We were effectively at the lower bound already, so that is coming in at 25 basis points. The Canadian Dollar was already weaker before this. It is weaker now by 1. 5 versus the u. S. Dollar. Lets take a look at where we stand markets wise. We knew after the retail sales data we would like to down, and we are. Awn 2. 4 for the s p 500, and move for the 10 year yield is well back down to 66 basis points. Crude oil has recovered ever so slightly. We were at the 19 handle for most of the morning. 42. Vix is back up to what is happening in europe, guy . Btp spread is widening out. It seems every nation for themselves. It seems there will be no mutualization of debt. Every sector is a negative territory right now. The banks and the oil stocks are the worst performers. You got a pound on offer, the dollar generally bid today. The market is looking for a little bit of safety today. Vonnie arent we all . Lets get you our first guest. We are delighted to be joined by joseph stiglitz, Columbia University professor and Nobel Prize Winner in economics. Professor stiglitz, i want to ask you about the ideas that you have come out with in this book, and agenda for change, basically. Where do you start in a time of coronavirus with this agenda, given that it is those already most disadvantaged that are seeing the hammer fall on them at this time . The economy is completely set. Financial markets dont seem to be helping. Joseph hello . Vonnie professor stiglitz, good to have you join us. Happy to have you. I am curious as to how you would modify your agenda for change, or how you would begin to advise it be put into practice at a time of coronavirus, when we are seeing the most disadvantaged even more disadvantaged. Joseph precisely. I think what the coronavirus has weaknesses ineral our economic structure, weaknesses that i had talked about in my book, but i think theyve never been clearer. Examples are the ones you just mentioned, that the way our Economic System has been working has created enormous amounts of inequality. This is particularly true in the United States, where they are not only income and wealth inequalities, but very large inequalities in health. Afterasty virus goes particularly those who have weak health conditions. Those whorate among are lower income compared to higher income has just been enormous. This has not been an equal opportunity virus. It has really targeted the poor. The second thing this crisis has brought out so clearly is in a time of crisis, we turn to government. Developed a strong capacity in the public sector, then we are better able to respond. Unfortunately in the United States, for the last 40 years, weve undermined the state. It is remarkable in the last three years. Weve undermined the state capacity to respond particularly to crises. We underfunded the cdc, disbanded the White House Office , let the stockpiles of Necessary Health care ,acilities not be replenished we didnt maintain the ventilators in the stockpiles. You couldnt describe a worse behavior in terms of preparation by the government for this kind of crisis. Is thattheme in my book the kinds of reforms we need going forward, and this was written before the pandemic, is a better balance between the market and the state and civil society, all of which play an Important Role in how our society functions. Vonnie to that point, the measures already put in place by the fed and the treasury, do you see those as a good step forward . We just saw an airlines bailout that many people are taking advantage of. Ideaw that you floated the of a super chapter 11 type process during crises in the past. I am curious, would you want that also brought into this system, and would you even extend it to the most distressed systemic parts of the economy like retailers . Joseph first, i think you have to give them credit for responding strongly. 2 trillion is a lot of money no matter how you look at it. The efficiencies in the divine the deficiencies in the design of the program and the administrative capacities of the Trump Administration have really been exposed. The difference in the Unemployment Rate in the United States and in many European Countries like the u. K. , france, is enormous. Of course, that means that large numbers of very Vulnerable People are in the front of this crisis. We are second thing is having difficulty channeling money even to the business sectors and the productive sectors of the economy where its needed. That worries me, that when it when the pandemic is put under control, we dont know when that is going to be, u. S. Economy may not be as good positioned to have a strong recovery. When i am thinking about are things like this, households and firms will see significant erosion in their net worth. There will be lots of arrears in debt. People are now beginning to worry about a bankruptcy cascade. All of those are things we have seen in the past. We should have been worried about avoiding that in the worst crises, no matter what the shock is. If you dont do this, you can wind up in a kind of paralysis, and that is where my super chapter 11 comes in. That the ordinary procedures for , peopleng bankruptcy who cant make their liabilities , are too slow. They take years, and the case of lehman brothers. It took years and years. But in the east asia crisis, we firms not0 , 70 of being able to pay their debts. If you went through this on a one by one basis, it would be dealing with from now to kingdom come. So what you need to do is have an expedited process, a super chapter 11. That is what i advocated in the east asia crisis. , hopefullymay be not, and a situation where we have to revive that idea. If we had actually been able to channel the money to the companies that needed it, we would have avoided that, but im not sure we are able to do that. , amazon stock is up 23 so far this year. Do you think amazon should be paying its workers more, and do you think shareholders have fully factored in that that could be a possibility . Joseph i do think they should be paying their workers more. Sectorst of the service where there were not unions, they were not even providing protective gear. They are providing essential services to us come but they are left unprotected. In new york, the unions have been very strong in demanding that people in these areas get protective gear, masks, so that they dont come down with the disease. Thatthink what is clear is there is an asymmetry and Bargaining Power that goes back to the issue of inequality, and unfortunately, some of our Richest Companies have taken advantage of that asymmetry in Bargaining Power to mistreat. Heir workers it is unconscionable, given the profits they are making, that they dont treat their workers better. It is also the case that they ought to be paying more taxes. These companies who have been very clever in designing their products, coming up with their business models, have also been very clever in avoiding their share of taxes. Now is a time where we really do need that tax revenue for public purpose. Guy i am sure amazon would argue it treats its People Fairly and that it looks after them. Lets talk a little bit about what is happening in europe. We have a situation where it looks unlikely that there is going to be any debt mutualization within the euro zone. Spreadot a btpbund widening out significantly. Do you think the euro zone can survive without debt mutualization . Italy is going to be taking an awful lot on its shoulders. Beeph i think that this may a critical negative decision for the european project. There was already in italy a lot of skepticism about the european project. The euro had not worked well. Italy, it had been one of the reasons that their growth has been still anemic. Not the only, but clearly if they had more flux ability in the exchange rate, they couldve done a lot better. If there had been more flux , theyy in the rules couldve done a lot better. So in the absence of that, you say, well where is the solidarity . We are paying a high price for the european project, which was about solidarity, and now we have a crisis, and there is no evidence of solidarity. I think this may be a very dark moment for the future of europe. Guy guy on that note we will leave it. Thank you, as ever, for your time. We greatly appreciate it. Joseph thank you. To right now we are going cross to the conversation already in progress. Erik schatzker is speaking with Bridgewater Associates ray dalio. And the way of fiscal stimulus from the federal government and monetary stimulus from the Federal Reserve, are both of those organs of the u. S. Government doing what they should be doing . If they are not, what else should they be doing . Ray and my reaction, there is no choice. The 2000 eight financial crisis, you are faced with a choice. Do you want those banks to exist in the future, or do you want to get rid of those banks . They may not have had enough savings and they may have done things that they should bear the consequences of, but you want to save the banks. That isis a crisis similar, except it goes way beyond the banks. So when you start to think, who , you have too save think about do you provide them with income and how much you deal with their balance sheet. And if you dont come of consequences are enormous. Ofthe reaction needed to be the sort. We have to think about the consequences, though, of producing all that money and credit. Where does it come from and what does it mean . We will turn to that in a minute. That it is just like the great depression. You do that, and you will need to do more, and we will argue over what we should do and who gets what. That will be our big discussion. But yes, there has to be more money in credit. You have to operate in a way where you save important things and only impose a certain amount of suffering on people that they can bear. Otherwise you will have a revolution and you wont have productivity. Erik can we talk about some of those consequences . I think that is a critical part of that conversation. When you say the word consequences, are you thinking about economic consequences like inflation, for example . A product, perhaps, of all of the liquidity being generated by the government . Are you thinking about the impact it has on the treasury bond market . Are you thinking about the impact it has may be only foreignexchange market . Are you think about those things, or are you thinking more broadly . Tell me. Ray of course, it is my response ability to think about all those things, and that is my passion when i my passion since i was a kid. I am thinking about all of those things. You also have to bring in elements of wealth gaps and politics. Operated does not without consideration to how wealth is distributed. So i am thinking, for example, that when we look ahead, the world is going to be very different when we think about how you will pay for it. Reversal of the Corporate Tax cut, for example . The paradigm that we were in 2008 until it ended with the downturn was one in mechanistically, they included things which are probably not repeatable. When you get a Corporate Tax cut , the decline in Corporate Tax rates benefited stocks. When you had Interest Rates go down, the effect of lowering that Interest Rate caused all asset prices to rise because they all compete, so that causes a priceearnings expansion. But we wont have in the future Interest Rates go down in the same way. Expansion in profits and Wealth Assets prices going up for the purchase of those, and that benefited those with assets more than those without assets, and that created a wider wealth gap. You had low levels of Interest Rates because corporations to stocksand to buy back and to buy other corporations because the returns on equities were greater than the cost of funding. That supported prices. That created a certain cash flow. You are not going to have that. So as we come into the new paradigm, we have to realize , how is capitalism . How will it mechanically work . What does it mean for redistributions of wealth . All of those questions are part of the same series of questions you ask. When i think about foreignexchange, what i think about each of the markets, i have to look at it in that holistic way to figure that out, and then i think about that globally. You just cant think about it is one thing. The United States conditions are different from europes, different from china, and different from other countries. And those differences are important. So i have to think about all of that, yes. Sensecould you give us a so youve established some really valuable context, but i want to get a better sense of how you think it is going to play out. If things are not going to be the same, what is going to happen with inflation . After the financial crisis, we saw monetary limitation. We saw asset prices rise, as you pointed out. We saw a widening of the wealth gap, the rich getting richer. We did see the buybacks you talked about him of the amount of leverage built into the corporate economy. How will that be different . Are we going to have more inflation . Will asset prices rise the way they did before . Will the fed and its asset be able toogram manage Interest Rates and market yields the way at has been able to up until recently . Ray well, you gave me a bunch of questions there, so i will take them bit by bit. Lets start with the inflation component. Theres inflation in goods and services, and then there is the value of money and inflation in certain assets. I think the period we are going through right now is most analogous to the 1930 to 1945 period in many ways. In that period, what you had is deflationary pressures, much the. Ame as we have is the deployment of goods and Services Good enough so that it is tight, and so prices are high . That is one type of supplydemand inflation. Then there is monetary inflation. Had in the 1930s, when you deflation of goods and services, and you had inflation because of Financial Assets and other things because they produced it, you saw a series of currency declines. You saw one country after another devalue its currency in relationship to other countrie encies, and in relation to god, so there devaluations. Another time that seems similar period. The 19821990 the world had a lot of debt, and money was tight. And then what happened is there , and itbt crisis differentiated some countries from other countries. The emerging countries that owed a lot of debt and also didnt have the benefit of the money that was coming out of the was not having the same effect. At the same time, the United States was going through a reflation in which assets reflate it, but inflation rates fell globally. So it is important to distinguish what we mean by inflation. This is not a supplydemand kind of Global Supply and demand, we are going to be short its price and bit up inflation. We have to deal with the monetary inflation, and i think in the early stages of this, youre going to see it reflected in asset prices, think you will see it reflected to some extent in gold and to some extent in stocks and other things. Think willnto what i be beneficiaries of that. It will be a different kind of world. T will be difficult it will be a very selective world as to what will do well but Pay Attention to the value of money. Dont just look at goods and services. I think when we look at the economy the way we normally do, we just think it is a bunch of goods, services, stocks, bonds and so on. We may not Pay Attention to the value of money. I think we will be in an environment where that will be a very important issue. I am going to take this opportunity to ask the second polling question of our audience. Lets bring it up. Here it is. What court or will the u. S. Economy returned to positive growth . Will it be the Third Quarter of 2020, the Fourth Quarter of 2020, sometime in 2021, or later than anybody thinks . I am going to give the audience time to think about that for a moment and register their responses. Ray, i am going to take this opportunity is well to weave in a question from our live audience. I cant tell you where it is coming from, but it seems relevant given what you were just saying. See globalising to equity markets entered to what to a new the you can go back to dates of announced reflations. The whole economy follows. This is the important thing, even when you are asking the question of others. You have to understand the financial part of it, what it means from incomes and balance sheets. Im saying is i can give you the dates. It was the date when the federal 2008ve and the treasury in announced their program to produce enough money and credit to buy the end shall assets without entering the new paradigm. Erik im going to interrupt you for just a moment. I am interrupting you just to make one point that i think people are trying to wrestle with right now as they listen to your answers. You are absolutely right that the fed and the government, at least in this country, and elsewhere took action in 2008. Clearly, the federal government took action and the fed took action during that great depression. But theres often a lag between the moment they fire the bazooka and the moment we so to speak hit bottom. The bazooka has been fired a number of times we dont know howher we seen the bottom that . Thing about at andthink you are not Financial Market considerations. I learned this early in life. Kid, i would see the economy get stronger and stronger, and see the markets go down, down, down then i would see the economy get weaker, weaker, weaker, and see stone what up, up a the amount of money and credit is. And credit is. When it gets stronger and money becomes tighter and tighter, and Central Banks become tighter and tighter, that has an effect vonnie you are watching bloombergs conversation with ray dalio of Bridgewater Associates. You can continue to watch this interview on your bloomberg. Just use the function live < go. Wherehen we have to say, does the money and credit flow . Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] vonnie live from new york, im vonnie quinn along with guy johnson in london. You are watching bloomberg markets. We have more Economic Data coming out. I want to bring you oil inventories. Oil was below 20 a barrel early marketsning, before started trading, and then moved back above. Today we are looking for inventories to show a huge build, and indeed, we are getting an even bigger build than expected. 19 Million Barrels. More than that, even. 19. 2 5 Million Barrels for crude oil inventories, so a massive build as demand plummets. There is just too much supply out there. Refinery utilization was down 6. 5 as well. Gasoline inventories showed a build, not as big as anticipated, 49 Million Barrels. We are back below 20 a barrel 1. 25 . 19. 85, down it is time now for many moment for muni moment. The fed rolled out a plan to lend as much is 500 billion to municipalities. Taylor riggs has more. Taylor joining me to break out of this down is tom kozlik at Hilltop Securities, the head of municipal strategy and credit. On that note, has the Federal Reserve done enough here to stabilize the muni market, in your opinion . The liquidity facility the fed announced last week was really just a short term loan someity for states and local governments. Theres a limited amount, limited scope, and i think the result of last weeks announcement was really disappointment all around. The market was expecting more. The market was expecting the fed was going to announce they were going to buy in the primary and andndary market bonds longerterm securities. I think especially the smaller issuers were expecting more support. Taylor you take a look at some of the deficit financing that is inevitable to happen here as you are getting a drop in revenue. Expect a few years out for states to have to raise taxes to increase revenue and potentially cut expenses after they have to figure out ways to finance all of the debt thats currently underway . Tom i think for that, we can thing about the experience we saw just during and after the Great Recession about 10 years ago. Saw thatases, we cutting expenses, and some ways they were raising taxes, but they didnt raised by all that much. Right now we are still in the early innings of what it is that is likely to transpire. We just dont have a lot of clarity. Prioritiesfor policy is projecting nearterm, and isaac there is going to be more needed for state and local governments for more direct relief. Taylor of all of the sectors you analyze, which are most at risk for a potential default or some pressure here as you take a look at a slowdown of the economy . Tom i think its too early right now to be talking about the idea of defaults, but there are some sectors that have already been impact more so than others, just because over the last couple of weeks, the shelterinplace guidelines have made it so theres hardly any. Ctivity theres hardly any use of mass transportation. This discussions about what will happen in the health care sector, for state governments, for local governments, and for higher ed. In a lot of ways, the three things of how long the social distancing measures are going to last, with the magnitude is going to be, and the clinical phasewhat the potential of relief is going to look like from a federal government is a significant theme for me right now. Taylor my thank you is always to tom kozlik, Hilltop Securities head of municipal strategy and credit. Guy thanks very much. Tom mentioning in that conversation what is happening with the aviation sector. U. S. Airlines reaching a deal with the Treasury Department in washington to get around . 5 billion in aid around 25 billion in aid. We are going to talk next about what all this means ultimately for aircraft manned for aircraft demand. That conversation is next. This is bloomberg. Vonnie coming up later today, we will hear from cement the power, former ambassador to the United Nations from samantha power, former ambassador to the United Nations. That is in the 12 00 hour. Guy this is bloomberg markets. U. S. Airlines have secured a 25 billion government bailout as they struggle to survive the shutdown. However, key questions remain. How long will it take to get passengers back on planes, and if a few of them are willing to fly, what will demand for aircraft look like in the longterm . s bring in rosenberger lets bring in Roland Bergers senior partner for airline research. Youve got basically three scenarios that run from rebound to recession. Thatmpact on the oems produce aircraft are quite dramatic from one end of the spectrum to the other. Can you walk us through what will determine whether or not we get the more benign outcome, the rebound, or the really horrible outcome, the recession . Yes, hello. Thanks for having me on this call. Factors thaty two will matter and that we will have to check in the near future. Question to, the which level of air traffic we will come back after the crisis, will it be like before 100 , or considerably less . For example, behavior of passengers may have changed, like less business travel, for example. That is one key assumption. The other is really the question rather the growth rate, which we travel,n in passenger almost 5 per year, whether that will continue or not. Guy lets assume we end up with a scenario in which we do see significant decline in the number of aircraft demanded by the carriers. How are we going to find ourselves . What are we going to see in the sector in terms of the response to that . Tier 2 the big tier 1, suppliers going to adjust as a result of this reduced demand . Well, it really depends on the scenario. Will see approximately 30 new aircraft demand in aircraft than what originally was anticipated. Bit, this sounds quite a it is not that dramatic because in the anticipation, which was about 22,000 aircraft in the next 10 years, a lot of rate increases that would still have to happen have been factored in. We may be falling 15 , or maximum 20 . If we go to the extreme scenario, which is recession, then the fall is 50 , which would probably be around 40 or so, which is significant. Which means that an industry which has geared up to growth has to move to the downside. Vonnie what does that look like . This assistance is billions per airline. American getting 5. 8 billion, and so on. And yet, it still looks like it will only help them limp through the next few months. Of course, today we dont know what kind of aid will be given to which kind of airlines. Assumption is a safe that some of the money, especially if i look to the u. S. Or to europe, will also be tied to conditions. One of the positions could be that airlines are being asked retire all of their aircraft for the benefit of buying new aircraft. That would have two benefits. One, the aircraft industry could be kept alive, and there would ofadvances in terms protection. New aircraft are much more fuelefficient, so less carbon emitting than all of the other aircraft. Vonnie we do know some of the conditions for aid right now. Government will require the carriers to pay some at low interest, and the treasury also has the able to be to take stock to rebenefit on the upside. Do you see that happening across the globe, for European Airlines anothers . Is it a good solution . Is that enough of a repayment . Generally speaking, this industry is fairly ignoble. Whatever happens in one continent, i think the other continent would be looking at it. Still, it is a little too early to save exactly what is going to happen. I think first, Airlines Need to check out what their liquidity situation is eerie at need to be discussions with governments on that. Europe is more complex than the u. S. , with a lot more governments. Then things will fall in place. Guy just to get back to the aircraft production story, and ultimately what that is going to look like, thousands of jobs obviously on the line here. Just in terms of the reduced capacity that ultimately could be required as a result of fewer aircraft being demanded by the airlines as they hunkered down, when we look at how do visual nations are going to respond, how groups of nations are going to respond, europe versus the United States, boeing versus as the supply chain starts to adapt, do you have any jobs thatumber of could potentially be at risk . Manfred that is a good question. We havent made that calculation lets look at some basics. Whatever will happen, the world meets both airbus and boeing. I thick it is in everyones interest that those companies and the supply chain can continue. If you look at the supply chain, a lot of the supply chain is shared by airbus and boeing. Everybody is kind of in the same place, or in the same boat. Tighting jobs, it will be , of course, to the extent of the contracting of the industries. Of which can be offset by retirements due to age. The industry is in the stage anywhere it has to replace a lot of people in the next five to 10 years, just out of age reasons. Vonnie all right. We have to leave it there. Dykema go ahead. Guy carry out guy, ahead. Guy carry on. Vonnie thank you very much. We are in peak Bank Earnings season, with results in the u. S. All significantly boosting loan loss provisions, and keeping with yesterdays themes. We are joined by bloomberg wall street reporter sonali bass a. Have we seen the sonali basak. Have we seen the worst, or is there more to come . Sonali theres definitely more to come. Bank of america saying you could prepare for a recession well into 2021. It is unclear how goldman feels about this as well. They have said they are preparing for a little longer as well. They are making some more clarity around remarks on this year, but the reality is nobody really knows how long this pain will last for. If you are a big consumer business like bank of america, whose shares are down i was 6 realr today, it is a problem because unemployment will contribute to how much you will see out of consumer delinquencies and their ability to borrow. Originations are down as well. Guy do the banks have a problem at the moment, inasmuch as they are making so much money trading, and that, given what is happening in the wider economy, is not something they be something they maybe want to advertise . Sonali i dont think having an Investment Bank that is able to prop up the rest of the bank is such a bad thing right now, especially because it has been such a long time since they have seen the volatility. You want to see the big banks come in and make markets at this time, especially after the fed injected so much look into the market, so i dont think people will look poorly at the banks necessarily making money in their Investment Bank, especially because it is not like an upmarket, where if you do very well in trading, you get to cash out pretty big when it comes to bonuses. These banks are going to be keeping a lid on costs coming into the next year, so traders that were able to finally perform their best and 5, 6, 7, 8 years arent going to get paid the same way. Vonnie i thought it was interesting that solomon went to do some granular detail about some of the deals being underwritten. It is interesting that he would publicize that, right . Sonali truly interesting. ,nother deal i want to bring up twitter and wayfarer being the deals brought up. The ip market the ipo market has been revamped. Bankers are getting extra nearly creative and the types of financing they are doing. Twitter,lverlake with silverlake airbnb as well. Airbnb looking to apollo and other larger institutions to help find financing in private market. At somewhat expensive rates. Goldman is a big intermediary of these types of deals. Morgan stanley, which we hear from tomorrow, also a big intermediary. You see Investment Bankers really getting creative in this tough market. Vonnie great reporting. We will be speaking to you throughout the day. That is bloomberg wall street reporter sonali basak. Coming up, crude falling to its lowest since 2002. The iea outlook for demand is down, of course. We have more details next. This is bloomberg. Demand is falling down so badly that they could only limit the damage. We expect this year Global Oil Demand to decline 9 Million Barrels per day, and in the month of april, demand to collapse 29 Million Barrels per day. , even eisuke in here with efforts recently from opec and the g20, i. E. A director fatih birol not optimistic on the Global Demand front. Lets ring in Phil Streible of Blue Line Futures for more. We saw huge upside in inventories once again today, pushing oil to 19 plus a barrel. Where does this end . Phil the case for singledigit crude oil is building. Storage is rapidly filling up. Demand is at record lows. Factors are closed. [indiscernible] so singledigit crude oil already exists if you look at canadian, to bti midlands. Game changer is how demand will increase when the lockdown ends. The two things you have to look at is will we open up by region, like china . If we do, you will see a snapback pretty quickly. Sector, itned by is going to be a slow, steady ride for oil. Vonnie it is hard to imagine it 19ht now when you see the million build in inventories. Bel we are not going to able to work this out until the lockdown is done. Upe we open up, if we open country by country, you will see transportation pickup, demand from the airlines, people filling up their gas. I havent filled up a gas tank in two months now. But if we only open up by sector , if we open up just for construction, we still got the lockdown and shelterinplace, theres only that small uptick in demand. So hospitality and leisure and travel being at the far end of it, you will see most people in the United States still sheltered in place. If that occurs, we are not going to see that snapback. You need to look at other sectors. Vonnie thank you so much for your time today. Phil streible there of Blue Line Futures. It is time for our daily update on the coronavirus pandemic. Lets get to viviana hurtado. Ritika viviana total confirmed global cases topping the 2 million mark within the last hour. Leaders are trying to balance when to lift restrictions, but carefully, to contain the spread of the virus. In new york city, it baby it may be normal by september. Germany set to extend curbs even as cases fell. Spain reports a daily death toll decline. Showing upimpact is in measures of the economy. In the u. S. In march, Industrial Production dropping nearly 5. 5 . Retail sales plunging nearly 9 , all of this prompt it by shuttered businesses and staggering job losses over the last few weeks. Those biggest losses happening in apparel and restaurants. The impact of the virus always showing up in earnings. Goldman sachs investment portfolio taking a hit from the outbreak, contribute into lower profit. Bank of america and citi following jp morgan and wells fargo in setting aside billions for loan losses they expect viviana they expect. This building up in reserves as seen as a sign that banks are bracing for severe recession. You indeed. What have we got coming up next hour . We are speaking exclusively to margrethe vestager, European Commission executive Vice President , on the impact the virus is having on small businesses. We will also be talking to her about whether or not there is any degree of commonality between eurozone members. European equities are softer. The btp spread is widening out amongst the risk we are seeing in europe. 235 basis points between italy and germany today. The pound down by around 1 . The dollar is generally bid as the market becomes a little more nervous. Pressure,e under 27. 45. We will hear from the saudi finance minister a little later on in the next hour. Basically, european markets retracing some of the gains weve seen over the last few days, and we are continuing to monitor the situation when it comes to what is happening here in europe. It is going to be fascinating to get margrethe vestagers take on all of this. She is proposing that we could see European Countries may be taking stakes in companies that could potentially be vulnerable to takeover by chinese companies. I wonder whether she would hold the same view of takeovers by american companies, for instance, and the european union, or even british companies, for that matter. We will hear from the commissioner next. The european close is next, as well. This is bloomberg. Guy live from london, im guy johnson, with vonnie quinn in new york. We are counting you down to the european close here on bloomberg markets. We are in your session lows when it comes to equities. We find ourselves in a very different situation then we did yesterday. The stoxx 600 is down by around 3 . Bankinggas and the sector certainly under pressure. The best thing to take away from what you are seeing at the moment is the spread widening we are seeing across europe. The market is in a position is the getting to believe that it is every nation for itself, and that is not good news for peripheral debt. 234 basis points between italy and germany. Similar situation when it comes to greece, spain, and portugal. Brent down really quite sharply. It does seem as if the opec unwind has pretty much run its course. The pound under a little bit