Cimarusti later on, chef and owner of providence l. A. First, lets take a look at markets. We are down but all of our lows. The s p 500 off by half a percent. The nasdaq is actually up by half a percent. Airlines are the movers as Warren Buffett says he has sold out of all of the four airlines that he has stakese. Lets get a deeper dive into the market with taylor riggs. Track for itsp on Third Straight day of losses. At bank ofrates team america said typically you would not advise investors to follow that seasonality, but it fundamentals match, it could fade that risk rally. Big tech is that they got performer today, led in part by the three trillion dollar companies, microsoft, amazon, apple. Airline serving after Warren Buffett sold his stakes. On a forward pe basis, multiples look higher again. As the denominator of that ratio collapses, investors are rushing into bonds. You can see that inverted yield. You get a sense money is being put back to work in the equity and bond space. You mentioned Warren Buffett. If money is not going into the airlines, hard to believe it will not affect the airline suppliers. If you are bearish on the airlines, you could feel the same way about the aircraft suppliers. Those stocks are lower today as well. , theted to end on j. Crew first major retailer to file for bankruptcy and be a victim of this pandemic. They are in talks with lenders debtnvert 1. 6 billion of into equity. But they will hold onto madewel l, which will remain a part of j. Crew. Vonnie the Texas Railroad commissioner believes the limit output in the Lone Star State will fail and commissioners will not potentially even vote on it tomorrow. This, as demand has dropped drastically in the industry. We spoke with the commissioner earlier. At this point, it looks like the market is bottoming out. Texas producers are shutting in. We have probably missed our opportunity to lead on this. At this point, we are not going to prorate tomorrow. Are you going to support this tomorrow . I know the commissioner, i read his oped in the houston chronicle, and he was firmly against this idea that this process should be managed. Are you going to side with him . I dont even think we are going to take a vote tomorrow. We will see how the other two commissioners want to move. The political process has slowed us down. We have not evaluated waste, done calculations about how proration could positively affect economics. Its been purely a political discussion. We are still not ready to act. It is too late. There is no proposal to make. Preparation is now dead. How much industry pressure was there on occidental, others to agree it should be left to Market Forces . Pioneer was not in agreement, in fact, splinter off from the industry group. How much did the large players impact the reworking of your position . My position has not changed. If you go back in time, six weeks ago, we should have been taking action, we should have been proactive. You would have seen much less industry distraction in the United States. At this point, the major players, the political organizations really slowed process down so much we missed our opportunity. It was not that my position changed, we just got to a point where we could no longer make a difference. Vonnie so it has changed, effectively. If that is the case, if it is too late to do the right thing of course it never is how do you anticipate how this will work out . What do you say to states like oklahoma, and other states . But it may take action, will probably not have a major market move. You say it is never too late to do the right thing. It is interesting in this case, the right thing in weeks ago it is not the same thing as the right thing today. If someone said we have a plan to prorate proactively to respond to current market conditions, i would support it. Since we cannot put that together because of the Political Forces around austin, there is no way to practically take action. I think in another year or two when demand comes back to 90, 90 5 Million Barrels a day, the country with the most loss of Oil Production will absolutely be the united dates. We will have been the big loser. The United States. Forward, think, going given the lesson that will have been learned, if the math works out the way that you say it is likely to, do you think texas, the United States needs to get better organized in managing its output . I dont think its about oil output specifically but how to support our key industries, our most vital infrastructure in the middle of a crisis like this pandemic. The oil industry has been very successful in the United States for the last 50 years. The government, from a management perspective nonregulatory perspective has been fairly laissezfaire. In the middle of this complete meltdown of our global economy, forcannot take zero support the oil business, otherwise, we will lose out. I think there needs to be much more thought given to how we use data and understand impacts to markets, to protect such a vital piece of our economy. I think there needs to be much more thoughtvonnie that was par interview with the Texas Railroad commissioner. Lets get a check on the first word news with Mark Crumpton. Raisedresident trump has the count of americans he expects to die from the coronavirus. Foxnews aent told number could be as high as 100,000. At the beginning of april, the president said he hoped the desolate total 60,000. The desolate total 60,000. The president accused china of trying to cover up the coronaVirus Outbreak. He promised the u. S. Government would come up with a conclusive report on the origins. Onsaid imposing tariffs chinese imports would be the ultimate punishment. The Associated Press reports china covered up the extent of the outbreak so it could stock up on medical supplies. Sixwe coronavirus locked on the supposed to end today but instead has been extended by another two weeks. Some work will be allowed to resume in parts of the country, though, the number of cases amongst the countries population has not fallen. Officials say they have slowed the contagion, buying india time to prepare. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. As state start lifting their lockdown orders, restaurants are among the first businesses to allow reopening. Restrictions like cutting the number of seating in half for servers with masks. It will create a new normal across the country. Eur michaelrant cimarusti, owner of providence, joins us now. Talk about when you anticipate reopening providence, assuming that you will. Michael well, we are definitely going to reopen. The question of when is sort of up in the air. Although our governor in california, gavin newsom, has ease, us a bit of a t saying an announcement of restrictions could be announced this week. What that date will be, but we know news is coming this week. Vonnie how are you preparing for reopening . We are looking at pictures in texas that showed some restaurants reopening but when distance between our seats, booths closed. Do you have a plan for the reopening of confidence . Providence. . Michael businesses thrive when at capacity. It seems in this new normal, we will not be able to fill our restaurants at capacity. That causes us to look at our budgets, reforecast our sales. Those are the types of calculations we are making right now. Vonnie what will employment look like, given that you will have fewer covers every night, and given that Raw Materials may not be easy to come by, could be more expensive. The supply chain is messed up at the moment. Do you imagine it will be a smaller restaurant at the end of the day . Michael i think it will. Mandated capacity will be much lower than our actual capacity, so we will have to adjust for that. Of supply chain, i dont anticipate too many problems. Especially at providence, we deal with ingredients that are out there, these are not commodity ingredients in high demand in the first place. We deal with a lot of boutique farmers, partition all fishermen, craftspeople. The ingredients that we need will be ready for us once begun open again. Vonnie there has been a lot of program,ith the ppp independent, small restaurants trying to access it. Do you have any updates on how it is proceeding, how your colleagues have been managing . There has definitely been an issue with that. I have friends that run the gamut in terms of size of the restaurant that have been able to get ppp loans. With the program, the loan origination date begins the date you are funded. You have eight weeks from that moment to spend that money come in order for it to be forgiven. The problem is, if you live in a city or state where you are forced to be closed, what good is the money . Certainly, it is good that you can keep your employees on the payroll, but there is a possibility that for many they will not be able to reopen their doors before that eight weeks of cash runs out. Then you are back to square one. Vonnie how viable will it be as an industry if youre looking at increased cost for protection for employees, rent may be the same, each individual restaurant can organize a deal with his or her landlord, what does the future of the industry look like, what are you most concerned about . Michael everything that you just mentioned. I believe the future is not as bright as it had been at one point. Especially here in los angeles, we were in the middle of a restaurant boom. Many places, including our own, had some of the best years we had had recently. Clearly, that forecast is changed greatly, and not for the better. It will definitely be a difficult road back. Providence has been in business nearly 15 years, we survived the economic collapse of 2008. Clearly, the situation is more dire, but i think we have the skill set and the support out to bringng angelenos the restaurant back. There are all sorts of restaurants out there that are in the same boat as we are. I feel like angelenos, especially i can stick to that because this is where i live. Everyone i have spoken to is itching to get back out there once it is safe to do so. I feel there will be support for the industry. Vonnie i think that goes across the country. I was reading earlier, people spend 50 of their food budget out. That would make it seem that people would want to replace that have it going forward. Only so much that you can eat at home. From able to eat meals chefs like yourself is a treat. Of course, that being said, will prices go up . That remains to be seen. For commodity products, there will be a strain on the supply. Those prices will probably go up. In terms of the ingredients we use, im not quite sure. Farms wethese boutique deal with, they have product that they really cannot sell at the moment. It is actually in surplus. Restaurants are sort of their lifeline for success. We are a key part of their supply chain, we are their end market. When we are able to reopen, we will find that some of our prices will remain as they were, some will probably rise. Vonnie take us inside the thought process. Extraordinarily difficult to decide when to reopen, who to call back in terms of employees, who wants to come back, particularly when you , that within the administration, suggesting that the number of deaths could double by early june. How do you decide this is the date, and we are going to reopen . All, we havet of to wait for guidance from our governor. When that announcement is made, myself and my partners, we will sit down and assess, decide if we feel not only the climate in terms of our ability to keep our employees and our guests safe, but also, is the role that we , a opening up into restaurant that can only be seated at 50 capacity, isnt worth opening up, or should we wait longer until it is more safe and restrictions are lifted . ,onnie awardwinning chef Michael Cimarusti of providence. Thank you for joining us. With President Trump pushing to reopen the United States, wayne the competing interests of the economy and public health. We will speak to dr. Amesh adalja from the John Hopkins Bloomberg school of public health. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. We just go to Michael Cimarusti about the business side of opening up the u. S. , he is caught up in this tugofwar between economics and science. To the science side of the conversation now, lets welcome dr. Amesh adalja. His work is focused on emerging Infectious Diseases and pandemic preparedness as well as bio security. Im sure you saw the report out a little while ago, internal documents from the administration suggest there could be a doubling of deaths in early june. Can you react to that report and whether it seems possible . We decreasehat as social distancing, we will get more deaths. That is a simple fact. Vaccine, without a highly effective treatment, debts will continue. The question has always been, will the hospitalization rate, the people needing hospital level care, one that exceed capacity . That is the issue we have been struggling with. Flattening the car was about preserving hospital capacity. These debts were going to occur, and they will occur at a faster rate once we get back to normal economic activity. This should not be a shock to people, but the way it is presented to the general public has been bad from the beginning of this pandemic. Vonnie that is a terrifying thought. It suggests that at least we have the beds, so if you get sick, there is a potential bed. Should stay to reopen then, doctor . Dr. Adalja states need to look at what is happening on locally. Do they have the capacity to care for these people, do they tracing,nostic testing, and then they can start to remove social distancing. It is not an all or none proposition. Mass gatherings will not be safe to have. But the fact is, we will have to come up with a way to deal with this number of cases and deaths until we get a vaccine. That is why it is so important to focus on vaccines and antivirals. The virus does not change its behavior, it will still act the same as we open up. States have to be careful about what they do. There are some places where it will be more difficult to get back to regular activity. But we should not paper over the fact that we will be getting deaths from these cases that will occur. That is what this virus will do. This is a societal discussion we have to have over what is the right talents to strike here, because this virus will continue to act the way that it does. Getting worde just in texas, eight hundred 84 fatalities in the last 24 hours. The cases have risen 2. 5 to 32,332. Individual businesses are taking measures in texas, making sure there is social distancing in place for the most part, although im sure some feel they dont have to. Are we guaranteeing that fatalities will rise because of states reopening . Given what you said, it seems that is a fact. Dr. Adalja i do think it is a fact, something we have to accept it will happen. With texas, for example, i would not necessarily look at the depths right now and say this is an example of the reopening. , so there is a danger in trying to attribute the cases right after the opening. Really, that is what happened two weeks ago. But i do think that as people interact, they will get the virus, and viral people will be infected, and some of them will die. You have to balance what goes on in the economy. Keeping the economy completely locked down will lead to other asts, as well as deaths well. Cancer screenings are going down, vaccinations are going down, chemotherapies are being delayed. There is this tradeoff we have to deal with. The beginning of this pandemic was managed so poorly in the United States, we are now in this situation we are in. Vonnie thank you so much, dr. Amesh adalja, johns Hopkins Bloomberg school of public health. Mark im Mark Crumpton with bloomberg first word news. After weeks of unprecedented restrictions, most governments in europe are now taking steps to reopen their economies. The worst hit countries on the continent, italy and spain, removed some curves today as the Virus Outbreak showed continued signs of receding. More than 4 Million People were cleared to return to work in italy. Spain, which recorded a second day of deaths under 200, allowed people out to exercise for the first time in seven weeks is weekend. New York Governor Andrew Cuomo reported 220 six more fatalities in the state from coronavirus, the lowest onedate figures since march 28, down more than 70 since early april. But Governor Cuomo cautioned, the decline from the mountain is not as steep as the incline. He says he will consider opening up in regions where there are fewer than five deaths a day. He didnt say whether new york city would be held to the same standard. Congress will focus on negotiations for more stimulus funds this week. Democrats are pushing for more than a trillion dollars in additional spending, adding to the 3 trillion allocated to pandemic relief. It comes amid objections from republicans and demand from President Trump. To state and local governments. Lawmakers are using opposition to that proposal. Benjamin netanyahu is facing a litmus test. Israels top court is considering challenges to his bid to secure a Coalition Government with benny gantz. The opposition government argues a unity government which yield netanyahu in a corruption trial. Netanyahu was indicted in november on bribery and fraud charges. If the court finds against him, it will likely trigger a snap election, the fourth since 2018. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Amanda live from toronto, im amanda lang. Shery im shery ahn in new york. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. U. S. Stocks down but off session lows as President Trump threatens more tariffs on china in retaliation over the coronavirus. 500 on track for a third day of losses, marking its longest losing streak in two months. Cases of the coronavirus top 3. 5 million. Trump says some states are not going fast enough to reopen, but admitting the nations death count will likely be higher than he predicted. Marc benioff says the u. S. Government could create incentives for companies to rehire employees. Our conversation with the ceo of salesforce still ahead. Amanda we are watching the markets today. It is a bit of a messy session. We have weakness across the board although we are seeing more strength, if you can call it that, in tech stocks. On the s p 500, the Energy Subgroup is showing leadership today. We have seen lately, moving in the opposite direction of the price of oil. Tech is basically flat today. Industrials and financials, two big weak spots for the market. If anything, the markets look more normal today, if i can put it that way, less massive momentum trading across all subgroups. They areem that choosing today to sell, tyson foods, down 8 on the session. Ist as the Company Forecasting higher costs, lower output, and some shortages. Jonathan feeney is with consumer edge research. What tyson hadgh to say. They are caught in a bit of a circuit that perfect storm. Although you may expect part of their businesses to go up, they are dealing with other issues like plant outages. What were some of the most serious things going on for Tysons Corner . Jonathan two things were tied for first place. A perfect storm is a good way to describe it. The food service declines from the near total shutdown of restaurants more than offset the 20 plus increase in our data had shown for retail take away. Investors came in inking retailer would repel their volumes strongly, food service more than offset that. Second, the supply chain cost related to covid19 more than offset what was supposed to be a very profitable time, as the u. S. And western hemisphere feeds to pleaded markets depleted by the african swine fever. Into thisndustry came hoping for great numbers. We knew covid19 was a risk. Things did not turn out the way we hoped. Shery a target is 72 a share but you still kept her overweight rating on the stock. Why . Jonathan that second factor i mentioned. These are cyclical companies. You mentioned energy earlier in the broadcast. There is a cyclical aspect to the provisions of meat and food. Right now, we have every reason to believe the world is short supply of meat. Tyson is struggling to keep up with the world needs right now, but as they figure out how to adjust their supply chain to respond to this crisis, you will see the same kind of profitability we had been expecting three weeks, three months ago, significantly more than today. I dont want to get too focused on the near term, i think this is a onetime interruption. While there will be some additional costs, there will be additional cost for everyone, and that will be reflected in the price of meat. We have a good outlook on tyson. Amanda we do have this order to reopen that is causing some conflict issues for processing plants, especially where worker safety is concerned. How is tyson managing through that . Jonathan it is a great question. Among Food Manufacturing industries and i have been in hundreds of facilities in my life there is nothing i have seen that is more laborintensive than meat processing. A bunch of people are close together. It is a challenge to get people working safely in this crisis. How they deal with that is the same that everyone else is, they will have to test everyone at the door, give people the protective equipment, not only on the job but off the job, and they have to find ways to create more space. In the longerterm, it will lead to more automation. In the shortterm, they have to do the best they can. If that means reduce capacity, i would argue that means higher prices across the board. This is not just a u. S. Phenomenon. This will be going on globally in the meat industry. Shery when are we expecting tysons share price to recover them . N . Jonathan it is hard to say when. We should get a gradual rolling of restaurant reopenings. Grains havecosts, been relatively friendly. Between those factors, you should get a little bit better demand in margin. Those that are ready to serve restaurants and institutions get more volume over the course of the year. A little bit more friendly cost. Six months,three to i expect the share price to do better. Shery jonathan feeney, thank you so much. Coming up, Tesla Ceo Elon musk selling his bel air property after a twitter storm where he vowed to get rid of his possessions. We will get into that next. This is bloomberg. Shery this is bloomberg markets. Im shery ahn in new york. Tesla ceo elon musk took to twitter last week and vowed to get rid of most of his possessions. He followed up by listing two of his california homes for sale. Combined 39. 5 million for the properties. Joining us to discuss the recent our teslas dana hull, reporter. This is not exactly a sellers market. Do we have any idea why elon musk is doing this . Dana elon musk stance to get more than 700 million in dock options based on his compensation package that teslas board approved, so there is some speculation, in the middle of a pandemic, getting this big options award, the optics of that is not great. He is trying to make the point that he is not materialistic, does not care about possessions. Seem to make it look like he is serious about downsizing. Amanda we are familiar with in ane madly tweeting short amount of time, but the ceo of a publicly traded company, not for the first time. It makes you wonder if it spooks investors that, in 75 minutes, he is tweeting, saying that he is selling everything. Does that go to his state of mind, credibility . Dana investors have sort of come to expect this from him. Friday, the market responded, shares were down 10 , but they are back up today. ,is erratic behavior on twitter people that are longterm investors have come to expect it. The stock is still up for the year. Elon is being elon. Very similar to the way that President Trump uses twitter. That behavior has been normalized to such an extent, it is something he gets away with. Is not getting involved, the selloff has not continued today. Just some ways, it is accepted by the investor at least longterm investors in the shares. Shery it is a new normal. Lets talk about their fourthquarter earnings last week. How much pressure did we see four more cash flow coming from the company . Teslas earnings last week were quite good, posted a profit. During the earnings call, musk was upset about the fact that the factory in fremont could not open, he went on a rant about giving people their freedom. The big question for tesla is the second quarter. They cannot sell cars they cannot make. Right now, the factory in fremont is not running. The bay area has one of the strictest lockdowns in the nation. That will really impact them unless they can shift the huge amount of production to china or rampup china faster than they already have. Amanda thank you so much, appreciate it. One thing is clear, Technology Companies in general are bracing for one of the worst environments may have seen in many years. Earlier, we spoke to salesforce chairman and Ceo Marc Benioff about how the company is changing their business in the face of the covid19 outbreak. This is my first pandemic, i dont really know what im doing. Im trying to figure it out as i go. I didnt know what ppe was 90 days ago. Now we are doing everything we can to make sure our hospitals are wellequipped. Thisis also why we built through the software, because this is going to be important, why we will have a chief Health Officer at salesforce or the first time. I dont know how we can manage a Large Corporation around the World Without it. When we look at the economic environment, are we in a recessionary environment, depression area environment . We know that we will be in one of the most severe economic downturns that we had been in as a company. We are taking action right now to make sure that we can be successful, and so that our customers can also be successful. What is your sense of how the Trump Administration has handled the crisis, and what needs to be done . Marc it is hard for me to opine on the government response. As i said, this is my first pandemic. I know for our government and a lot of governments around the world, this is their first pandemic. For those of have been through these pandemics before like some of these Asian Countries and we have offices in taiwan, south korea. They have done a much better job because this is not their first time. In south korea, we already have our employees going back and making sales calls to customers in a safe environment. Reopen ourwe will offices. They are ahead of us, they have done a great job. They are modeling how to be successful in the future. I am confident, as we have our second or third pandemic, we will do a lot better than whatever first one. You have been incredibly front, havee ppe also called on companies to make a 90day no layoff pledge. What happens after 90 days, given this has become so much more severe economically . Up thatrea commitment, or will salesforce have some of their only us . Marc when we first started, we said it would be three phases. Are getting ready to exit this 90day crisis. We said, lets not lay off anyone in the first 90 days. Of course, that is difficult for a lot of companies to do. A lot of companies followed us. I was surprised. They made their own 90day pledges. Now we have the ability to come back to our offices fully intact as an organization. That is extremely important to us, and for others. Or those that have let go of people, are experiencing a need now to rehire, i hope the government in the second phase gives companies incentive to rehire aggressively. I think that will be extremely important to make sure the second phase is accessible. You have been very outspoken about big tex, facebook in particular, critical of facebook. Washington has had its eyes on big tech. There is a discussion about whether this pandemic will make some of the Big Tech Companies even stronger. I wonder if you are concerned about that, whether big tech could become even more powerful as a result of the crisis . Marc it is important that every company do what they can to improve the state of their world with their organization. When you are the ceo of a company, you have to ask, what am i doing to improve the world for my customers, commercially and philanthropically . What we have seen in social companies, you have seen this, with the spread of misinformation, giving poor health information, it is unacceptable. I was encouraged when i saw several of these organizations pull back and get more aggressive to make sure the information that is getting out to people was true. You cannot be giving people the wrong health information. This is where the government must step in and regulate the social Media Companies and hold them accountable for truth. Marc benioff, salesforce chairman and ceo, speaking with emily chang. Coming up, a popular phrase or investors is sally may and go away. But is it a helpful guide . This is bloomberg. Amanda im amanda lang in toronto. , alongside shery ahn in new york. We have been watching stock april, rallying off of but is that all about to change . Gina martin adams is with us now. Great piece on the terminal breaking down the elements of this market. I want to start with moving averages, and the resistance points we are hitting, support that markets need to find to test whether the bulls stick around. Think about the Broad Perspective of the s p 500, the 200day moving average is pretty close to the finding whether we are enabled trend. Be thesumption has to equity market is still caught in something of a bear draft. Given we have had a pretty of those lowsge led by typical leadership, and we see small caps participate, we are watching the 50day moving average right now to form support in the midterm bear market. If we can find support, it will be somewhat constructive for investors looking for a continuation of this bounce to finally clear that bear market hurdle. Shery how much of a reality check are we getting from earnings season . We are almost halfway through when it comes to market cap on the s p 500. Gina you can accurately describe the earnings season as someone awful. Even worse is the outlook. Markets are struggling right now with the realities of the current expectations and the uncertainty of where we are going. If you think about the realities of the current earnings stream, we have an index on track for a 15 decline yearoveryear on earnings on the first quarter. Secondquarter estimates are for a 40 decline. Analysts predict a 20 decline for all of 2020. That is taught for stocks to absorb. The reason stocks are going up reopening,ipation of anticipation that infections will continue to slow, and very strong policy backdrop. Importantly, the fed Balance Sheet is set to double this year. We got tremendous support from the fiscal body, created at least a floor for stocks. But we will have to gather some optimism that we will head into recovery in the third and Fourth Quarter before investors feel comfortable putting a tremendous amount of capital at risk in stocks. We refer to this sell in may. Longstanding norms, advantages in the market. Given this is such a unique time in history with no precedent, do we throw all of that out, do we assume everything about the market will be different in the way it behaves or the next few quarters . Gina i have a heavy degree of skepticism about these seasonality figures that we throw around as given. Sell in may is one of those. You dont always have terrible summers. In fact, on average, some of the returns are significantly stronger after firstquarter returns are awful. Seasonality often migrates yeartoyear. The longterm averages suggest your best returns for stocks are typically in the fourth an early first quarter. You usually also have some pretty significant seasonality in march and april, but when you have a market that made a massive low in march and started to recover after that, you want to consider the trend more carefully than you consider longterm seasonality. Adams with aartin look at the markets. Thank you very much for joining us today. Live from new york and toronto, this is bloomberg. Shery it is 2 00 p. M. In new york. I am scarlet fu. Romaine and i am romaine bostick. This is bloomberg markets. Lets get a check of where we are. Kind of a mixed bag. The dow jones and s p 500 have been camped out for a good portion of the day. We have seen some changes and the nasdaq names, particularly in the nasdaq 100, and we are talking microsoft, apple, netflix, tesla, to the downside industrial financials, and airlines one of the biggest underperformers there. That after we got the news that fokshire had unloaded on its ur main Airline Stocks they have held for years. Another risk off day, at least in the smallcap stock