight dollars each. Originally, carnival had hoped to shell cell 1. 2 billion in stock. I am viviana hurtado. Alix thank you so much. Just to recap. Jobless claims the last week coming in at 6. 6 million. The number is so big, it is almost unbelievable. Equity markets are still up. The session reduced about half of their gains. It also goes to show how much of the negative optimism in data might be priced into the market. The dollar is going nowhere and bonds are going nowhere. The headlines figure to show how disastrous this is for the u. S. Economy. It is time now for bottom line, where we look at sectors and Companies Worth watching. We are going to focus on shifting Consumer Behavior as the virus keeps everyone indoors. Six point 6 Million People filing jobless claims. Joining us is derek webster, cardflight founder and ceo. They filed a report analyzing hundreds of thousands of payment transactions. We will get to the data in a second. I want to get perspective from you. What are you doing with your labor force . We have been fully remote with our workforce for a few weeks with 80 of our employees based in new york city. We have done everything we can to help the Small Business owners that use our products. We are fortunate our business has not felt as much direct impact yet. We are doing everything we can to help our customers. Alix they are the ones that are really impacted with the jobless claim numbers. This report is focusing on nonessential businesses. What did you find . Derek we found businesses across the board, some of the hardest hit sectors were food and drink sales were down 37 since early march. A bunch of other things that are discretionary during a pandemic down 80 , Services Like health and beauty, even clothing and apparel sales were down 80 for independent retailers. Distinctionis a that some retailers can still sell online versus in stores. Some restaurants and bars still have takeout and delivery. You can get 50 off a bottle of wine if you tech it out. . Hat does that do to offset derek it stems the outgoing tide. We have seen a lot of restaurants moved to curbside takeout Delivery Business models and doing that very quickly. Cardflight is focused on that type of environment more than traditional fine dining environments. Jumpedks ago we saw a 3x in the number of food Business Services as they shift to takeout models. Sales are unfortunately still down. It is a way of mitigating the impact but not not replacing it entirely. Losers, bars and versus entertainment, you are not going to takeout entertainment. You can take out a bottle of wine but not entertainment. Can you give us more perspective on the categories you looked at, which ones are worse off . Derek some of the worse off once we already touched on include clothing and apparel, health and beauty spas, beauty and barbershops. We have seen organizations, weather it be religious organizations, charities, schools. The place that has been able to hold ground the best has been a category we call Onsite Technical Services plumbers, electricians, contractors, heating and repairs people. Those sales are down only 8 . 500we are seeing is the emergency Plumbing Repair jobs is more important than a 12 glass of wine. Alix do you have a sense of when we will have more normalization in the economy . How quickly the businesses will be able to start up and what that would look like . Derek it is still too early to tell. We have been recounting the data every week and it keeps getting worse and worse. If there is a bright spot, it is how fast these Small Business owners have been able to pivot their business models. I remain optimistic for Small Business owners everywhere, but as the economy reopens, they will be able to rebound quickly. Unfortunately, we are not seeing any areas of growth right now. Alix we will take some optimism. We will take some optimism where you can find it. Thank you very much. Derek webster joining us, the cardflight ceo. Found it critical for the stock market, coming up in technically speaking. This is bloomberg. Time for technically speaking. Bottom inoking at the oil. Michael today was a good sign of the market being sold out. You are always looking for inflection points. Crude oil down at 20. It started to kick back up. You can see the aftermath of that, up around 22. Going to 30 would mean nothing. That is the old glow from 2008 and 2016. Going down to 10 is a big deal. Looks Like Crude Oil is sold out for now. Alix gold and bitcoin, how are they faring and will they see action . Michael there will be action, but looking at a one year basis, gold is up almost 40 . Gold isis almost 40 , up almost 20 , the stock market is down 14 . Overall in a yearoveryear basis, with significant new information in the market, it looks like that will potentially continue versus the stock market being a little more wobbly. Alix no kidding. Thanks a lot. That wraps it up for me here at bloomberg daybreak americas. Coming up, chris harvey will be joining jonathan ferro. 6. 6 Million People filed for jobless claims in the u. S. A Staggering Number as the virus impacts. This is bloomberg. To help you stay informed of the latest news just say coronavirus into your xfinity voice remote to access Important Information and special reports from around the world. And to keep your kids learning at home, say education to discover learning collections for all ages from our partners at common sense media, curiosity stream, history vault, reading corner and many others. For more information on how you can stay connected, visit xfinity. Com prepare. Jonathan from new york city for our audience worldwide, good morning, this is the countdown to the open. 30 minutes away from the opening bell. After two brutal days for the s p 500, a two day selloff around 6 . We had a day of gains north of 2 on s p 500 futures. We are now up by. 3 . In the bond market, no big moves following yesterday, yield moves a followed by eight or nine basis points. The Dollar Strength returns with the euro very much on the back burner. The eurodollar negative for much of the morning. The focus this morning is on the Economic Data and what we have tried to do on this program the last several weeks is say again and again repeatedly, this is not just an economic statistic. There is a story of economic pain behind it. As we look at jobless claims, that number is no different. I want to bring