The s p climbing 2 or so, now up 2. 35 . This after the monster rally we had just yesterday. 2. 25 . Technically, pushing the s p out of a bear market, but that is a heated debate. The 10year yield continuing to rise by seven or eight basis points. Today, rising by an additional 10 basis points. You are getting a weakening of the u. S. Dollar. Beware talking about the funding issues, stress levels coming into the bloomberg dollar index. Some of the natural correlations are starting to return just a little bit. There is some hope and optimism here. Copper futures rising 2 . Futures are at the highest may have been since march 17. Are closing, helping to reduce the supply, and some hopes now that the demand outlook is improving as well. Here for a deeper dive into the markets is abigail doolittle. What are you watching . Abigail thank you so much, taylor. Certainly a risk on rally for a second day in a row. You mentioned the s p 500 up about 2. 7 . Energy is climbing higher, even though oil is not up nearly as much. Ledtransports, which have the big move down earlier this year, led to the downside. Airlines and other transportation stocks there. The highs, but up 3 . Some outperformance there. As you were mentioning there, investors and traders are feeling perhaps more encouraged around the Coronavirus Crisis and tragedy. Maybe some light at the end of the tunnel. Rally,e to the reflex you were talking about, are we looking at the end of the very market, new bull market . Most folks trying to stay away from those sharp 20 measurements, as you were implying, but we are up more than 20 from the recent bottom. However, it is the degree of the decline, the selling pattern, that some worry about, and some worry that this is just a bear market rebound. , supporting the idea that we have a strong risk on rally, whether temporary or the start of something bigger, take a look at commodities. Days, over the last five up by 3 , driven by oil. The best week ever, encouragement around the idea that production could be cut. Lumber up 9 . I know that you always have an eye on credit. If we look at a year to date chart of a bond etf versus the s p 500, they started to recover before the s p 500. It never felt as much of started to recover a couple days ahead of the s p 500. Very important to watch what is happening with credit. Some say there are cracks in credit which suggest the reflex rally we are seeing right now may not last. Taylor abigail doolittle, thank you for that analysis. Social distancing measures to combat the spread of the coronavirus is causing massive disruption to the economy. But Steve Schwarzman says there is an upside for firms with cash to deploy. He spoke with alix steel earlier. Right now, i think the biggest value is necessarily. Uying new companies it is, as they say, on the screens. Of displacement going on. There was, a week and a half ago, panic selling in the mortgage area. A lot of securities have dropped significantly in value. If you can figure out what somebody will repay the principal and interest, when there are some very significant investments that can be made. We are looking at all of those things. 150ackstone, we have billion on invested that we could put into the markets putvested that we could into the markets. We are looking at doing that in all of our businesses. You could be too early, but other areas you do not want to be too late. You have correctly identified where the action is today. I think some of those people will look back and say, that looked so easy. We think it could be easy in certain areas. Though, the meantime, you are still in real estate. Are you going to let off any of your renters during this time . We have heard some landlords doing that in brooklyn. Are you doing that for your tenants . Steve what we are doing with our tenants, if people can show us that they have been displaced or under financial duress as a result of the coronavirus, we will obviously make some kind of accommodation for that. The whole country will be disrupted the next few months and then we will get back to doing business. Estate, our business is quite in shape actually. That is because we have concentrated in warehouses, office buildings, as well as apartments. We avoided Development Almost in , whentirety, owning malls there were a lot of issues the we have atailers, very low percentage and hotels. Real estate, for us, remains an excellent asset class. Question to you. We were talking about the distressed areas you are looking to get to but not yet. Bonds . Out junk is the fed me to come in and buy junk bonds . Steve that is an interesting question. I actually leave that to the fed. Purchasedally have higher rated securities. Program at the fed, convincing them to go down from aaa to full investment grade, bbb, is a big stretch. Junk bonds are a little out of their normal range. I think they will look at that with some skepticism. Taylor that was Steve Schwarzman, the blackstone chairman and ceo. I want to bring you some other headlines, this time from new jersey. New jersey reporting it has also seen the biggest onedate increase in coronavirus deaths. That echoes comments from new York Governor Andrew Cuomo when he said new infections had dropped for the Third Straight day but the daily death toll climbed to a new high. New jersey coming out, matching that tone we have seen. New jersey reporting the biggest oneday increase in coronavirus deaths. Its get a check on bloomberg first word news. Mark crumpton has more. Mark President Trump is criticizing Global Health officials. On twitter today, he said the World Health Organization blew it on the coronavirus outbreak and was wrong to advise against travel restrictions he imposed on china. The president also called the International Body very china centric. British Prime MinisterBoris Johnson is still in intensive care, receiving auctions and to help him breathe. The Prime Minister is battling the coronavirus as his country reports the highest daily rise in death so far. 786 people died in the past 24 hours, bringing u. K. s total to more than 6100. Meantime, the government is falling short of its target to supply hospitals with ventilators. Government sign the has yet to bring the coronavirus outbreak under control. Thedeath toll rose by 743, most since saturday, and almost 5500 new infections in the last 24 hours, after declined yesterday. Novembersays election cannot be delayed because of the coronavirus pandemic. Speaking to the today show, he repeated his calls for states to plan for remote voting options, including expanding vote by mail. The former Vice President says he hopes people will be able to vote in person. 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. Taylor this is Bloomberg Markets. Stocks are relevant today despite some disconcerting data. On the money hand you have optimism among Small Businesses falling to a record. On the other hand, new York Governor Andrew Cuomo reporting the deadliest day for coronavirus cases. The rates for new infections at taper for a Third Straight day. Investors are seeing more positives than negatives in the headlines, but have as an economist view it all . Here to answer the question is steven blitz. Dissect some of the data we have been getting . The Economic Data feels really bad. The health data as well. Trying to find some positive news. How do you find yourself, as an economist, reading through these indicators, to figure out what is actually going on . Steven i dont think the current indicators tell you very much. We all know the economy is contracting, contracted at an incredible rate. Takes as a recession year to develop. It has occurred in a matter of two and a half weeks. So the real question is, looking forward, how do you get out of this, what does that look like, what is the upturn . Investors are optimistic by nature, otherwise, they would not be investors to begin with. They are looking at some of are not seeingnd through the fact that everything is not opening up quickly. The Unemployment Rate in the Third Quarter will still be very high, recessionary levels. That, the people are going to save more for precautionary balances. To see ane going acceleration of declines in capital spending. It will be down in the Second Quarter, down probably even more in the Third Quarter. Aat is why we are looking for negative Third Quarter. We dont think the low is in yet for the equity market. Taylor how long do you think these equity markets could go . That said the s p 500 below 2020 in 2020. Steven you always like to go for that stuff. 0 to 2000,king at 18000 based in our gdp forecast, inflation forecast, how that translates into earnings, and we 2000, sometime in the summer. It is hard to pinpoint a low, even harder to pinpoint the timing. Then the market will slowly revive. But when you look forward over the next 2, 3 years, people have not quite accepted that we have a recession. Regardless of the fact that the virus is what kicked it off, the old expansion is done, a new expansion will occur. Everyxpansion, like expansion that occurs in the united states, will be different than the one before. I think it will probably trade than structurally lower p e the one that we have had, and a lot of other differences that we could go into at another time. It will be different than what we had. The point is, expecting this to be like a blizzard, like we used to in new york, where you shop for a few days and everything gets back to normal and we very, is repoms, is a very bad idea. A taylor are you afraid that we could go into a japanlike inflationary scenario . Steven what it is telling you is the expectation is flat to negative returns on real capital. The only way out of that these isvernment spending government spending. The market is basically giving the federal government the wherewithal and the pricing. Nominal, youat have to believe over the next 30 years, the u. S. Economy nominally will grow more than 1. 3 . Suchconomics of it are that it is asking the government to spend money. Let me be clear what i mean by spending money. I do not mean tax cuts. Negative yields is telling you that people want, need to save more, people, businesses, households. Cut, you give them a tax they are just going to save it, they are not going to spend it. The real question and we will not answer this in the next three or four weeks is what you spend that money on. That is another big, broad subject that will take some time and figure out to do intelligently. But the government actually needs to purchase goods and services and replace the spending that households and businesses are not going to make, and that is what the negative real yields are telling you. In order to get a really good positive equity market over the years,ve to 10 government actually has to buy things. Taylor barely enough time but we always want more. ,ur thanks to steven blitz chief economist at ts lombard. Time for a quick check on the Bloomberg Business flash. N resorts is the latest company to test the highyield credit market. It is the first such sale since the junkbond market reopened a week ago. Wynn was one of the companies hardest hit on the coronavirus pandemic. Deutsche bank has downgraded general motors. The bank warned gm will run low on cash if production shutdowns continue for months. Deutsche bank says gm and ford have only about 15 to 17 weeks of liquidity to ride out current conditions. Itsn mobil is targeting bestknown sale as appointed cuts. It is slashing Worldwide Spending by 30 , to 23 billion, the second largest budget cut in exxons history. The company is confident the worst Oil Price Collapse in decades. Westargest cuts will hit texas and new mexico. That is a look at your business flash headlines. Preparedad, a company to survive stayathome orders. Of direct tohe ceo consumer pharmacy, capsule. That is next on bloomberg. Taylor this is Bloomberg Markets. Im taylor riggs. As stayathome orders spread across the country, director door delivery has become more and more appealing for essential and nonessential goods. Online startup cap tool is the e isst solution capsul the latest solution to waiting in pharmacies. Ceo, eric kinariwalla joins us on the phone. Talk about your business model. However you translating the increase of customers you are getting increases on the top and bottom line . Eric hi, taylor. Great to be here. We have seen over the last month, new york city has emerged as the coronavirus outbreak in america. We think it is so important for people to stay home right now. We built capsule five years ago absolutely for the ability for people to safely get their medications while at home. We are seeing a tremendous amount of demand from consumers, doctors, hospitals, and from local government, who are all looking for ways to keep all of the residents in our community safe. Have been folks reaching out to us is because we are the only pharmacy that serves all of new york city. We spent five years building the operational technology, infrastructure, to do that for free, seven days a week. What we have seen is, over the last couple of weeks, a 5x increase in new folks bring in prescriptions from other pharmacies, and we continue every day to build capacity in our pharmacy in midtown manhattan, to be able to continue serving the community abroad, helping us overcome this crisis. How sticky our customers, how many will stick with you after the crisis is over . Eric one of the things we have always focused on is that the experience at capsule is seamless and delightful. As people are, for the first time, exposed to a new and better way of getting and managing medications, that they will continue to use capsule for many years beyond. As a baseline, our business has incredibly high retention, agnostic of anything going on in the current moment. We are really excited that we have the opportunity to serve people right now. Even as we come through this crisis, people will have been exposed to a better, safer, faster way to manage their medications. Taylor besides the free delivery of some of your prescriptions, where else are you hoping to expand your business as telehealth and telemedicine have shown to be pretty enduring during this crisis . Eric we are making sure that we send people wherever they need to be served. Where we have been focused last five years has been around the key friction points, that almost everyone in america faces at some point. 75 percent of people go to the pharmacy at least once a month. That has not changed in 50 years. Where we have been laser focused his making sure people get and manage their medications on an ongoing basis. 50 more likely to get their medication when they come through capsule than other traditional pharmacies. We are focused on what is the consumers need, what is the friction with health care, and we built Elegant Solutions to deal with that. You are right, we think the inflection in digital help has been driven by the current environment is here to stay. Pharmacy is the broadest category of health care. It touches virtually everyone in america. We continue to look at other ways to serve consumers. Taylor our thanks to capsule ceo eric kinariwalla. Coming up, we will talk about the global ipo market. Live from bloomberg World Headquarters in new york, im shery ahn. Welcome to Bloomberg Markets. Stocks surging with major indices on track to log a second consecutive day of gains. The s p 500 of more than 20 from its march lows and breaking up from bear territory with the index climbing 10 this week. This amid signs the spread of the coronavirus maisie slowing. New york reported fewer hospitalizations for a Third Straight day. China saying it didnt have any new deaths or the First Time Since the pandemic emerged. New york and new jersey reporting the single deadliest days on record. Means for it all global trade and the outlook for developing economies. We will speak with the secretarygeneral of the United Nations conference on trade and development. First, lets get started with a quick check on the markets. U. S. Stocks gaining ground for a second session. The dollar retreating the most since late march. Also, 10 year yields and treasury yields gaining ground. 500, atcomes to the s p the start of a bull market, rising 20 from its recent low. Energies and material leading the gains. Oil gaining ground. Right now, reversing some of those gains, but we are seeing those signs that the worlds biggest producers are moving toward a deal. Of course, we are heading to that opec us meeting on thursday. Inbnb raising 1 billion debt and we securities from silver lake and fixedrate partners. The funding is an effort to shore up its finances, leaving its plan to Public Offering uncertain. This comes as the global ipo market is essentially frozen due to the coronavirus outbreak. Our next guest have been warning about trouble or months now. Slade smith, founding principal of renaissance capital. Smith, founding principal of renaissance capital. Great to have you with us. Tell us about the ipo market situation and what a reopening may look like. Kathleen thank you. Delighted to be here. We could see this coming. Some goodrkets had performance for investors all the way through mid february. Then the volatility and the index returns dropped once coronavirus hit and the possible economic consequences. But this is the time to be looking at ipos. Of ipo etf is a barometer what it will tell us about the opening of the ipo markets. When we see some sustained positive returns from that etf, which tracks an index of recently Public Companies, that is a signal that we will see some very good ipos, and they will be very attractively priced for investors. Etfe would look at the ipo sustaining recovery, and also the volatility measure. Drops below 30, this is the time that we will see some significant attractively valued companies tap the ipo market. Shery we have seen many tech unicorns struggling. One is working among new Public Companies . Kathleen i think that is a very good question about what is working. We are in a different environment now. The way to judge what is working and what could be coming up in the ipo market is to look at some of the holdings that had done very well in the ipo etfs. Biotech and health care has been very strong. Moderna is the holding. They and others are working on vaccines and viruses cover is. Recoveries. Biotecht to see more companies and biotech platforms and other Health Care Companies tapping the market coming up. Food and staples Consumer Group has been strong in our etf. Bjs wholesale, reynolds our recent ipos. We expect albertsons to be a company that comes into the market. As soon as it opens it could be in may and this could be a 2 billion ipo. Albertsons has a very strong business story at this time. Also, some of the unicorns, for they may besh a company with more interest from investors given how important delivery has been in the current environment. I would add, there is a private that does online education. They have a 2 billion valuation. Should be an attractive ipo coming early as the window opens. Shery i mentioned earlier airbnb raising 1 billion in funds. They were one of the Companies Looking at the flexibility of direct listings. What happens now that the market is so uncertain . Are direct listings even a possibility at this point . Kathleen we have been a skeptic of that approach, even before this crisis. Now, companies will take a more tried and true method of going public, which is through an underwritten ipo. The direct listings, the issue there is, they are meant to get the highest price and have the most insiders able to sell without a lockup. That does not work for investors. What will happen in this new ipo market, investors will clearly be in a drivers seat when it comes to how they will participate and at what price. I would think the direct listing to be off the table for a while. Shery how much does this have to do with different regions . We have seen First Quarter listings in europe slumping the most since 2009, and yet, in china, some local Companies Might be considering domestic listings. We heard from jd. Com, perhaps an ipo in hong kong. Of course, we have already seen alibaba do the same. Kathleen we see this recovery in the ipo market not just in , and wouldt globally expect to see hong kong become more active again, and london, as the investors become more comfortable with risktaking. We managed the Renaissance International ipo that has had very Strong Performance relative so the existing set of etfs representing that has done well. We are thinking the global ipo markets will open up in a similar fashion as the u. S. Ipo market. Shery kathleen smith, thank you for your time today. Lets check in on the first word news with mark crumpton. Mark the u. N. Labor organization estimates the equivalent of 195 million fulltime jobs could be lost in the Second Quarter alone from the coronavirus pandemic. That is a big increase from last month, when the International Labor organization predicted an extra 25 million job losses for all of 2020. The agency says full or partial lockdown measures now affect 2. 7 billion workers, or about 81 of the global workforce. In a rare move, Senate Majority leader Mitch Mcconnell today said he would try to quickly pass 250 billion in additional funds for Small Businesses to keep making payroll during the Coronavirus Crisis. The republican leader want to supplement the 350 billion approved for companies in the just passed 2. 2 billion rescue package. A vote is set for thursday. It will require unanimous agreement since it is planned for a pro forma session that would not typically involve senate business. Italy is considering easing its nationwide knockdown as new coronavirus cases and deaths continue to flatten out. Bloomberg has learned some companies could open by mid april. Denmark and austria were the first to European Countries to loosen restrictions as governments seek to slowly reviving economies crippled by containment measures without risking a second wave of infection. 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. Shery this is Bloomberg Markets. We have breaking news. France is reporting fewer virus cases but the deaths have risen sharply. 3777 new coronavirus cases have been confirmed. This is less than the previous day but when it comes to deaths, a sharp rise, as we have seen a similar trend in new york. Lag new infections, so deaths have risen sharply in new york, new jersey. The biggest number of deaths as well in the u. K. A new infections seem to be slowing down. This of course leading to crisis economics to be put into full swing. We are being served an alphabet soup of jargon from the world policymakers. Confused about what it means . Unchartedcy enters territory, centralbank action is getting even more technical. Oe ecb is locking its pepp, mulling the boe hasmt. Tsfme and ccff. ,he fomc is unleashing cpff mmlf. They can all get a little ott. Lets look at the Federal Reserve. It recently announced new f, anams, including the cfp initiative to buy shortterm debt directly from u. S. Companies. F, primary dealer credit facility, four purchasing a wide range of Credit Facilities from brokers, dealing directly with the fed. F. D the mml that authorizes the purpose of highquality assets from the fund to help relieve any funding blockages. Behind all the jargon are trillions of dollars being put to work. Global economy from the coronavirus outbreak. With speaking with the former governor, alix aboutspoke to dan tarullo the financial crisis of 2008. Will further their Balance Sheet further, probably substantially further. The issue is what kind of assets against is oned that they will not make just on their own. Remember, under their authorizing legislation, which was reemphasized by congress and the cares act, the fed is not supposed to take losses on the emergency lending it does. So the question of how far to extend is in part going to depend on the degree to which secretary mnuchin and the administration are willing to use those funds that congress appropriated to back various kinds of assets, some of which might entail substantially greater losses than things like investmentgrade port corporate paper. The question is, doesnt have an economic component, is it important for the fed to put a floor under Financial Markets in the economy . Secondly, to what degree does treasury want to allocate the funds it has two back assets where they to back assets where they could have losses whereas they could provide insurance money. Alix what do you think . If you were still in the fed, would you be advocating to take on more risk, if it were backstopped by treasuries . Alix, ithis crisis, dont think there is much question the fed can and should take more risk than it did in the great financial crisis. If youll recall, not a single fed facility actually had to dip into the treasury money, the tarp money that was used to backstopped it. While there was some problem from some loans, the income from others more than offset that. This time around, given the breadth and rapidity of the problem, particularly for things like main street facility, which is presumably going to come on board, they need to contemplate that there may be losses. But those losses are supposed to be backed by treasury. Yes, i think the fed should be prepared to set up a facility sot is not profitable onnet long as they are reassured by the equity by which treasury has put in. Have things like market servicers wanted to be backstopped by the fed, making payments, when people are not making their mortgage payments, or private equity taking the businesses they on over 500 people should get access to Small Business loans, it sounds like you would be open to all of that, as long as the treasury stepped in and gave the fed permission. Am i reading you write on that right on that . Fed will still have to prioritize, as does the treasury. 454 billion is not an unlimited amount of money, even as it gets leveraged. I dont think this is a question of saying, can the fed or should everybody. It is a matter of the fed, in consultation with treasury, deciding where the most important areas of the economy are. Alix, this all raises a larger question. Several of your guests have mentioned leveraged lending already this morning. 2013,ll recall, back in the banking agencies put in guidance that tried to limit the amount of leveraged lending, at least highly leveraged lending that was taking place. Of course there was a big push back against that. That guidance was removed a few years ago. To some degree, when we are now seeing is what happens when there is not guidance or regulation for the migration of risk to highly leveraged shortterm fundingdependent entities. That is something that that has to address now because it is a present problem. But we will also have to address it after the crisis. Shery that was former Federal Reserve governor. From new york, this is bloomberg. Shery this is Bloomberg Markets. One of the Biggest Hotel companies in the world has been forced to lay off more than 200,000 staff around the world. But the ceo says he plans to rehire everyone, as he is counting on a strong Balance Sheet to weather the storm. On thee to bloomberg phone from paris. Intend to rehire everyone of them. Lowering let go, for furlough, 100,000 employees out of 300,000. I was closed as the first of april. I dont know how long the crisis will last but there is light at the end of the tunnel. I dont know if we can come back as strong as before, but i can tell you for a fact today, we have 3000 hotels closed on the network of 5000. I intend to reopen every one of them. I intend to hire every employee. People will come back traveling and enjoying geographies, discovering people and territories this summer. I could be dead wrong. To i am fighting for accor survive, and for the Hotel Industry to come back. Great to speak to you this morning. On the question of the Hotel Industry and the travel industry coming back, you pointed to early summer. Of it more lot visibility from you in terms of bookings. What are you seeing on that front that is giving you hope, that you might see some sort of a comeback for the industry by early summer . The only sign of hope we have and it is tiny out of all the reservations we had, and today we are booked for july and august, less than 10 as of last night have been canceled. Are, and have to be as as i am, to have the crisis under control by then. I know that we will be getting about 35 occupancy as opposed to 70 , but i will make sure i will do everything i can to welcome anyone of you. That is basically the sign we have. But again, it changes every day. We wish you well with that aspiration. That is one of the strongest messages ive heard from any ceo on the network. Lets take china as a roadmap. Isna, as we understand, returning to some form of working life, normalcy. What can you tell me about the business in china perhaps as a roadmap for occupancy, bookings . We have 25,000 employees in china out of 400 hotels. Ago, 85 ofve weeks that workforce was at home. As of last night, the exact same number, those 20,000plus people are today back in the hotels. 90 of my hotels are open. In theg small occupancy 10 , 12 area depending on location. But business is coming back, including food and beverage. ,ne of our partner associations the secondlargest operator in , and, another 3000 hotels that they gave me a number last night. 90 of his hotels are back open, with close to 60 occupancy. Of course, in the very low budget segment, 98 of visitors are local chinese, but its a thatsign of an indication in a country that has been badly hit, five weeks after the epidemic being under control, activity is back in some spaces in the hotel sector. That you pointed to previously is your relatively strong Balance Sheet relative to peers. Thender, as we look past crisis that we are in right now, as we have been doing or a lot of this conversation, could your relatively strong Balance Sheet create any opportunities for consolidation post crisis . Thing first. Things to this, i can sleep at night. Day, 14 hours, trying to look after all of my employees, to make sure that they have medical assistance, if i can assist them with any financial distress. We have set aside about 25 of the dividend. But you are correct, having another 2. 2 billion euros of cash on our Balance Sheet permits me to weather the storm and to basically handle a long crisis. I hope it will be much shorter, but it makes a huge difference ability to face the wave and not be run over. Thanks to god we have this under our belt. Shery that was the ceo of accor. As we continue to see more cases across europe, we are hearing Prime MinisterBoris Johnsons condition is stable but in intensive care. Secretary mnuchin said he spoke schumeressional leaders and mcconnell about 250 billion of more aid to fight the coronavirus outbreak. This is bloomberg. Romaine it is 2 00 in new york, 7 00 p. M. In london. I am romaine bostick. Scarlet and im scarlet fu. This is Bloomberg Markets the close. Another day of gains. The question is whether we will continue to rally into the close like yesterday. Romaine interesting rally. We have put together backtoback days of gains. You out on to what we had last weekend you out on to what we on last weekend you add to what we had last weekend. The s p up 21 from the march low. It has been a broadbased rally today and yesterday. A lot of the beatendown names, midcap and slightly largecap discretionary names, getting strong bids up doubledigit percentages. On thear