Out with a pessimisticout with k on demand. Romaine what kind of economic drag that would have and the factories in the market, we are seeing a little bit of that priced into the market today, although we did see and we should point out some optimism and tech names, primarily secondtier tech names in the videogames space as well as telehealth companies. With us is Liz Ann Sonders of charles schwab. Lets talk about this earnings season. I guess depending on your perspective, you will either be the biggest thing in the world or biggest nonevent in the world. Im wondering, once we get this data from the companies, we start to get guidance and hear from ceos, what do you think we will be able to glean from this commentary and from these numbers about the future . I think the actual reports for q1 are somewhat of a nonevent given to out of the three months were pretty decent. Ae problem is given that large percentage of companies, certainly a record percentage have simply withdrawn guidance. That suggests they are not likely to be terribly more specific in their quarterly calls if they report First Quarter, because in many cases, they are not really armed with much more information than they were a few weeks ago at the point where many of them withdrew guidance. I think probably the takeaways might be more macro in nature and help guide topdown assumptions of whats going to happen in the economy. I also think whats going to be important is what company say about the programs that have been put into place. Who is taking loans from the with regardsams, to peril, what percentage have temporary layoffs versus permanent layoffs. We will get a bit more macro color then you will specificity on what analysts are going to do with two q numbers. Romaine some headlines crossing the wire. One thing we did mention was the bind in the treasury market. The yield starting to trickle down. The yield curve starting to flatten a little bit. Youre getting chinas february u. S. Treasury holdings. A four month high of 1. 09 trillion dollars. This is from february. This predates the covid19 crisis. Not necessarily the crisis in asia. Rising to a record 7. 2 trillion. At least officially because china has 1. 27 trillion worth of treasuries as of february. Lets stay on the bond angle. I want to ask you about the task of rebalancing your portfolio. We sell at the end of march following the lows of march 23 and investors started to rotate out of bonds and into stocks willing to take on some more risk. What does it look like right now . As it run its course . A lot of that rebalancing that occurred into quarter end was systematic and automatic. It was not a qualitative decision to go ahead and do that. Some of it was driven by the programs themselves. Washer that was reserved reversed enough you will see in the opposite direction. Our message around rebalancing around individual investors are not doing that in a systematic way is that a lot of investors will use calendar based parameters for rebalancing. They might do it on a quarterly basis or if there are a turnover or Tax Implications, a might do it on a less frequent basis. We have been saying if you have the ability to do it based on portfolio moods, basically let your portfolio tell you when it is time to do something a virtue of big moves in Asset Classes, that will afford you in opportunity to rebalance a bit more frequently. Taking advantage of those market moves so you are kept on the right side of the trade by adding into weakness and trimming into strength. That is what we have been telling investors to do again if we are not going to offset that by trouble with too much turnover and the Tax Implications if that is let the volatility work in your favor to drive when it is appropriate to do rebalancing. Romaine that is a good point. A lot of us put on a blindfold and hope for the best. We only have a little more time here. When you look at other Asset Classes outside of equities and i am curious what your thoughts are on the dollar and how that is going to factor in to some of the gains or losses we might see in equities based on what has been doing. Our view is that in the mediumterm, there is more likely to be downward pressure than upward pressure on the dollar given that we have launched unlimited qe. Right now down close to the zero level. Maybe not in perpetuity forever but for an extended time. There are other forces that have propped up the dollar. We have seen a wider range. More volatility. We would expect that to continue where you saw a recordbreaking volatility in the equity market, that was followed by the same in the treasury market. You are seeing it to some degree in the currency markets as well. When that volatility settles down, we think the path of least resistance is more down than it is up. Scarlet thank you so much for joining us and sharing your perspective. She is the chief investment strategist at charles schwab. What did you mess is up next where we will be lit taking a look at will be taking look at swedens approach to social distancing. This is bloomberg. Romaine broadcasting live from new york to our viewers worldwide, this is what did you mess. What did you miss. Scarlet lets give you a snapshot of how u. S. Stocks closed on the day. The s p 500 posting its biggest decline in two weeks backing off from a fiveweek high. 23 out of 24 groups the client appeared oil prices dipping below 20 a barrel. The backdrop for all of this is disappointing Economic Data and disappointing earnings as well. Is disappointing earnings. We are getting some breaking news here on gilead. Alead says all talks to buy stake in bio is crossing the wire now. We will get a little more detail as the information flows through. Scarlet lets keep an eye here to what is going on when it comes to coronavirus. As most of western europe remains in, there is one country doing a little doing things a little differently. Sweden is experimenting with what you would call more moderate social distancing. It could be used as a template for how other countries look to transition to their lockdown. Lets bring in jens nodvig. I think we should make clear that since the outbreak of coronavirus, you have been focusing on the evolution of coronavirus using your Data Tracking and modeling expertise to assess the impact of markets and economy. You are going beyond your expertise to look at what you can offer by way of data. When you look at the data on us. En, set the scene for what is sweden doing differently and what does the data show us about how successful it is . There have been some pictures circulating where we see people still going to restaurants. That is a clear picture of something that is very different from newark city for example where essentially nobody is going to Public Places at all. The other thing that is different is people do go to work. If you can work from home, you do. There are a lot of people who still go into the office. They even use public transport. A big difference compared to many other countries. It is not that sweden is not doing anything. They have deliberately gone down a more moderate route. It is important to see the template that has been followed in sweden if it can be a success. We are at a point in time where a light of countries have seen the peak in new cases. European countries genuinely had a peak in march. Everybody is thinking about, how can we reopen . Having specific countries we can use as a template is important. Romaine it is an interesting template. I am curious because when we look at some of those nations like sweden, we have to take into account much smaller populations and much more homogenous populations. When you use that as a template on a wider scale for a country like the u. S. With 300 plus Million People or a country like china with a billion people, how does that hold up . With the u. S. , it is very tricky to make nationwide conclusions. The country is made up of very different states. New york state has its dynamics from the has its dynamics the. Southern states have totally different the Southern States have totally different dynamics. Germany already announced they are going to do some form of reopening. Bell shops next week will open. Schools will be open in early may. That is following the template from sweden where schools have been open all along. Therefore, the European Countries will be the first ones to see if they can take some of the steps that sweden has been taking. It has not been without any problems in sweden. They have done certain things to make it sustainable. Something they can do for the longhaul. But it is have again impact in terms of the amount of cases they have. One thing we are tracking closely in our data is how many are in the icu. In ahas been going down lot of European Countries for two weeks, but it is still going up. It is a tricky balance to strike. Scarlet that is interesting. That was going to be my next question. The whole effort of social distancing is to mitigate how stressed the Hospital System will be, the facilities will be and to make sure they are not overwhelmed. The icu admissions might have gone up in sweden. Are they at a point where they might have they might have run out of icu beds . Can they still handle the load that is coming in . Think as some of the most important data to track this i think is some of the most important data to track. The amount of people admitted to the icu in sweden has grown a couple percent a day. It is still going up but at a relatively slow growth rate. It is different from other countries in europe where the amount of people in the hospital in the icu is going down. In terms of capacity, we believe there is probably about 25 Spare Capacity in the swedish system. Does not account military facilities. They are still on a path where they can handle it. It is important whether you grow a couple percent a day or jumpsr it jumps up a up to 10 . The next one to two weeks is going to be very crucial to figure out whether the swedish experiment is successful or whether they will have to recalibrate. If we can say in a couple weeks it was a success, other countries in europe will say, what sweden did, we can do too. There will be a template for a degree of opening we are going to be seeing. Romaine really appreciate you taking time to be with us. The safe. Be safe. Want to bring you data. These are for q comp sales. Down 6 . That is slightly better than what analysts were abetting. Make of that what you will. Adjusted etf, . 38. 13 inres up about afterhours trading. Stay tuned. We will be back with more. This is bloomberg. But we have seen actions by the g20 in coordination with the imf and world bank is unprecedented. The g20 alone have put together that obviously means they are able to import from and move the economy of other countries at the same time. Support package that has been approved today by the ministers and governments of the g20. Ensuring there are sufficient liquidity is available to emerging economies. In addition to the reboots that are available to the central banks. The packages they have already announced. We have been talking about this remarkable move by the g20 to support some economies around the world. Lets come back to some more specifics. The important part of this was to suspend payments. Is this a restructuring . Do you anticipate a longerterm restructuring of some of the debt of these countries . Course, if the idea is why are we well restructuring may for Bilateral Agreements to be put in place, we want to make sure we do not waste time. Swift0 has committed to a , strong and significant actions immediately. The suspension will give us time. Countries time to consider rescheduling relief by some of the debt throughout the next three to six months. That we think will be needed to ensure we close that chapter. A we have a question from bloomberg viewer i would like to ask you. I find it interesting. If you are asked is it possible this crisis might be an opportunity to consider further opening of the saudi Capital Markets . Is that possibly on the table . Absolutely. Saudi Capital Markets have been relaxed over the last three years. We received significant investment from investors. We will do whatever it takes to ensure the access to the saudi markets. Cannot talk to i the Saudi Arabian and esther without talking about oil. We had the opecplus, actually a global agreement to try to curtail production. You anticipate more will be need to be done . That is affecting the Global Economy almost as much is the coronavirus as much as the coronavirus. I think the significant agreement that has been reached also by participating by producing countries from outside opecplus. Worldsugh eyes the response it signifies the world is responsive. G20 energyat the ministers had an extraordinary meeting a couple days back welcomed that agreement and committed to ensuring market stability is key to face toid19, we will continue take whatever action is needed. World remember also the we are watching the most sectors that are imperative. Solutionsigning the that fit with the relevant sector. Just listeninge to the Saudi Arabian finance ministers speaking earlier on bloomberg tv. Sticking with oil prices, we are still seeing crude oil. That data, 19 Million Barrels last week. That is how much inventories went out. Hopefully, you can help make sense of this, catherine. We are looking at how market that is disjointed. That is beatendown. We heard from the directors saying we will one day look back on this not only as the worst aprils on record but one of the worst years on record for the oil market. Is there any talk that we are near a bottom for prices . Thanks for having me. That is a very crucial and interesting question. Out and end ofnd the worldtype scenario. They said never before has the oil industry come this close to testing logistics capacities to the limit. Point even difficult with this historic cut. Oil prices will not budge. In new yorkth wti settling below 23. There does not seem to be very much light at the end of the tunnel if the thought of coronavirus continues and oil demand is hit so hard. No amount of cuts are going to be able to combat this Unprecedented Demand destruction. This cut that opecplus did agree to, it is a story. It is a staggering it is staggering how big it is. It does not take effect until may 1. Then . Oes that mean until producers have free reign to pump all they want . Catherine more or less. We are at a time and a price range were a lot of natural declines are going to happen. In the u. S. , there is a there was a big meeting yesterday. A lot of producers were saying they are ready having to cut not not ablef they are to produce at these levels. You are going to see a little bit of production the kleins in some areas. We see it some declines in these areas. In terms of the global picture, from now until may 1, producers are going to continue in this path. Thank you so much. Bloomberg u. S. Energy reporter. Coming up, bank of america, city and goldman are reporting their First Quarter results. This is bloomberg. Scarlet we have more Bank Earnings today. Goldmans investment portfolio took a hit from the break of the coronavirus. Think of america and citigroup have followed their peers in setting aside billions of dollars to provision for bad loans. Lets go to our bloomberg wall street correspondent. The big banks gave a stark outlook for main street. Tell us what that outlook is and what it means for their earnings. America is among the most aware of the consumer and how Small Businesses are doing. They are looking at recession scenarios well into 2021. The idea of not knowing how long this will last and what kind of hits the consumer will hit is driving on the banks and their ability to know how much they will lose it comes to loanloss provisions. On the other hand, you see Goldman Sachs up on the day. There is a real preference when it comes to wall street businesses as trading volumes hold steady and underwriting hold steady and debt markets to come back when it comes to the big institutions. Romaine what are the expectations of lending Going Forward . Sonali like i was saying when it came to the provisions, we did see billions of dollars inked at all of the consumer banks. What does that mean when it comes down to how long this lasts . At the end of the year, if this lasts beyond the gdp we see at the end of the year, we see all of the banks doing their part to help customers through the down part, but the downturn, but if they keep seeing loanloss is rise, how long will they continue to lend as the question . Weigh theple start to effects of the coronavirus even after the shutdown. With that said, larger businesses seem to have more access to debt markets today. We are waiting to see that trickle into a much riskier part of the debt market. Scarlet i am glad you bring up the Capital Markets. It looks like the wall street okinesses are holding up ay. Is that enough to offset the weakness we can expect Going Forward or is that just a wash here . Sonali it is good news for Goldman Sachs and Morgan Stanley. They are much more tied to the consumer. The end of the day, they were up. We will hear from Morgan Stanley tomorrow. When i talk to my sources, the bankers are not bored. They are talking to clients about their liquidity needs. They are providing liquidity when it comes to the trading businesses. One of the executives talked to my colleague and showed this is a chance where they can show the value of their talent. The executives this morning were saying this is how they are able to step in. When it comes to financing on the underwriting side, they showed off the more creative financing like twitter and the one i keep pointing to is airbnb. They did not and the underwriters, but it was a creative financing that we will see more of. Romaine there is definitely a lot of opportunities for these banks. Did they talk at all about some cost control measures . Sonali they sure did. Here is the problem. When i say cost control, they are not cutting jobs right now. What they did not talk about is how they would be spending all of the capital elsewhere. We know they have to spend it for lending. Every other Conference Call you here, you talk about technology spend. We are in the middle of this major crisis. Those areas, we do not know what they are going to do. Goldman sachs this morning said, our longerterm targets are longer to mediumterm. We would still might we would still like to meet them. These are still unprecedented times the banks want to be they ares these are still unprecedented times. The technology did help them get through this tough time. What does this mean in terms of spending moving forward . They may have to keep a lid on those costs. Scarlet good points. Bloombergs wall street correspondent. She will be all over Morgan Stanley the result and they report before the market opens tomorrow. We are looking at bed, bath beyond shares. They are climbing into afterhours trade. They plunged 17 in regular trading in anticipation of the First Quarter results. The First Quarter or fiscal fourthquarter for bed, bath beyond showed that samestore sales fell 5. 6 versus the consensus estimate if you want to believe there is one of a drop of 6 . Digital comp sales rose 15 . That is a bright spot in bed, bath beyonds results. Clearly bed, bath beyond has items people would need to deal with this lockdown at home. Most people i think what up for the convenience or a lot of people based on personal experience would end up ordering of amazon because you get free delivery. Romaine lets remember bed, bath beyond was dealing with a lot of issues before this. This is a turnaround story. They did get mark trenton from target taking over as ceo. With was a lot of optimism his arrival. 236 revolver. They are suspending their plan for a and dividends and debt cuts. Something to keep in mind for those folks looking to buy the debt. Scarlet definitely conserving cash right now. Lets bring in mark crumpton. Mark the government knows Many Americans are eager to get the economic stimulus payments. They are trying to remove some of the guesswork surrounding it. The Internal Revenue service last a new webpage which allows people to find out when their check will arrive. The irs begin sending more than 80 million payments fire direct deposit this week to middle and low income households. It could take months for all of the payments to be distributed. The u. S. Military is bracing for a long fight against the coronavirus. The Defense Department is looking for ways to keep troops healthy while still protecting the nation. Officials have frozen most forces in place overseas. From the coronavirus. In the past 24 hours. It was down slightly from the day before. The u. K. Has more than 98,000 confirmed cases. More than 12,000 people have died. Euros are being closely watched as an indication of how much longer the lockdown will last. The government must decide by thursday whether to renew the threeweek lockdown and for how fromtrade in new report Irans Parliament is accusing the country of underreporting deaths from the coronavirus. Health officials in iran are not commenting on the report which says the death toll likely nearly double the officially reported figures. Those numbers put the death toll at more than 4700 out of more than 76,000 confirmed cases. That is the worst out break in the middle east by far. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Scarlet we bring a special coverage of all the price action and in locations on bloomberg television. Scarlet President Trump temporarily halted funding to the World Health Organization saying the organization relied too much on china and failed to share information. Samantha powers, the former u. S. Ambassador to the United Nations says the decision was illinformed. She spoke with our david westin earlier. It is an extremely illadvised move. It has far more to do with trumps domestic politics and his dipping poll ratings in terms of handling the crisis than it does the who and any desire to strengthen the Global Health response. Three quarters of u. S. Funding in terms of voluntary contributions goes to such tasks as fighting polio, measles, tuberculosis. What he is eating into is steady funding. The funding the United States has been giving for many years. The United States has made no major new announcements about how it is going to respond to the pandemic and how it is going to use the who and other avertational agencies to a humanitarian catastrophe in the developing world and a catastrophe that will blow back to the United States because of throughs through trade, Global Supply chains, through family ties and so forth to even remote parts of this earth. It is more of an act of spite and diversion. The who has not performed optimally. There was too much difference to china at the beginning. That also speaks to the absence of u. S. Leadership within the organization. The fact china has been able to leverage a modest contribution to the who speaks to the u. S. Retreat from organizations like that. The who needs to go back and look when a time is right and when it is not. Trying right now to prevent millions from dying at the risk of billions thing infected. Billions being infected. People cannot wash their hands at home and do not have clean water to do so. Right now the who is working on trying to ensure governments in the developing world who do not have the cushions we have and we have seen our challenges, managing our response but do not have stimulus packages or to trillion dollar bailout coming. Amenities,d refugees. The who is trying to offer chemical advice as to how those communities can withstand what is going to hit them. This is going to mean the who is scrambling to figure out how it fills the gap that trump is leaving but also how it mobilizes the new front that needs to ramp up those efforts. Ab you make an important point. We talked about being able to wash her hands. You wrote in the New York Times about this great disparity. As you say, a lot of people around the world cannot even wash their hands. To bech worse is it going in a lot of the lower Income Countries . It is going to be devastating on both axes. The lethality and the contagiousness of the epidemic itself because of overcrowding and close quarters in which people in poor communities often live. The ability to practice the kind of social distancing we are managing if we are lucky in some of our neighborhoods in the United States, that ability is not there. When one individual brings the buyers home, it is likely the virus home, is likely to infect whole neighborhoods or at least whole city blocks or slum blocks. If you think about refugee camps in idlib or seven turkey, if you think about the effigy camps in anglo dutch or the the refugee camps in bangladesh or the favelas in brazil, it is going to race through those communities. Romaine we were just listening to submit the power speaking earlier on bloomberg tv with david westin chain time now with david westin. Withnow for smart charts abigail doolittle. I understand you are looking at stocks today. Abigail that is our focus today. Before bringing in our expert of fidelity investment, i would like to set the stage by taking a look at a year today chart of the s p 500. There has been a tremendous amount of volatility. The first chart is a year today s p 500 chart. You see the big decline from the peak down 35 . This rally we are taking a look he a a looking a look at, very vigorous the beginning. You can see how it is been at a wage. Basically coiling. Buyers moree recently, less enthusiastic. From a technical perspective, this is called a bear wedge. If it does break down the full target would be this years low. It is close to the apex. The bulls might push it a little higher to the full target of right below 3100. The bigger message is the possibility and the likelihood of a retest of this years low somewhere right below 2200. To talk more about this, i would liardio bring in john gag of fidelity investments. Lets take a look at your children at your chart of the in 500 back in 1929 and 1987 which the client is more likely in terms of the retest. What can we learn from the path . John one thing to keep in mind is these bear markets do not unfold in an immediate in an immediate fashion. Analogues,ooking for theseback to 1929, 1987, sudden breakdowns that are mimicking what we are seeing. The first one, 1929, we had rallies. We lost 36 but then we got back 18 . Eventually, we went lower and other 27. There was more work to be done. We had a lower low. Fast forward to 1987. We lost 38 plus 15. Months later, we were 13. We had an equal low. The retest was ok. I think everybody would be ok with that. What we are looking at today in the s p, we are. In that rally mode just because we are in a rally, does not mean we are going to go back to old highs. I thought your wedge chart was a fantastic example. If we are looking at this from a Risk Management standpoint, if you are buying into the market today or another hundred points, everyone is waiting for dust to settle. Im hearing that from clients a lot. If youre waiting for the dust to settle in these higher highs, you might be catching a bear market rally. There is no right answer. Those clients might be right. The question is, how do we want to do this . There is nothing wrong with that. If youre looking in today and you are right in the market does go back to the old highs, anything could happen in the markets. You would have gotten a decent price. Right now, your risk reward does look tight. Maybe you go if we do a retest, do you think it is likely to be a lower low or an equal low . If you are looking at the three major markets, the qs, s p and dow, it is like a picture of the good, the bed and the ugly. Ba. S p is the di recommend for every investor, go to a fiveyear weekly and see what you see. That is what we have done on the nasdaq. Abigail lets take a look at your qqq chart. It is different than the s p 500. You make the case the dow is ugly. There is some hope with the qqq chart. I have 30 seconds for you talk about what you like. The pullback we saw just look like a pullback. If i said pick up with ekrona virus is, it would be hard to notice it is that farright selloff. It looks like an ordinary runofthemill selloff. That could change. If you put all three markets to the test, this is the strongest of the three. You start to investigate what is in the qs, it will start to explain why. There are a lot of companies that are immune to what is happening. Scarlet such as amazon abby go such as amazon, tesla and netflix. He would be going toward the nasdaq. Thank you for joining us for smart chart. Back to you. Scarlet good stuff. Thank you so much. Coming up, where bonds are coming. The u. S. May be looking to reboot 20 year bond with a patriotic spin. We will get joe weisenthals take on that next. This is bloomberg. Romaine welcome back to whatd you miss . Im romaine bostick. Joe weisenthal is back from his bike ride. What have you been keeping and i on . Couple weeks ago or maybe last week, who can keep track of the time anymore . We had larry kudlow talk about maybe war bonds would be a good financial instrument for funding and fighting this coronavirus crisis. We are not going to get that, but we are going to get long dated bonds. Good oldfashioned normal treasury. It does seem Steve Mnuchin is inclined to go out a little bit on the curve for some of the financing. It is not going to be the Retail Products people associate with war bonds in the past. Scarlet what is the distinction of a war bond . Julie no . Do we know . Joe during the war, they wanted to encourage people to save money. I did not want people to spend because they wanted manufacturing and production as much as possible to go to the war effort. They created this retail product. They said we are going to pay you this above market Interest Rate to encourage you to save. Everyone who knows our Current Situation knows that is the opposite of what we need right now. The problem is people are not spending at all. Even the people who have their jobs. It is a Retail Campaign encouraging people to tie up their money in government bonds. The treasury realizes that is not what they need right now in this economy. Less thancially 1 . You know what else has no Interest Rate . Gold coins. Silver coins. I hear the mint is running out of these things. Heard the real reason youre staying home is so you can protect your safe, right . Mend in upstate new york is halting production of precious metal a mint in upstate new york is hoping production of precious metal coins. This comes at a time when demand from retail buyers get their hands on precious metal coins is off the charts. Scarlet had no idea they were producing these coins in west point. Like everywhere else, where workers need to work in close quarters, there is an issue with social distancing. We have a lot of Economic Data today. What you what are you keeping your eye on for tomorrow when it comes to markets . Joe we are getting more data tomorrow. The data today was dismal. Not surprising. Initial claims report. It is slowing down but not that much. The bloomberg consent is forecast another five and a half million. These are huge numbers. Even with the cares act put in place, these are initial. It is on top of what we have seen so far. These numbers have to start coming down soon for obvious reasons. We will see how big it is. We have philly fed. All of it expected to be extremely dead. The most important things is what is happening with employment. Scarlet good stuff. Joe weisenthal is going to resume his bike ride around lady brooke lake. Im going to do a bike ride myself. Romaine, it is up to you to pick a place to go biking. That does it for what you miss. Bloomberg technology is up next. This is bloomberg. Welcome to bloomberg technology. Sheltering ing san francisco. Stocks fall as concerns for a global recession amount. The number of coronavirus cases around the world surging past 2 million. Andrew cuomo has advised residents of the state to where face mask. Governors continue to discuss plans for how and when to reopen the economy. We standing by