Suffering. The fed will use the full range of tools. Powell also saying that the actions are only part of a broader response. Powell also saying that the scope and speed of the downturn is without precedent. Andill hear from jay powell treasury secretary steven mnuchin, two people who right now appear to be working relatively handinhand. It is a big part of the reason why you are seeing risk assets rise as much as they have on a day like today. Moderna that a vaccine might be in the cards. Taylor i think the key takeaway is, yes, the market could be trading on economic data. There, but for the majority, this has been a health crisis. The markets were really hoping for a vaccine. It could be sooner than expected. We know that it also has the potential to not go through. All of the vaccines, the testing, that is really what has been driving these markets. When you see Something Like 900 points off of one study about potential vaccines, certainly ,omething that catches our eye a very big day. I want to get back to our guest streetith us from state global advisors. We have been talking a lot about the interrelationships between these equity and bond markets, and powell. Now that we are getting more , using afrom powell full range of tools, is he repeating what we have already known or does this give more green shoots to the economy because we know that the fed is not always a lender but the buyer of last resort . Theael in the aftermath of Global Financial crisis, there was no playbook. Central bankers and policymakers. Ere making it up they potentially saved some jobs. This time, they have demonstrated an ability and willingness to be bigger, better, and bolder than ever before. Powell is suggesting that he will go even further if he has to. I think that markets are relieved by that. Thatne with regards to feeling of relief, then we have to Start Talking about the zero bound of Interest Rates in the u. S. And these bets that we could see negative rates. I wondering, do you think we can get there . If so, does that become more of an impediment to risk assets or does it continue to help . In his powell suggested interview that he does not want to go to negative rates. He does not believe we should go to negative rates. He believes that those who have gone to negative rates relay has not worked the way we had thought. I think the fed will do what it can to keep the u. S. From moving in that direction. I think there are Clear Company clear consequences in terms of analyzing savers. So, i think the fed is committed to not getting to negative rates in the u. S. Even though the probability is rising somewhat. I believe, similar to what powell suggested, japan has flirted with it of rates as early as the 1990s. Europe has been a negative rates since 2014. It is not much it has not done much to spur growth and Health Margins in those economies. Romaine we are speaking with michael arone, chief investment strategist at state street advisors. We have a few more questions for him but Abigail Doolittle will jump in and give us a breakdown of what we saw in markets. Abigail whether it is the hope around a vaccine for the virus, or talking about fed support, liquidity, fed chairman jay powell over the weekend saying the fed stands by doing whatever it would take potentially to support this system. Awever, if we take a look at 20day chart, today, we did have the best rally going back to early april. You can see the range, a real tugofwar between the bulls and the bears. Lots of uncertainty. Sectors such as the financials that have broken to the downside. It will be interesting, whichever way it does break is going to be an epic break. Check, cross asset class it is certainly risk on rate we do have the fix risk on. We do have the vix below 30. The yen is selling off even though you have the dollar selling off. Copper, risk on, its best day since september of 2016. Oil, tomorrow is the last day of the june contract trade. Since that last may debacle, you see a 136 gain. It feels like a casino or some kind of dotcom situation for oil. Romaine abigail, thanks for that update. I want to apologize to michael arone, we are going to have to say goodbye to him. He is chief investment strategist at state street advisors. He gave us fantastic insight into what he sees with the market and economy. Our chief bring in bloomberg policy correspondent here. To give us a little bit more testimony thatis we just got out of washington, what Jerome Powell is going to give tomorrow. What do you see in here . You dont see a whole lot. This is the very definition of statement by the chairman. The chairman said basically what he has been saying all along, that the fed is committed to using their full range of tools, that they will keep Interest Rates at the almost zero level. The rest of the testimony is pretty much a recitation of the programs they have put in place, the nine lending programs working with the treasury department. Without any explanation of what they will do next or how they think the congress should act. On 60 minutes last night, they seemed to suggest there is much more that congress can do. He is not making any more suggestions along those lines today. Headline is that powell said the fed would keep rates near zero until the economy is back on track. Rulingt he definitively out negative rates . Has he taken a clear enough stance on his position about negative rates . Getael you will probably an argument about that. Fed funds futures trading suggests that he either hasnt been clear enough for they dont believe him if he has. Last night, saying that fed officials dont like negative rates. In october, they discussed negative rates and every member of the open Market Committee voted against the idea. At this point, the fed is committed to not doing negative rates. But may be because of the history of the fed pending to the markets will, people are not ready to believe him yet. Mckeee thanks to michael on the update. We will of course be covering that tomorrow right here on bloomberg television. Crossing the wires out of washington, President Trump saying that he had asked he was asked by secretary of state mike pompeo to fire that state department watchdog. This was in the news, inspector trumpl steve linick, saying he was asked by mike pompeo to fire him. That does it for the closing bell. Whatd you miss . Is next. Romaine broadcasting live from new york to our viewers worldwide, i am romaine bostick, joined alongside taylor riggs, inform scarlet fu, who is taking the day off. Taylor the s p 500 back to levels we have not seen since march 6. Out 32 since we bottomed march 23 and pretty incredible, the come back we have made within these markets. I would also highlight tech, because this is a theme that we started to notice last week, that you are not seeing the type of leadership from the tech markets earlier on in this rally. It is all about those small caps. As you can see, it is Jerome Powell coming in and being the buyer and lender of last resort, boosting up the economy. We do know that all of the gains made by then part incredible news of mo darrens candidate vaccine. Which we aree, hoping to start in july of this year. The study would be several thousand suspects across several countries. Protocolnalizing the as we speak with the fda. Taylor joining us to discuss the results of the study, Baylor College dean for the school of medicine, who is currently working on developing a Coronavirus Vaccine at baylor. As you are sifting through the news of what could be a potential Coronavirus Vaccine from moderna, what do you like and what gives you cause for concern . The problem is that there is not a lot of information out there. The fact that there was no data in the press release. You are kind of left trying to of what isa leaves happening and trying to understand what is hype and what is real. Good news that, of the eight individuals they injected, nothing bad happened in terms of adverse effects. Of had a significant level redness at the injection site. Differentking at two doses. It was showing that at least it was safe in the initial postinjection period. Is other big question then whether it is an immune response that will protect against the virus. After eighted that, of the volunteers were immunized , they developed an immune response comprised of neutralizing antibody. That is good. The question is, how much . That is significant because it is not just a plus or minus. You need a lot to protect against the infection. Laboratory animal experience that experiments we have done so we dont really know that data. It looks like it is an equivalent amount to those who get the virus, but we dont know exactly what that means, because there are some studies that came out of Rockefeller University in new york that said it is actually a very low amount. Romaine dr. , once we get to the later stages of trials, whether it is on this treatment or other companies, and you start to get a broader testing of a larger sample size, a larger population, what is it that characterizes success that would allow a vaccine like this to be put onto the market dr. Hotez ultimately, all of these vaccines, maybe hours as well, a dozen, two dozen vaccines, these are large studies of around 25, 30,000 people, where you are immunizing both vaccinated volunteers as well as placebocontrolled negative controls. You are looking for two things. In this to know, setting, that the vaccinated individuals are not getting the infection where is the controlled are at a higher rate. Then looking at that many people, you will know whether there is going to be any safety issues in that group of individuals, which is reasonably sized to give you a said give you a sense of the safety of the virus. To problem is it takes time analyze the results. The thinking is that it will take about a year. We start Clinical Trials for the first one in july. 2021, then the others to follow. Romaine we will have to keep it there. Interesting stuff. Obviously, the whole world waiting for some kind of progress. Dr. Peter hotez. We will be back in a moment. This is bloomberg. Thoseare supportive of that are transparent and remain available to all companies or competitors equally, such as the payroll support schemes across europe, such as the u. K. Loan schema. Credit a triple be rating. We are opposed to come on top of that, the illegal state aid that air france will receive, the 10 billion, air italia, an airline that has been bankrupt for a number of years will now receive 3 billion without any corresponding corresponding supports to the other airlines in that market. Is ane are calling for end to those illegal discriminatory, and confining the industry to payroll support and government loans made available to all airlines operating in those economies. Are you going to be looking to other governments for support, to some of the payroll support schemes and other countries such as spain . The payrolly for support scheme and all of those countries and we are very grateful for that support. We are asking the question, we can survive for many months if not years on payroll support. We do not need any state aid on top of that. We are asking, why does air france need additional state aid when they are not even flying at the moment. Need 12lufthansa million when there payroll is being paid by the austrian, belgian, and swiss government. Aid when wee state emerge from the crisis to engage in massive below cost selling. Store competition all across europe. It to buyf will use up all the competitors in europe. We ask the question repeatedly. Margarets comments this morning. Why is it that the german and french government are the biggest state aid dopers in all of this when other governments like the u. K. , the spanish, french, european governments are not filling out there airlines . One of the arguments you will get out of berlin is that they need to ensure that there is a carrier that will be able to cater to Business People and also longer haul flights, a market that you dont necessarily serve. If there were no lufthansa, no air france, would ryanair expand its business . The argument is completely specious anyway. The long haul would take longer to recover but they are not seeking state aid. What we have been calling on the European Union to impose is, if the German Government wants to give 12 billion to the tons of, it has to give the same state aid to other airlines operating in germany. Not that we dont want state aid, but that is a way of limiting the amount of illegal state aid that goes to lufthansa. 12. Dollars on top of tax refunds. They dont need this amount of money. Out will use this to wipe the rest of the competition in the german market. It is toassively massively distort the longhaul flows into europe for the next number of years. They can undercut iberia and the other longhaul carriers. It is a massive distortion of and it isition something that the European Union should not be allowing to go ahead. More on the airlines, tune in this evening with30 for leadership life David Rubenstein and united ceo oscar munoz. Walmart and home depot reporting tomorrow. Cutting dividends and seeking emergency financing in their fight for survival. Jordan, amazon set a really high bar just a couple of weeks ago. Can Companies Like walmart keep up . Jordan great point. The two groups when it comes to the pandemic, the essential retailers like walmart and target, and everyone else. Walmart and target today great job, also home depot, the places selling home goods. It will be interesting to see just how well retailers who had to close their stores did this quarter . Romaine what about the Department Stores . Weve already seen a couple of bankruptcies already. Are you expecting more . Department stores got hit hard. They were one of those nonessential retailers. Stores were very important to them. s earlier this month. Pressure especially on the apparel retailers. Romaine i wish we had more time. We will be back in a moment. 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. Taylor we are getting some breaking news. President trump has come out and said he is taking that malaria drug hydroxychloroquine. The medical doctor said that it was ok for him to take it. So far, he seems to be ok while taking this malaria drug. The president says he has been taking it and that so far he feels ok. Romaine there you have it. Lets turn to the economy. Getting prepared to testify. The treasury saying he expects Economic Conditions to improve in the third, fourth quarter. The prestatement from Jerome Powell, will also be testifying, he came out a little bit earlier. Of course, we will look forward to that tomorrow when they testify before that committee. Theor we want to welcome medley investment strategies. We heard from jay powell at the top of the hour, when he had prereleased some of the statements we had heard from him tomorrow. Of tools to support the economies. See further tools do you that they have not done already. There is of course more to do in the lending space itself. Add more, they can capital to these vehicles, these special purpose vehicles, additional lending power. What is more important from last wasts 60 minutes interview his confidence in the economy itself, the resilience. Against thet bet economy. I think that really has an impact on markets today. With the vaccine, i think that is what ultimately will drive things. Rally of expectations romaine the comments he made particularly about the economy did get overshadowed a little bit particularly with regards to the potential. That powell laid being reflected in the market . Ben i guess he wants to say that we are not in a situation where we can never recover from this because we shut down our to protect our health. If you link that into the vaccine is today, i think that is the combo of white the market combo of why the market is reacting. The solution to this crisis, it is a vaccine that works and can work for everyone. I know they are saying that markets can extrapolate this out, the economy can recover faster. Be latter is important, we we may be open quicker the faster, if we get this help. Taylor if that is the case, i am curious why jay powell has not come out definitively against negative rates. Hearde not necessarily jay powell say that we have not seen negative rates. I am in my own view that big of rates are a very mixed tool, so to speak. It can impact lending, financial conditions, but it impacts the situation. Rates are being particularly used for that reason. In the United States, given the dynamism of the economy, which powell highlighted in the 60 minutes interview, it is actually a good antidote to deflation. , thenk, for that reason negative rates are not particularly important at this point. All of these lending facilities we have put out, what is the impact on the economy precisely . You can highlight that the Paycheck Protection Program as well as the main Street Lending program, those could have potential impact on employment. Responsea lot of the we have gotten out of powell and fiscal policy makers, keeping people employed and making sure they continue to have paychecks. How confident are you that the folks out there who do have money in their pocket are going to be willing to spend it, and spend it at the level we were used to seeing before the covid19 crisis. It is a lot to do with having the confidence to go out there. We all know that we need to have adequate protection as well as the ability to go see the doctor and take any kind of medicine if you do get sick. But i also think there is a willingness to resuming cavity. If we were away from it for three years or so, it may have a different psychological impact. Of willingness to start. The employment picture plays a big role. Romaine great to hear from you, always great to get your insight. Ben emons, global macro strategy managing advisor at medley global advisors. Lets get to the first word news with mark crumpton. Mark President Trump says he has been taking the malaria drug hydroxychloroquine to prevent symptoms in case he gets infected with coronavirus. The president says he feels fine and that his dog says it was safe that his doctor says it was safe for him to take. Attorney general william barr says he does not expect the Justice Department to open a criminal probe into president barack obama or former Vice President joe biden despite prodding to do so from President Trump. Barr i cannot allow this process to be hijacked by efforts to drum up criminal investigations. I am committed that this election will be conducted without this kind of interference. Any effort to pursue an investigation of either candidate has to be approved by me. Mark President Trump and his closest allies had been demanding that the democrats be prosecuted for what he calls obamagate. He accused the Obama Administration of working against him in what he calls the biggest political crime and scandal in political history. The British Government says it will soon be able to trace the contact of anyone who has tested positive for the coronavirus. Britain initially lagged behind many countries in testing but now has the capacity to do more than 100,000 per day for the virus, though the target is not always met. The government is now aiming for 200,000 per day. Germany and france have agreed to back a plan for rate Recovery Fund to help the European Union whether the pandemic. In a show of unity, german chancellor Angela Merkel and french president Emmanuel Macron appeared together in a press briefing today. The biggest obstacles have been bridging differences between richer and poorer nations. 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 a mark crumpton. This is bloomberg. Romaine quick check here. Baidu, the big chinese internet company, reporting earnings coming across the wire. Q1 revenue coming ahead of estimates. Q2 revenue forecast, 25 billion billion yuan. The company is saying that it is seeing offline activity rebounded. Taylor i am taking a look at shares of pure leaf. They reported record revenue, 29 sequential growth. Losingot profitable, but three Cents Per Share completing acquisitions in this difficult environment and securing a term loan facility. Investors seem mixed, shares off about one half of 1 . We will be speaking with the chairman of the company next. This is bloomberg. Romaine welcome back. A lot of talking about the fed not running out of ammunition. The founder of Oaktree Capital saying that the fed does not. Ave more power fed hased about how the not limited the bond buying. We were very active buyer in the bond market in midmarch. On the 23rd or 24th of march, the government talked about what the program would be. It drove up prices in the public credit market, so we are not buying as aggressively at this point. Marketchanged to the would be,the market that had impact for us. Do you think Investment Opportunities are likely to improve from this point forward, where you will see the opportunity, the possibility of making elevated returns again, or are we sort of here now and here for the time being . You tell me. Will the fed try to be the buyer on every transaction . In theory. Yogi berra said, in theory, there is no difference between theory and practice. In practice, there is. The rating agencies and willtment banks, 25 or so default. That is a lot to buy. In april, i believe there were 19 defaults or bankruptcies, and i believe that is the greatest in history. And we are just getting going. Defaults occur when we are just getting cash. Thefirst full month of crisis, the crisis has months more to run. As i mentioned before, there are large, highly leveraged companies, investment vehicles, that the rescue program is not likely to reach and take care of. Mind to think we do not have fallout, and typically we have been able to profit from that fallout. So, oaktree will likely become a more aggressive buyer in the months ahead . Absolutely. Like they say in football games, they take we take what they give us. The greater the dislocation, usually, the greater the bargains. We think there is a substantial opportunity ahead. Romaine we were just listening to howard marks, cofounder and cochairman of Oaktree Capital. He has seen it all, all the way back to the 1960s. The only person who can follow that is joe weisenthal, the cohost of whatd you miss . Joining us on the phone. What have you been watching . Joe all eyes on the u. S. Market today. Optimism for the vaccine potential. Rallyo overlook the huge we signed europe as well as some of the news. Everyone for years has identified the core architectural problem, or a core architectural problem of the euro zone as the lack of a fiscal transfer union, lack of true burden sharing. Today, we got a puzzle from , not properlyron creating a full transfer full transfer union. France, other rich countries, provide straight up grants to some of the more struggling countries. It would be a move in the direction that a lot of people long thought was necessary. We saw a rally in the 10 year today. German stocks up. So, in addition to everything driving u. S. Markets, some real enthusiasm in europe as well. Taylor you were taking a look at some of the homebuilders. Looking at home depot tomorrow, a lot of projects, doityourself, yet you heard Companies Like zillow, saying people doing these Virtual Tours want to buy and sell homes. What are you seeing here . Joe i have been stunned, you just think, in the period of massive layoffs and the inability to really see things in person, or the discomfort people would have with that, you would think the home market would be in a deep freeze. It has not totally been so. It has obviously been hit but people are doing Virtual Tours. Taking advantage of the low rates. But also, again you think there will be a more robust, cyclical recovery. Maybe the reopening news, some of that optimism over a vaccine, then you start to think, we get that structural demand for homebuying again. I saw a downgrade last week. It was simple. They said, unemployment is really high and homebuying is not going to well. If we start to think that reverses somewhat, you would expect to see the homebuilders rally. Etf up homebuilder almost 9. 5 today. Taylor thank you as always to joe weisenthal. Coming up right after whatd you miss . Facebook coo Sheryl Sandberg joins bloomberg technology. This is bloomberg. Taylor i want to recap some earnings from pure leaf. They did come out and say they are seeing 29 sequential Revenue Growth, positive and oford adjusted ebitda up 45 quarterly growth. Still posting a loss. Several acquisitions, which is several which is difficult in this environment. Also, saying they have closed a senior secured term loan facility. Slightly to the negative, shares off about 0. 5 . Joining us to break down all of chairman boris jordan, myboris apologies. Topline line Revenue Growth not quite profitable here. What is the pressure to manage between topline growth and bottomline profitability . Boris i think it is early. We are acquiring and building so many assets around the country that obviously our depreciation and amortization costs are quite high, and that is what is driving the company into a slight negative. Much capex asas we have had to date. 105 billion of manage revenue. That is 158 year on year. To 20 million, a 45 growth year on year. The cannabis business in the United States is healthy and doing well. Covid, its period of has shown a sense of its maturity and it has been able to service all of our patients and adult use users around the country safely, serving curbside, selling online, incorporating delivery into our services, really to do anything we can to keep our employees and patients safe at this difficult time. Ofaine in addition to some the challenges you would have in this environment, with regards to the sale, i am curious as to what kinds of issues you might be dealing with as far as the regulatory front. Regulatory relief potentially making its way down the pipe with more states legalizing cannabis and more softening of banking regulations that may have given Companies Like yours more options with regards to financing. I think you need to differentiate between the federal regulatory environment, and the state. On the state level, governors have really stepped up and allowed Cannabis Companies to service our patients and customers. Havinglow us to, without background checks, to do online sales, deliveries. We have been able to incorporate direct Debit Services in our stores to allow people to not have to carry cash so they can pay by debit card. And stategovernors regulators have really stepped up to make this industry able to operate. On the federal level, what we are seeing is the house of representatives, in its most recent package, has approved would allow that the industry to bring down its overall cost of capital. Think the senate needs to step to the senate. Cannabis pulls over 90 for medical in the country. Over 70 for adult use. Most of the country either has access to medical or adult use cannabis. The senate needs to understand that this is a Consumer Product the country wants and needs. For us to make this a mainstream business which would allow us to do banking services. Emily welcome to bloomberg technology. Promising results from Early Vaccine testing sending shares soaring. Moderna says early tests of its vaccine candidate has shown that it is safe in people and also prohibiting the virus from replicating. We need longer studies to confirm that the