Downing street. Lawrence the cat, move over. Francine just an hour ago, the Prime MinisterBoris Johnson announced the healthy arrival of a brandnew baby boy. Baby johnson was delivered safely this morning. We do not have a name or photo, but there is a lot of messages of joy from people across the world because Boris Johnson is or g20y leader of the g7 to catch coronavirus quite badly, needing almost four days in intensive care just two or three weeks ago. Tom i have been watching the glideh give us the path. Give us the update on milan. His the virus done in italy is the virus done in italy . Francine this is something variola just with virologys with the heads of state are trying to figure out. New zealand, they have only had 19 deaths. It is difficult to have a complete walk down. Lets say you flatten the curve. Keep people and lockdown forever. If you are in a region that is part of a bigger country, it is much more difficult to find the right balance of not hurting the number of people that could die, together with not putting the economy on its knees. Difficult and delicate. Tom exceptionally delicate day on a wednesday with terrific news flow. Brazil particularly challenged. With our first word news, here is viviana hurtado. Viviana Federal Reserve policy makers are all but certain to keep the benchmark rate near zero when they meet and will look late likely focus on the next steps once the pandemic ends. That is at 2 00 p. M. New york time. They will expand spending to municipalities. Current. K. , a sign restrictions are likely to continue until at least the second half of may. Country sees a track and test system to make sure people do not take off once the lockdown is lifting. The Contact Tracing app is about three weeks from being released. Milestones for the u. S. , the number of Coronavirus Infections topping 1 million and the number , 58,000, more than the number in the vietnam war. Of 2020, three months fixed income revenue was up 13 which helped offset lower income in the Corporate Bank and asset management. Deutsches announced declines for the year and credit will rise. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom thank you so much, greatly appreciated we know the great separation between the dm and the em. Definitive one more in em then Standard Chartered bank. Ofeaffirmation across many the pacific rim countries and across africa, has been extraordinary. Eric robertsen leads there research effort. What is your insight on the fragility of em . If you were having coffee with the managing member of the imf, what would you tell her . Eric that is quite an introduction. I think there has been a big improvement in risk sentiment, Risk Appetite and the Global Markets and that is for developed and emerging markets, and a big part of that has been the policy response from the likes of the fed and the ecb going beyond quantitative easing , we have seen a number of measures put in place that allow em Central Banks to repo their treasuries with the fed, that allows them to raise u. S. Dollars quickly. If i had to express the sentiment or view to somebody at the imf, one thing that concerns us is that you cannot support everyone. This is the theme we have been writing about, the haves and have not policy support knots. Policy nots. Quantitative easing does not replace lost earnings or cash flow, and a number of businesses will struggle to survive even some of the large benchmarks have seen themselves downgraded by the ratings agencies. My message to a major policymaker would be that we need to worry about the corporates in em. Tom i will ask you a question more kin to what i would ask stephen englander, the idea of chairman powell as central banker to the world, these modern derivative instruments, are they nothing more than a crutch that allows em to not clear their troubled markets . Probably ank that is bit too harsh of a statement. I would describe it differently. One of the things we see during periodic crises is financial and when that up happens, the banks have a difficult time accessing dollar liquidity and because of that difficulty, it is hard for the corporations to access liquidity. Provide annes incredibly important stopgap measure so i would not describe it as a crutch. It allows the Central Banks in each jurisdiction to provide and conduct the Monetary Policy they need to do, and that allows the liquidity to be disseminated or distributed to their local economies. It is a valuable policy response from the fed. Francine do you worry that theory what they are doing is enough but in practice the right amount of money is not getting to the hands of people who need it most . Eric that is such a great question. We dealt with that theme in the aftermath of the financial crisis as well. Quantitative easing and related measures, they do great things for the s p 500. They do great things for parts of the credit markets and financial asset in general, but as we all know, the percentage of the population that owns Financial Assets is relatively small. Whilepolicy responses, they are incredibly important, they do not put lost income back in the hands of companies and their employees. One thing we do worry about her the next six months is that while financial asset prices might start improve, it may be a laggard response in the performance lagged response in the performance and that would be a worry for policymakers everywhere. Francine in terms of policymakers everywhere, who is getting it more right and others . You have different economies at different stages. Is there anyone leading the charge in getting it right . Think an interesting way to answer that is, we used to say that things like quantitative easing, operation twist, and various forms of Central Bank Activity in their markets was restricted to the g7 or g10 Central Banks. I would highlight that a number of Central Banks can asia, for example the reserve bank of india, have been very creative in the way they are intervening to support the local bond market. Haven government bonds performed very well during this crisis, which is an important policy to highlight. That is offering support to the currency. I think we will see more Central Banks outside of the traditional g10 deploying some more creative policy measures. We should expect more of that. I think some markets will be more tolerant or more accepting of some of those creative measures and others will not, but india is a good example of where that has gone well. With eric come back robertsen of Standard Chartered bank it is fed day bank. It is fed day at 2 00 p. M. Normally it is me and scarlett with people around the desk. Today it is a remoteathon. Scott minor to join us. Minerd to join us. From minneapolis, Narayana Kocherlakota and diane swonk. This is bloomberg. Greatne we are having a conversation with Eric Robertsen of Standard Chartered on the economy. When you look at the forecast, not for the recession but the recovery, how patchy will it be and will it depend on social distancing measures being put in place for maybe even over a year . Eric the way we think about the recovery is that it is going to be extremely uneven. It will be extremely bumpy. The other point i would make is that we are going to see different sectors of the economy react differently depending on how quickly they can get people back to work. I think there are parts of the Technology Space that are going to come back very strongly, and if you look globally at the airline sector, for those countries that have large domestic markets and you see and ,asing of travel restrictions those domestic markets will perform better. Those parts of the Airline Industry that have almost exclusively i think it will be very uneven. Diverse see it in sectors within the equity markets. We have time for one more question, but it is really important. Give us a Standard Chartered update on brazil. What a cacophony of challenges. Eric it has been an extremely challenging time. Challenging time for brazil from an economic point of view, financial point of view, and even political. Some of the volatility over the last week has been exacerbated by Political Uncertainty they have been experiencing. The central bank has been very consistent and persistent offering liquidity into domestic markets and trying to slow the pace of depreciation for their currency. Tensions political over the last couple of days, the currency is looking better. Brazil has two things working against it, a large commodity export, and with the hit and demand in all commodity markets, that is a big problem. Brazil used to be a highyield but theghyielder markets do not offer quite the yield premium they use to and that is a headwind for them they used to and that is a headwind for them. Robertsen from Standard Chartered. We spoke at bloombergs surveillance with french hill of arkansas and that means meatpacking and the moving of protein around the country. Washington, d. C. , it is front and center with Kevin Cirilli. This is bloomberg. Kevin tom very quickly, General Electric just out a little bit early. Aviation,eck in ge that is a joke. It is not a joke at General Electric. Some of the headlines, general election electric accelerating multiyear he will derisk, d lever, etc. , etc. It is a horrible set of businesses for ge. Right now, we look at washington and the challenges forward in any number of stories, from the silliness of the Vice President with no mask on at the mayo clinic, that was unbelievable, and on and on. Greatal thing about the midwest where the president is possible is meatpacking. Kevin cirilli knows Philadelphia Food better than anyone i know. This is really serious about the protein of the nation. Standpoint a policy in terms of what is going on with agriculture, the president trying to send a message to his base that from a policy and political standpoint, he is with them. There has been concerns about shortages and the health and safety of it. The white house consulted with officials in the industry and i think it is smart to open debate about the readiness of it. Tom what is the congressional response to this . Is it just like the president in gottics or is it like it the attention of republicans and democrats alike . Kevin it is fascinating because over the past several weeks, we have not covered the republican versus democrat story, we have covered it as a regional story. Folks in that particular part of the country are with the president on both sides of the aisle, and they understand that because from a business perspective, the reality is the health situation, the Health Reality in different parts of the country are different than on the east coast southern corridor. The president met with Governor Desantis and many predicted florida would be like italy, but the Scientific Data does not point to that. I think he is previewing what you were going to hear in the final sprint to election day in florida, and michigan, which is while some want to keep economy closed, he wanted to reopen it. Yesterday i spoke to pat toomey from pennsylvania who was same to draw that same contrast with the democratic governor. Democrats want to adhere to the Scientific Community out of an abundance of caution and republicans want to reopen the economy whatever way they can, even if it is sectors at a time. Francine i know what captured our attention in europe is the unique relationship that americans have with their mea t. After mr. His play out trump ordered the meat plants to stay open when they say too many people are getting sick . Kevin in terms of the dynamic of unions versus republicans, that has played out even before somethingders that has played out for decades. Of this step the president took of labeling the critical, thats is the maneuver that he used that allows them to stay open. Tookis the tech step he will have to wait and see how it plays out. So much, thank you Kevin Cirilli from washington, d. C. We had news from General Electric, general Free Cash Flow from the industrial business is the most billion, metric, 2. 2 roughly in line with what ge expected. Covid19 is reducing its cash flow by about 1 billion. Tom some challenging headlines, to say the least, much more of those across Industrial America as well. It is fed day and a fed date of many dynamics. No one better speak to you then the choiceser, on that chairman powell has this afternoon. Stay with us. This is bloomberg. Lets get your first word news. Signing anp executive order compelling slaughterhouses to stay open. A number have shut down because of the coronavirus and the president says that frightens the food chain threatens the food chain. Activists want to protect workers from the disease. Facingtrump says states budget deficits because of the coronavirus will not get aid unless they take action against socalled sanctuary cities and says that would be part of any deal with house democrats. In germany, for the first time in three days the number of new coronavirus cases rising. There have been almost 160,000 infections and 6300 deaths, as the government considers steps to return the country to normal. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Tom thank you so much for keeping us uptodate with his huge news flow. Right now, the interview of the yourself, are asking how is american industry going to do it . In every slowdown, there is one way to do it in as we just learned from ge, this is the mother of all slowdowns. Ge organic Revenue Growth of 5 . Always followed 4 , how about a 6 and more to come . Brooke sutherlands expert. In every case it is about the reduction of capital expenditures. That is the easy way to cut. How much wiggle room does Industrial America have to cut . I was expecting deeper cuts across the board, but i have been relatively encouraged by the extent to which companies are holding onto spending. We heard from ups and caterpillar yesterday, both talking about how getting rid of projects that are not as discretionary and are more visible. They are continuing to spend money on that. That does give me some encouragement that investment is not completely drying up, and companies are still sending money. When you have a downturn it is layoffs, but we have not seen wide, sweeping layoffs in the industrial sector except for the aviation market. You see more furloughs. They are already very lean, but the nature of this downturn makes companies reticent to go for big, sweeping job cuts. Tom will they be reticent to merge or will we see that in the summer . Brooke you will see more deals on the aviation side. Technologiesd purchase Rockwell Collins and merge with raytheon. You had the heck sell woodward merger who cited the coronavirus as too much of a distraction, but on the others of this you will see consolidation in aviation because the economics is better when you combine suppliers. To have more negotiating power with boeing, i dont think they have a lot of negotiating power now, but it is in the supplier supplies to get more out. The sheer magnitude of jet retirements we are seeing, that is a concern for ge as well. Those are the most expensive lanes to do planes to do andtenance on an ge does ge does work on them. You may never see revenues get docked to the levels we saw in 2019 get back to the levels we saw in 2019. Francine how much more on cost can they save without laying off jobs . Particular, they have already cut pretty far to the bone. Ge thing interesting about as revenue per employee is relatively good due to some of its peers so there is the question of how much extra fat there is in the system that you can take off. Larry called has proven culp has proven a lot of this wrong. Their numbers would have been one billion ahead of their target if not for this pandemic, but i think he is going to have to pull out all the stops. For the industrial sector, they have been in costcutting mode because you had the u. S. China trade war. Sluggish andow and taking out a ton of costs and layoffs. The caterpillar ceo talked about this yesterday. They have kept headcount relatively flat even though they have gone up 40 , so they do not feel the need to do layoffs as they are already pretty lean. You are seeing that from a lot of companies. Tom coming up on francine coming up on bloomberg markets, we will ask about coffees take away and when he expects his coffee shops to reopen. This is bloomberg. Good morning, everyone, bloomberg surveillance. It is fed day and the chairman celebrating the winter of john bates winner of the john of institutional economics. Someone who celebrated was a gentleman from chicago, randy kroszner. Of the mathematical dynamics of chicago is extraordinary. A former governor of the Federal Reserve system, randy, we had never seen the junk conditions, exogenousjanice shocks to our mathematics as we are now. What is best for chairman powell to steal steer forward on stable trajectories . Randy it is a great challenge, given the junk nature of things now. Just look at the oil market, the incredible swing from money from day today and moment to moment, positive to negative. This makes it difficult to make sure everything is smooth and they cannot possibly make sure everything is smooth. They can give a framework to make sure things do not run out of control and they do not have a hook shot turn into a financial crisis, but the kind. F thing they tried to do tom the great debate we are having now, we just haadon steven major of hsbc who has calling fornt on higher interest rates. How do you assess the dynamics of disinflation in goods and other aspects through deflation, with a shift at some point to inflation . How do we do that . How do we shift from price decline to some form of new inflation . Randy there is a lot of downward pressure right now on Energy Markets and other markets. Demand is down significantly so prices are down. To key thing this can do make sure it does not get into an inflationary spiral as we saw in the early parts of the 1930s, is to make sure they functioningtain the of the Financial Markets and institutions, and provide enough liquidity and reserves so the downward pressure is mitigated and you can get back to closer to the goal of 2 , but that is a long way off. Professor, it is francine from london. How much more support will be u. S. Economy need once we are out of recession . Is it going to be a patchy recovery, a smooth recovery . How much support and which sectors where sectors will it needed . Randy i think it will be patchy. We see this from the way the markets react did, some of the tech firms that have been doing recently will reasonably well , but other traditional firms in transportation and hospitality will be the structure that affects this. We will not just go back on our merry way, so one of the key challenges is looking into the particular sectors and saying where the greatest need will be. There has been a response from the airlines and small businesses, but there will be transition, even with policy trying to get help. Tom how much Francine Francine how much focus does the Market Strategy need to put on the exit of the fed and how you can unwind it . Randy for sure. Been aave there has great deal of consternation when our Balance Sheet when up from less than one trillion to 4 trillion. People were worried this would lead to higher inflation. The fed has the tools to unwind s without having to inflation. Congress is giving money to the treasury and directing the treasury to work with the fed on various programs, so it might make it more difficult down the line for the fed to make the choices it wants. Choices are now for a political process. Tom i want to get away from your university mathematics. Hether thing i mentioned is can go easily away from mathematics to a holistic view. I am fascinated, and i asked this of Robert Shiller yesterday, what would gary becker say, the giant of social economics, the giant of chicago, the late gary becker . What would gary becker say about the price we pay to get this economy back running, versus the lit risk of further lives lost . Randy gary was always very concerned about Overall Health and welfare. Spent a number of years he is seemingly focused on this and he would be looking at a very watchful way at the tradeoff. When the economy goes down, there can also be problems for people with mental and physical health. In london, there has been discussion about how many people have not gone into the hospital for treatment, but treatment for heart attacks or others, there are Health Consequences that will occur. He assessed the consequences more broadly and he would want to say we want to make sure to ensure Economic Health which goes hand in hand with physical health and Mental Health and personal health. Randall kroszner, thank you. Coming up, we talk virologists and covid19. We talked to lauren sauer from Johns Hopkins emergency medicine. This is bloomberg. Francine this is bloomberg surveillance, tom and francine from london and new york. Thes get an update on pathogen called covid19 and what that means for the lock down measures, what we learned and what we still have to learn. , asing us as lauren sauer every day we have a full round up from one of the lead universities in the world dealing with covid19, Johns Hopkins university. Thank you for joining us. What should we focus on, the testing . Are the testings right, or do we need to figure out what medicines work against covid19 . Lauren it is probably a mix of both. People are probably tired of me harping on testing but it is the underpinning of everything we need to do. We still have a long way to go and we need to keep labor focus laser focus. We are seeing progress and vaccine progress, which will be a key to longterm fighting of this disease. A lot of ways to go. What do you find the most reassuring and the most concerning about testing . How much testing do we need in the u. S. , and are the tests reliable . Lauren the pointofcare diagnostics are Getting Better and picked up more broadly. We still have major issues with the supply chain around testing, so we still need the reagents to run the test and we still have issues with the swabs used to take these tests. Sorry, go ahead. Lauren we still need the reagents, the swabs, and have to focus on making sure we do not just have enough tests but they are in the right place. The key on getting back to work is making sure the tests are distributed so we can determine where new clusters may pop up. Tom your core competency is emergency medicine. We will have Emergency Rooms in october,y in may, someone stubbed their total or broke their arm, we are going to test all those people for the virus, arent we . Lauren that is the hope, so we themo that without putting and others at risk. People who dont show symptoms of covid19, when they come into the hospital, we would put them in separate parts of the hospital while we are dealing with covid19 and having it in the community. Tom i looked at this and the huge challenges. I am right on mount by mount sinai. Two we end up with Emergency Rooms, two hospitals . Lauren i hope that we arent. We cant distribute our commissions and resources like that. We hope this will become a disease we can manage with tools like we have for other diseases that make people really sick like flu, hiv, a bunch of different diseases where we can find people who have it early, safely care for them without , andng others that risks our resources allow for that without putting others at risk, and our resources allowing for that. Dead, the same amount as those killed in vietnam. Give us the scope and scale at Johns Hopkins university. Can we say you look forward to a may that will be improved from april . Lauren i do hope so. I think we are seeing a slowdown in our cases and starting to see a pressure release, but that is the time to be vigilant and not let our guard down. Cases asee spikes in people relax their social distancing practices, go back to work, and get tired of being at home and make different choices. Just because we are seeing a slowdown in cases does not mean this is over and we suddenly have a toolkit to fight this. We have to follow the social distancing and it does get hard. We have to remind each other it is still really important. Lauren, there are two things a lot of people will be worried about. We dont know if they have antibodies and if they do, if they can catch it again. We hear that this could be recurring every year like the flu, but more deadly. Lauren with the antibodies, people can get the disease and not show antibodies. We have a lot of tests that we are not sure how well they are detecting antibodies, so the key pieces are to improve those tests so we know when someone has recovered and is developing antibodies and do studies on how they develop this disease, and looking at a lot of cases. That is important in our vaccine work. Ofdont have strong evidence reinfection but we do not have a ton of evidence against it, so we have to make sure we are doing the studies of, are people just dutch are people getting reinfected or just shedding the virus longer than we thought . Francine lauren sauer. Thank you. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Alix pain for planes, trains and automobiles. Dropwagen expects a severe in earnings, and airbus burned through over a billion dollars in cash as demand crashes and wipes out sales. The ecb prepares for its Rate Decision tomorrow. Fed chair jay powell on deck today as the ecb and fed face questions about how to grow their economies. And bad loans versus good trading. European banks put aside more money for bad loans. Welcome to bloomberg daybreak this wednesday, april 29. The conversation yesterday was did we see a selloff in tech because of weaker Consumer Confidence numbers, and is this a change in leadership . Or was that just normal trading patterns . That is something we will break down today as we try to dissect the earnings coming out. It is a broadly weaker dollar story. No doubt