What it means is that crude is having a really tough day. You have Oil Producers from saudi arabia, others, really trying to renegotiate a deal to reduce the output, but crude is not getting a lift on that new. Getting a look at the Retail Stocks we were looking at, after the massive route that we had, the Smallest Companies in the s p 500 are retail. Taking a look at the midcap index, macys was removed on the s p 500. 13 other companies within the s p 500 ended last week with him lower market values and so you had Companies Like cap, kohls, nordstrom, capri, haynes, getting hit hard. So if they go, if they follow the precedent set by macys, they could potentially be getting kicked out of the s p 500. Just an incredible move. One of the Big Questions is it the fed would start lending to junkbond Companies Like macys. One thing that you noted a lot in your research is what is systemic, right . Who is providing the jobs and what classifies something as too big to fail, if you will. A lot of these retailers are providing a lot of these job, but junk bonds as we know are as been by the fed right now anything that will be bailed out anytime soon. Oil, quickly, the meeting moved. Does it give anyone a more or less hope . Down and we had that tweet from the president who said that he thought saudi arabia and russia, these other opec members might get together to cut output by 10 Million Barrels a day or so. We were starting to hear some confirmation of that on friday. We came in this morning to some other news from saudi arabia, russia, opec, they are racing to negotiate a deal together to stem output. Do also now make have the g20 taking center stage. They are trying to fuld in the u. S. And other energy producers. The big story continues to remain that there is a lot of room running out within the storage. Talking about negative prices, if you dont have anywhere historic, its not that easy. We can always rely on alix steel to Say Something like that when it comes to oil. Markets make it in courage men after some glimmers of hope on the virus but the economy is far from out of the woods. The Banking System isnt working quite as well as congress would have hoped. We have now some thoughts by , one of hisie dimon shorter once he has done at 23 pages. Hes the only current ceo skirting the crisis and sees distressing similarities. He says that at a minimum whats coming up will include a bad recession combined with Financial Stress similar to the financial crisis of 2008 and the bank cannot be immune to the effect of this kind of stress. What does that mean . He says that Jpmorgan Earnings will be down this year, though the bank is unlikely to cut dividends. He will give more details on the later thishe bank month. He says 180,000 of their employees, 70 , are working from home, the bank giving payments to those who must go into work. The bank is also waiving fees for some loans, allowing customers to defer payments and removing minimum payment requirements on credit cards. There are regulatory issues affecting their ability to lend and after the crisis, those should be reviewed company says. Not right now, he says there will be a time in lace for that, but not now. He says he is working closely with the government but that they will not work west regulatory relief. A detailedng for plan to get the country back to work once new cases start to fall that should be based around testing and ramping up slowly. The country was not adequately prepared for the pandemic he says that we can and should be more prepared for what comes , at and that done right disciplined transition would maximize the health of americans and minimize the suffering caused by the economic downturn. The letter came less than one week after he told staff that he returned to work after he had undergone that emergency heart surgery. What are financials doing, taylor . Has there been a reaction to jamie dimons letter . Taylor the call that you mentioned there is interesting. I believe it was last week where they came out and said that will really depend on dividends as a part of their income and that he believed in his world be a responsible for him to cut the dividend because of Retail Investors often collecting them as a source of income and he viewed that as taking away a source of income. You could see that on either side, as we know. I think the Financial Markets view the dividends as being a staple sign of the health of financials. A great day today, citigroup is up 8 . About jamie talking dimon, up 5. 7 today. Part of it comes on the yield curve that we are seeing, 10 and 30 yields rising on the long end. Always a bigger boost for the financials, but i think they are certainly seeing signs of stability here today within the financials there. Can read moreou strategist notes on how they are viewing these dividends, if it is seen as a sign of income for Retail Investors, assignor stability, more stable than they were 10 or 12 years ago or so. Yet at the same time do you cut the dividends and saved cash . That debate continues today. Mike seems like they will wait until after they threw a stress tests in june to make a decision. The fed, that is. Mark crumpton is going to get us caught up on first word news. Mark . Mark michael, thank you. [indiscernible] saudi arabia and russia are making progress over a deal for outputs. Hurdles remain for the opecplus coalition. In the meantime, the saudis and the russia want the United States to join in, but President Trump has shown little willingness to do so. A sign that lockdowns in europe may be easing the coronavirus outbreak. Germany and spain reported lower numbers of new cases and the death toll in spain over the past 24 hours was 637, the lowest since march 24. The japanese Prime Minister says that he will declare a state of emergency for total io and six other areas as soon as tomorrow but there will be no hard lockdowns. He says that his government will launch a 1 trillion stimulus package to fight the coronavirus pandemic. Their largest ever package, twice as much as expected. Global news, 24 hours per day on air and on quick ink by 2700berg, powered by analysts and journalists in over 120 countries. Im Mark Crumpton and this is bloomberg. Will beming up, we talking with Allison Schrager from the manhattan institute. This is balance of power, on bloomberg tv and radio. Mike this is balance of power , on Bloomberg Television and radio. Im michael mckee. We have a headline that should encourage people on wall street. Italy reporting the lowest new virus infections in almost three weeks. 3599 new cases of the disease on monday compared to 4316 one day earlier. New deaths linked to the virus, more than the day before. The doctors told us the deaths would follow the klein in a new infections. Markets have been up because there has been optimism about the virus starting under control. The nasdaq and the s p up by 5 as well. So, both with good news. We want to see what happens next, though. Theson trager joins us from manhattan institute, where she is a senior fellow. Thank you very much for joining us. A lot of talk now on wall street that we are maybe beginning to see the end, but what is it that we see when we see the end . The end of the virus or the end of economic, all this economic stress going on . Mike they seem to be connected. Allison they are definitely connected, for sure. Like you said, once we get the virus under control we can start reopening the economy. And we will be able to see how long the recovery takes. That is one of the big debates. When you look at forecasts people say we will have a vshaped recovery and others say that when you look back in history people come out of major scarring events like this cautious, they say. And then we dont know of course how quickly a lot of these companies are going to come back. What kind of letter would you assign to a potential recovery . I think its hard to know right now. Ushaped is looking more likely, but i have held out some hope that we will get a vshaped recovery. Numbers,h unemployment to a certain extent its by design. We have shut down the economy and we have told that we are going to get you money through the uninsurance program. A lot of those people are furloughed and they may be called back to work quickly. We cant put too much stock on these eyepopping numbers because they dont tell us about the state of employment in a month or two. Mike we dont have the numbers to tell us that that impact on the labor market, but what about other parts of the economy . The whole idea of shutting down all the schools around the country, state governments running out of money. Where do they come out if this ends by may sometime . Serious damage or something that we can recover from relatively oh, it couldson be very serious damage. Particularly for economies that have to balance their budgets. The last financial crisis and took them five years for the numbers of state employees to get to where the rest of the labor market was because they tend to lay off a lot of workers when they have extensive demands and are short of revenues. I think thats a big concern. To some degree the private sector is better poised to recover faster. If we get this kind of damage, i imagine its up to congress to fill in the gaps. Governors saying that we need help. For sure. I just saw janet yellen speak and she is pushing for more fiscal support. We are seeing the fed buying me bonds, not something i would have ever expected. That might mean relief for them as well. How do we think the u. S. Economy develops when you shut it down for so long . Thinking about the idea of trying to raise productivity, do we see that happen because we have now experimented so much with work at home and remote distance work . What happens with kids in school . Do we create a time, here . I dont know, i tend to think that we are really going to benefit in person work and we are seeing how much is lost when we work remotely. Changese we might see in productivity. World war ii shut down a lot of capacity and then we had huge gains in productivity afterwards. Maybe people working from home or coming up with new comic rid of ideas. Mike what kind of ideas would be useful to fund . , ishere is a phase for there an idea that we dont have that takes time . It will take time. We have no idea what the economy will look like when it reopens. Which businesses come back, which ones dont. Then we will have a better sense of whether Infrastructure Spending was useful. But i think we will definitely see more research into the pharmaceutical and health care. Mike when you look at the numbers and the curves we are trying to bend, i note is an on care i know is it unfair question, you have any sense of it . Expert on that, but i am a data economist, and i have been aware this whole time about it how incomplete the data has been. Keepone reason the curves changing. I think hopefully there is a the of optimism where european curves or new york curves look like they are bending and maybe we will be pleasantly surprised that it will last as long as we thought. Gods ears,ips to we hope so. Allison trager, thank you very much. Many companies around the world are seeing their business fall dramatically. The ceo of nestle told bloomberg today that they are struggling to keep up with demand. Trex is an unprecedented time and we have seen very Strong Demand for food and beverage products in the countries that have been hard hit. Priorities right now, and the first is the health and safety of our employees. If they stay healthy we can make a positive contribution here. Is this course, contribution is key. We are trying to maintain our food and beverage products. With the presence of one hundred and 87 countries, it is important to us that we also give a helping hand over and above the call of duty around the world where we are present. All that business continuity, do you have all of your raw Material Supplies guaranteed . The minute we saw the crisis spread, we were trying to improve inventory levels at all levels of manufacturing. Involuntary materials, work in process, finished goods. Flexibility is what is required by now. You do have logistics constraints. Even then it takes longer or the capacity is limited. Still, its really all about managing in a tight way this crisis and showing flexibility. This is what our teams are focused on right now. Coronavirus changing Consumer Behavior in the longterm . We are far out from that right now, we are shortterm focused at the moment. I think it is the most essential service that we can provide to our consumers. What we are seeing from china, whether is some improvement, that even in the aftermath of joint demand for value holiday products, there may be less on premium. Given that we are of course in a environment, its also safe as we emerged from the Immediate Health care crisis. In the short term based on the demand that you are seeing for various products, are you stockpiling any . Have you increased production on certain products like water or coffee . Generally we are trying to produce flat out in the face of Strong Demand, but with , we havens kicking in a lower employee presents as result of illness or precautionary measures and enhanced safety protocols that we need to run at the plants. We are not always able to give it 100 of the capacity that you would have in normal circumstances. Working extra shifts and ramping up manufacturing where we ran, but keep in mind this is a challenging moment and getting to normal levels of manufacturing would be an outstanding achievement. That was mark snyder, ceo of nestle, speaking exclusively to bloomberg. Andrew cuomo holding his daily briefing, saying that the number loweres in new york is for a second day in a row. Schoolss for you kids, and nonessential businesses remain closed until april 29. If you are a businessman you dont like that. If you are a kid at home, you probably do. Still ahead, homebuilders are surging today. Why . We look at the recent. This is power balance of power euro. Mike this is balance of power , im michael mckee, sitting in today for david westin. The stock of the hour is Heritage Homes and Home Builders in general, spiking higher eight confirmed results for lumber prices rising. Abigail doolittle is you the story. It seems odd that they are rising in this environment. Mark it does, but we have a rally on the date homebuilders, behind that to a long heart is Heritage Homes large part is Heritage Homes. Upgrading for the First Quarter, if you can believe that. Homebuilder break into luxury homes, relative to the First Quarter they are extremely strong. January and february were great with march, not as much the virus crisis and tragedy hitting and percent decline there. Overall up 23 for the First Quarter on this bullish preannouncement with order cancels at 13 backlog. This is a good driver for the homebuilding state. The news, the builders. Lus the market rally on the year, though, its a very different story. Up, with that 20 move Meritage Homes is still down and it is an equivalent amount for worst year since 2008, mike. Thank you very stocks soaring today, the dow is up for by almost 6 . That deathsmo says in the state seems to have leveled off. Next we will speak with jim greenwood, biotechnology ceo. Mike this is balance of power on Bloomberg Television and radio. Im mike mckee, in for david westin. For bloombergg first word news, we go to Mark Crumpton. Mark still, climate experts say it did little to ease global warming. Stillas because march was some 35 degrees warmer than average between 1981 and 2010. The latest figures are according to the European Unions earth observation agency. British Prime MinisterBoris Johnson is said to be in good spirits after spending the night in the hospital while being treated for the coronavirus. His illness deals a blow to the u. K. As the country prepares for the worse of the pandemic to hit. Almost 5000 people died from covid19 in the u. K. So far. Scientists say that peak is likely in the next week or 10 days. The number ofays covid19 cases in the activeduty force topped 1000 over the weekend. Among the military services, the navy has the most cases with 150 oncluding more than for the uss theodore roosevelt. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Michael social distancing is the first line of defense against the coronavirus, but ultimate victory will depend on treatment, a vaccine, and extensive testing. To try to keep things moving. Im wondering, when you look at what all the companies are doing, how you think it is going, are we making progress, of sunshinehe rays the president is talking about in your business . For having me on. One of the reasons we are making at bio, we have a membership of about 800 companies, from the smallest to the largest of the biopharmaceutical companies. As soon as this virus hit, i sent a note out to the company saying, who can help, who is involved in research . About 50 companies replied that they could, wanted to. A march 20 4, 25, we had virtual summit, about 500 people, along with government and academics, to plan how we can cooperate getting beyond the usual competitive nature of the who has dateday they can share with others, who has science they can share with others . Been accelerating the r d for the biotech industry. To your original question, which is what is going on, there is a lot going on. In terms of what we will see results, i would start with gilead with their product. Betweens lies somewhere life and not life, a tiny self replicating robots, if you will. What this does is it tricks the virus, when it tries to replicate itself, it picks up the wrong molecule in its environment and impedes its ability to replicate. That should slow the progress of the disease in patients. We will have results on that as early as this week. That could make a huge difference. Has a york, regeneron treatment for inflammation patients. We have learned when this virus gets into the lungs, the immune system tends to overreact and create inflammation in the lungs. They mayhoping that also have results soon on whether the antibody they had can reduce inflammation. A Little Company in san been forming all kinds of associations, collaborations with companies to develop antibodies of various kinds that can counteract the disease. Michael let me ask you this, this is all happening at such lightning speed. That does not happen in the drug industry usually. Has the government waived restrictions, making it easier for this to move . Jim the fda has been spectacular. All of our ceos and companies that have dealt with the fda have basically said they are going overboard to try to speed up the process. When Companies Report to us that they have problems in that regard, we get on the job and talk to the fda about that, try to facilitate better communications. I do want to get to the vexing part, which is what we are all waiting for, not just to be able to treat the symptoms but prevent individuals from getting the disease. Again, they have a mouse model that mimics the human immune system. Testing antibodies. Producing antibodies in the nice. They think these antibodies could be injected into people as a temporary vaccine. You may need an injection every month or two, and that would get us to what we really want in the long run, which is an active vaccine that could be injected into hundreds of millions of people to prevent the disease. That is probably between nine and 18 months away. Michael even when they come out and say this works, you have to make enough for everybody. How long will that take . Jim one of the things we are doing with our collaboration we are helping the Small Companies that may come up with the products, with a Large Company that may have the manufacturing capacity to scale up. Hat will be you are right scaling up will be critical. I know the Gates Foundation is doing a lot of work to try to develop manufacturing facilities that could prepare to manufacture all kinds of vaccines, even before we know which vaccine will work best. Hopefully and i think we will succeed in having the manufacturing capacity ready when we know these drugs demonstrate to be safe and effective. Michael one last question. Who is paying for all of this . Jim for the most part, the companies, as has always been the case. The politicians like to say that the nih makes drugs, they dont. The Companies Invest far more into r d than the government does. The government is certainly stepping up to the plate, but companies are saying whether we make money, losing, or breakeven, we have to save lives. The companies are investing literally hundreds of billions of dollars to come to the rescue here. Michael jim greenwood, thank you, ceo of the biotechnology innovation organization. Some hopeful news on the drug front. U. K. Prime minister Boris Johnson is hospitalized, admitted as a precautionary measure as his coronavirus symptoms continue. We will have a live report next. This is balance of power on Bloomberg Television and radio. Michael this is balance of power on Bloomberg Television and radio. Im michael mckee. British Prime MinisterBoris Johnson has been admitted to hospital because of complications from the coronavirus. The u. K. Shadow chancellor emily. Spoke earlier with bloomberg about what that means for the british government. Very importants at this time that we show different Political Parties can work together, that in particular, we make sure the right supports are in place for , and makingpressure sure that our services are delivering, particularly our health care system. It is critical we have a transparent and open approach. It is right that the opposition will raise questions and that we will have on the record where processes are not working. I think that is very important. We have continuously done that since the beginning of this crisis and i think we will continue to want to do that. There are Big Questions like testing, the ability to protect equipment, and we want to make sure those issues are dealt with, and be open about that will be critical. You point to the potential holes in the package we have seen from the u. K. Chancellor, unprecedented. Four emergency packages to tackle the coronavirus. That would have been previously unimaginable up from a conservative chancellor. To the packages go far enough, what would you do differently . I welcome the packages that have been put in, they were necessary. It was quite right that the Government Works with these businesses to put them into place. I would say in relation to the furlough scheme, it wouldve been good to have those discussions earlier, but at least we have one in place. There are big issues the government needs to look at now. First of all, we need to look at how employers can be strongly encouraged to take part in that furlough gain. We are seeing a number of them not decide to do that. Part of the reason was, a number of businesses are looking at their fixed costs, which are not covered this would cover salaries in arrears. Looking at the fixed costs, the wasial bank loans schemes not fit necessarily from that point of view. That has been changed. Hopefully, that will lead to most support, so that businesses will be looking to keep staff on and not shutting up shop. We need to see government engaged on that question. It is not good enough to announce the farlow scheme. We have to protect peoples jobs wherever possible. That was the u. K. Shadow chancellor anneliese dodds. For more, we welcome Therese Raphael of bloomberg opinion. There can be a gulf between what we hear from a government and what is actually happening. What do we think we know about Boris Johnsons condition and how long he might be, if not incapacitated, but away from number 10 . The government and the last few weeks has made an effort to address some of the criticism, that it had not been transparent about its policies, what it was basing decisions on. In recent days, we have seen some backsliding. We know that Boris Johnson has what downingys of street is persistent symptoms, dry cough, fever, temperature seems to be the most persistent one. Last night, an hour after the queen stopped speaking, we learned he was taken to the hospital. Now it appears he will spend another night in the hospital. Downing street is insisting these are routine checks, just a precaution. Boris johnson himself has tweeted. I think there will be some room given to the government has he works his way through this illness. However, if it last for any significant amount of time and on not sure what would be considered significant one day, two days, three days, questions will be asked about who is running the country, what sort of deputy process as been talk through. Right now we have the foreign over but he isg a controversial figure in the party, very much liked by buy song, less so by others. The cabinet itself has been divided over coronavirus strategy, with increasing questions about the inability of the government to wrap up ramp up testing to the levels it promised, as well as shortages in personal protective equipment for staff. So all of this is mounting. Famously does. K. Not have a constitution which raised questions during the brexit debate. Now there is a question where there is no designated successor. We have a Vice President in the United States. What happens if Boris Johnson could not continue for some time . Therese exactly. First among equals in the, serves at the pleasure of the queen, but also his cabinet. Backroomn we saw dealing among theresa mays cabinet is that there was some infighting. Isis johnsons cap that behind him, a colossus within the conservative party, so i dont think theres any risk of him losing that support. But if he were to be incapacitated, there would be an almighty scrum or who takes over. At the moment, we said it is dominic raab, but i dont believe anybody thinks that is a mediumterm solution to Boris Johnson not being able to make decisions and run the country. Then there is a broader question of how much work he is able to do from the hospital that bed. That leads to questions about transparency and how much the public is being let in on the state of the Prime Ministers health. Michael the most important questions for britains about this is how this affects the fight against coronavirus. Johnsons government was criticized for a slow reaction, now ramped up. Is it operating well now at the moment, do they need him . Therese we are not at the peak epidemic curve, that is expected in seven to 10 days. Consecutive days of declining death tolls, but it is hard to draw a conclusion from that. Where the government has fallen down at least two areas testing and making sure medical staff at the personal protective equipment. There is a third question. As the Economic Cost of the now in order of 2. 4 billion pounds a day the government is being pressed to disclose what its exit strategy is. At what point would be willing to release some segments of the economy without Boris Johnson bemunicating that, it will hard to see how the government will appear to be in charge and coherent in a strategy. Michael our thanks to Therese Raphael. Coming up, part of my interview with richmond fed president thomas parkin. Thomas parkin. This is balance of power on Bloomberg Television and radio. Michael this is balance of power on Bloomberg Television and radio. Im michael mckee. On friday, i talked with richmond fed president Thomas Barkin about his concerns for the economy. In response to that shocking jobs number, 701,000 he said it was a sad day. Here is part of the interview. Thomas it is a sad day. We have had job growth for well over a decade. It is hard to see the numbers turned negative. I think everyone expects very serious downward tilt on the jobs side. This is just the first indicator. If you look at initial unemployment claims last two weeks, the highest ever was 700,000 in 1982. Last week was 3. 3 million. This week was 6. 6 million. Unfortunately, the on implement numbers are going to get worse before they get better. Michael im getting some forecast in that show we will see anywhere from 10 million to 20 million jobs lost. Does that seem crazy to you, does the bank of which have any forecast at this point . Thomas this is so unprecedented, point forecasts are a silly thing to do. What i do try to do is look at the numbers to get some perspective on it. Bars in thisnd country employed about 12 million people. Physical retail extruding food and drug, another 11. Travel and entertainment, another five. Even in those three sectors, which have been hit unbelievably hard, you could get to 30 million quickly. I dont think numbers like or 20 million are out of the pale. Michael what are ceos, momandpop stores telling you , the conditions they see . Thomas i divide the companies into three buckets. There are service industries, like the ones i talked about. There is a lot of emotion there. In a lot of cases, really good, viable businesses have been shut down in the pursuit of a Public Health solution. Hey have hope in particular, a number of them are in the process of applying to this new Small Business loan program, but they dont know if they are going to get the money, how long this will last, whether the money will bridge them. Emotion. Sadness, then there are a bunch of essential industries. Hospitals, food processing, fire and safety, and the like. They are proud that they are essential, making this country operate, but they are nervous about their health. You do see increased absenteeism, supply chain issues in those places. They know they have to deliver but then they are nervous. Then there is the lights a lot of other businesses, construction, manufacturing. Many are down but they are still hopeful. In demandeeing drops are making their best effort to whether through it. They just have hope that there is light at the end of the tunnel. Michael this all adds new urgency to the effort to get loans, operating capital to companies. How fast will the fed be able to stand up the main Street Lending program, when can you start lending to people who need the money . Thomas we want to achieve the goals of this legislation, which is to put a lot of money behind supporting the economy and businesses in need. It will take time to work the details with treasury, who is our cosponsor on this. With the sbae program, a lot of the devil is in the details. It is complicated to get right, pick out the right segments so that you get money to the people who are truly in need, challenging to find the vehicles and instruments, and then how much risk you want to bear. Programwe are trying to get it s fast as we can. Michael im glad you brought up the risk question. People say the federal legislation says no buybacks, no big raises for ceos, but there are reports that the fed does not think that that applies to them, that if you put those big raises for ceos, but there are strictures s would not apply for loans, which would be worse, because they would have trouble keeping people on payrolls. How do you feel about that . I just say all of this is being worked with treasury. Give us some time to try to land the parameters of this. Michael part of my interview with richmond french president Thomas Barkin. The italians say the number of new cases there is the lowest in almost three weeks. New York Governor Andrew Cuomo saying it looks like the number of deaths and new cases in new york have begun to level out, and perhaps we are on the early side of a peak in new york, however, he says he is doubling fines for violating the space rules here. It is no time to give up. All of that good news supporting a good day on wall street. The dow, s p, and nasdaq are all up about 5 on the day. Balance of power continues on bloomberg radio. The second hour, david westin is back, and he is talking to the president of the American Petroleum institute. This is balance of power on Bloomberg Television and radio. York, it is 1 00 in new 6 00 in london, 1 00 in hong kong. Im vonnie quinn. Welcome to bloomberg markets. Stocks are searching today, bond yields bouncing as death tolls from the coronavirus shows signs of easing. The s p 500 gaining more than 5 . Prices fall, investors seeing signs of a glut. Saudi arabia, russia, and other opecplus nations racing to negotiate a deal to stem the price crash. Concerns about the coronavirus pandemic in the prison population. We will speak to a Johns Hopkins professor about the intersection of epidemiology and human rights. Lets get a quick check on the markets. Taylor riggs is digging into todays rally. The s p 500 is up 5. 75