As well as up. Romaine you really have to go back to the lows we were in in march. What was an improbable rally of 40 less on the major indices, even with the big selloff, if anyone used february and march as an entry point, you are still up 20 . Taylor in the last hour seeing this final hour of trading was crucial. To see yesterdays big selloff was or something indicative of more selling to come. This last crucial hour, really important to show us where sentiment is. Speaking of sentiment, look at this chart. I wanted to give you an update because we talked about the record low ratio on the put call back to the earliest this week back in nine years back to 2011. We got an update, the ratio is right in line with the one year average. Fear would be higher if the put call ratio was higher. You are not getting the type of fear perhaps we were starting to see yesterday. Lets take a look at the individual stocks that were moving, lululemon, i always want to see what is moving to the downside on an up day. The first time this company has missed estimates in four years. Tesla was cut by Morgan Stanley and goldman. Hey say gm is a better buy American Airlines seeing domestic capacity down 45 in july. That is an improvement when the entire secondquarter capacity was 75 drop. Tsa passengers, the count plus 500,000 yesterday, people are flying. Also this chart, something we have been talking about, we are seeing cracks in the credit market not to mention the Household Indebtedness was pushing up to cost of protecting against default particularly within the highyield space. You are looking at the market up to 506, recovering a little bit but something i am keeping my eye on as we see how all of this indebtedness shapes out in the bond market. Romaine lululemon, i did not realize i thought that was recession proof. Everyone kept buying yoga pants. Caroline you need to show off expensive likings. Online sales were up but it was the total sales that was 17 and that is where they got ahead of analysts. It is the first time to have come in below this estimate. Usually it is pretty straight spot on. I love the way you highlighted what on earth is going on with hertz. It has been a wild ride. Lets take the desk at the take from the m a managing director. I want to get your focus on how much of a risk the Retail Investor is. Are they leading the charge, how much insight outside influence do you think they have when they are building up risky stocks . It has been quite a while since Retail Investors have been a factor and then a big participant in a major way. It is interesting to see people, without sports to bet on, they have turned their attention to the markets. It seems like they played a big role in cyclical that we have seen since midmay or so. That was the trade that really took a hit yesterday. Caroline it certainly did. Great to get your take. Running us through the market close. Ed campbell of q a. Uptick at covid19, the in various states, arizona, texas. We will get the insight with the Johns HopkinsJohns Hopkins hospital. This is bloomberg. Is bloomberg. Caroline i am caroline hyde. Taylor i am taylor riggs. Romaine i am romaine bostick. Caroline the days of flirting between gains and losses, we end on the green side. The s p is up 1. 3 , but not enough to shake off yesterday. Rote yesterdays rout there is a question of how to balance the economy with citizens health. Canadian regulators say the collapse of the exchange could trigger all of that and more coming up. Lets look at how the markets closed. Taylor we have the weekly runup in the bond markets. Monday we were talking about 1 yield on the 10 year. We were at 93. Every single day it has been higher. Back down to 71 basis points. This is a 19 point basis rally on the week alone. 60 basis points, the 40 day moving average. We could not get below 60 basis points on the week. We flip into the equity markets, look at this chart in the terminal, the worst week going back since march 20 despite the big gains we talk about today, showingor the week, that maybe things are as good as we thought great we would get analysis from susan schmidt, the head of equities at aviva investors. Yesterday approved to be eight by the dip i think it is both. I think we will see more selling pressure because sentiment around the economy and the pace of recovery is going to shift dramatically. I think we saw a catchup trade and a lot of names left behind gaining ground, really since may 15 onwards. Romaine a big question go ahead. We are seeing with the catchup trade, we saw that reverse this week. If people see the soundbites that are more negative on the economy, we see the market back off. We can say it will continue to be volatile. If you look longterm, there is a nice appreciation ahead of it, but volatility will be there and we will see down days. Romaine the pullback seemed to center around jay powells comments some people interpreted as suggesting that the economic downturn is going to last for a long time. Whether or not that is going to be the case, it has to be seen. Hedged in ariced or way for the possibility this does drag on longer than what we had thought . Got overlythe market optimistic. How far along with now this wakeup call this week, to see that volatility return, i think the market and Institutional Investors are getting more concerned and cautious about how they position and hedging. As we see this volatility, we will see that more if the Institutional Investors pay attention. The market is swinging with big updates. Then we saw yesterday down days interrupting the flow. Caroline what about the Retail Investor . We have been reading thrilling stories about the bets they have been putting on. You look at stocks like hertz, but do you think they are having an outsized performance . We did see a lot of retail money flow into the market. That did have an outsized performance. It was reflective with Retail Investors saying i feel better about this. The market has been on a huge run. Let me get involved. End ofme in at the back the run and that pushed things up further and exacerbating the pressure from the catchup trade. As Retail Investors start to get negative soundbites, they get cautious. When they hear jay powell saying there will be a lot of unemployment left, they tend to back off, and then you are back to the Institutional Investors and getting a resetting in stock prices. Taylor you talk about how corporate earnings look like they will betaylor continuing as the economy improved i wonder how you think about that as you go down the credit scale . If the economy is improving, we are more comfortable with credit . Overall we are. The trick with credit is how much leniency is are you given if you get to a troubled point on your Balance Sheet and you need support . Thanks banks have been willing to work with companies to help them work out of this. Everybody recognizes in many cases this is a timing issue. Overall with credit you can get comfortable if you have a positive outlook. It is the tricky thing is the timing of it and understanding the timing of the cash flows. Romaine so great to get your thoughts. Breaking news, we talk about the Retail Investors, hertz has been in the news for quite some time, going to sell 1 billion worth of stock. They have got approval from a bankruptcy judge. Their shares were up 37 , fluctuating in afterhours trading. Caroline a former bankruptcy judge was saying what i love about bankruptcy is there is never a dull moment. We have never seen this happen when they are able to sell such phenomenal amounts more of shares. What we were discussing the retail side, and they are bidding the shares up evermore. You went to where i was going. When i was in school, equity holders were the first to get wiped out. As we have been talking about, in a weird way, retail feels vindicated relative to the smart money as retail and some of those reopening stocks they have been investing in have been the out performers. Romaine i think the rules you learned in school no longer apply until they start to apply again. Covid19alk about the cases, concerns emerging about cases in states that have reopened. Should we be fearful of the second wave . This is bloomberg. S is bloomberg. Thrilled to be a Public Company and take the next step. It is a testament to all the hard work of our folks and we are excited by the longterm opportunity be have as a company. One thing you are looking to do at some point is turn a profit. You have had a loss despite growing in double digits figures. When do you anticipate making a profit . If you look at our historic capital structure, we carried a fair amount of debt which is not unusual for a private company. As we have gone through this process, we have raised a pheromone of funds that will allow us to get the right capital structure. That sets us up for the future to move towards net income profitability. I would stress we are a highly Profitable Company from an ebitda standpoint. We generate cash flow and that is allowing us to invest in Growth Initiatives around expanding the market. We are experiencing a high Growth Market that has secular trends and allowed us to continue to invest in recycling. Backers private equity i am sure they are pleased with the exit. Own. Ou are sort of on your how do you change that and pay down with the amount of money you have raised and what structures do you want . Reporter the shares we issued were all primary shares and the primary use of proceeds is to pay down debt. I will not get into specifics but that being the primary, that has a meaningful impact on our capital structure and allows us to continue to invest in the market. Not ourur market is types of materials. Reporter you have 1500 employees and several factories in the u. S. How is the pandemic affecting everything for you now from the decision to go public to being able to continue making the Outdoor Furniture . We make outdoor decking and living spaces. We highlight and manufacture in the u. S. As the pandemic came upon us, our priority was the safety of our employees and the way in which we manufacture allows us to create an appropriate distance between our employees. That combined with the change in the way we do things, gives us the confidence that in any environment, we can operate safely. We have been able to maintain our supply chains. We primarily manufacture in the u. S. With our supply chains primarily based out of the u. S. We have not had any interruption. Our customer base, we deal with contractors that are on the outside of houses. Our customer base, as they do construction and able to operate safely and get people out in living spaces. Romaine that was the azek company ceo speaking earlier. A number of cases in the u. S. Nationwide did rise today, but it was in line with the average over the past seven days. We have seen a remarkable increase in certain states are the number of cases are rising above averages in those states. This is a senior doctor joining us now to help us understand a little bit more about this potential second wave a lot of people are talking about. I want to start off with the idea, should we be talking about this as a second wave . Or is this part of the first wave that was going through the nation . We have not really gotten through the first wave. We still have 20,000 cases per day every day. This is something that has not really been controlled to the level we would call it a trough before we get a second wave. It is more of the same, a heterogeneous outbreak and we will see spots with increased intensity and that may be another spot and that will be par for the course. It has been incredible, the speed of clinical trials. How realistic is it to get a vaccine this fall or this year . It is in the realm of possibility but i would not wed myself to a date. Vaccines are measured in years rather than months. We are moving faster like making vaccines before we know if they are safe and effective. That is speeding things along. We have got to have a lot of doses, and it will be challenging, and we dont know what hiccups may appear in phase two and three clinical trials. Caroline what can we learn from europe where some countries are opening to some success . They have had to swallow a slight uptick in cases, but they have been focused on testing in particular. What can the u. S. Learn . It is not that we have to test everybody, but those who are sick and part of Contact Tracing need to be tested at will very easily. It is for it world from june than it was in march. The biggest lesson is we will have to accept that will be cases. Casesple interact, more will occur. It is keeping them to a level that is manageable by hospitals and by the Contact Tracing. That is how we keep things in control and we learn to live in live with it. We have to come up with a way to reduce the harm. Maybee being a doctor, you can shed light on the idea you have had so many people that have been infected or been exposed and have antibodies, does that prepare the population resist hether or weather or resist if we get a bigger wave . With othere case infectious diseases. It makes it harder to find new people to infect. We dont have anywhere near that level. We need 60 of the population to cross that threshold. We dont know how long the immunity lasts. We dont know how long it lasts and that everybody who has been infected will have enough immunity there is an important study that needs to be done and we need to get herd immunity for a vaccine taylor 23 and me was showing that people with blood type o show more community. Blood type a, more susceptible to being on a ventilator. Some of the other studies we are looking at, what is the other information we are starting to pull on people who were showing some immunity more so than others . We are learning there are differential risk factors and one is the blood type you have and medical problems of hypertension. We are getting more granular at understanding who is at risk. Public Health Messaging to those groups more likely to end up hospitalized. That is one of the main priorities. That is something we will learn more and more. We will have a lot of learning that will go on for several months. More stressful situation where people are looking at further protests. What are the steps you are seeing that are helping the most in terms of preventing the spread of coronavirus during an era when people want to take to the streets and have their voices heard . The virus is going to take any opportunity it has to spread between people. Mass gatherings are perfect example. There are ways to social distance and make sure you are washing your hands a lot, refrain if you are chanting and yelling and all of that, a mask may prevent the droplets from emanating. Factve to worry about the these protesters are getting hit with tear gas and pepper spray which causes them to cough. That is one of the concerns we have, what type of transmissions we are going to see and how do we keep them to a minimum so we dont overrule overrun our hospitals. Caroline great to have you with us. The senior fellow at Johns Hopkins university. Stay tuned. Johns hopkins is supported by our Parent Company bloomberg lp. Withll have a conversation the ceo and cio of arena investors. This is bloomberg. A massive way of distress that is hurting credit markets. Desperate firms are looking to take advantage. To cut obligations and raise cash. I remember reporting on the debt market when i first took my job here in 2000 eight 2009. We had waivers. You are extending it again. Absolutely. It will be much more concentrated. Romaine one of the issues we have heard a lot about is collateral transfers. That seems to be a big point of contention. Can you give us a sense of what that is and why there seems to be such a difference . Another of the unintended consequences of the search for yield over the last two years. To ownwere so hungry yield that private equity transactions became more oppressive. Those instances, lenders have very little time to look at the documents they were signing. A lot of them became very weak governance. Around to a postcovert environment, you are seeing conditions where borrowers are going back into their covenants and looking closely and saying perhaps i can move collateral in one direction or the other away from the spirit of the original credit agreement. Otherwise create more value. Caroline how are creditors reacting . We are seeing gsl, blackrock, they are not just rolling over to this. They are finding a means to fight back. There is a bit of an unintended consequence of a freeforall. What you have seen in a lot of are situations where buyers of existing credit are coming in and looking at combinations of partnering with one another against the borrower or taking a subset of the credit and trying to do a side deal with the borrower. These are relatively new phenomenon. By the fact that the original governments covenants were so weak. Caroline a lot of the issuance and renegotiate we have seen is directly tied to that debt announcement. It was very clear and very interpreted that there was support for this market. Feds and that the input support is in the reality . Or are people getting a little bit ahead of themselves . So far, if you assumed every bad act would be effectively supported by the feds, and the market would continue to learn bad lessons, you would be right. They never really got down to a level passed a third aura halfway down. In order to be a buyer at that point, you had to believe that someone was going to bail you out, that was the government, and they did. At some point, is there a limit to what they will do . Appropriately priced in the marketplace. Arena,e looking at your where are the opportunities for you and those who are looking to garner more interesting opportunities from a distressed situation . Buckets,them in three and the first, no matter how euphoric you are, we can all much agree there is sustained damage to be dealt with over the next few years. Oil and gas credit, aviation, retail, Small Business lending. The second bucket would be situations where a number of competitors are not as in good of the Company Position to compete. A lot of different structures of Financial Assets that are getting done at much more conservative, thoughtful levels. The third is what we talked about before. Empirical data being very poor and a lot of this credit. It has not doubled through to the trustee report. We are spending a lot of time looking at these things. We think the Additional Data will be very negative. Caroline great to get your information in. Have a great weekend. Lets get over to the first word news. Ofk following days violence, but protests, police have withdrawn from a neighborhood where protesters have created a festival like seen. The president has taunted the mayor of seattle on twitter. He said seattle has been taken over by anarchists. Take back your city now. If you dont do it, i will. Today, the mayor had this response. Unfortunately, our president wants to tell a story about domestic terrorists who have a radical agenda and are promoting a conspiracy. This fits is law order initiative. It is simply not true. Lawfully gathering and expressing First Amendment rights, demanding we do better as a society, and providing true equity for communities of color, is not terrorism. It is patriotism. The president continued his complaints in an interview with fox news, saying, we have to go in. These people are not going to occupy a major portion of a great city. In coronavirus outbreak brazil may be much worse than official data suggest. That is according to a new study. Confirmed diagnosis, there are six cases that have not been reported. Brazil has the secondhighest number of cases in the world. Lists 40,000o cases. Researchers say up to half a Million People may have been exposed. Will got trump says he on and do other things if he loses in november. He also questions joe bidens mental acuity. The president s campaign has been calling into question his age and ability to carry out the duties of president. Recent polls show mr. Trump trailing in key states. 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. This is bloomberg. Incumbent on Police Departments to look at the kind of people they are putting in their departments. This is not a simple solution. It is nuanced. There are many good Law Enforcement officers. That goes to the fundamentals of the type of people who are about to wear a badge in this country. The problem begins with recruiting, what is to be done about that . We talked to nancy pelosi yesterday. Said we will have a National Database and a ban on chokeholds. I have to say, i listens to part of your interview with the speaker. Respect to speaker pelosi, who i think is a fabulous leader, i dont believe the answer principally lies and federal legislation. Congress has disappointed us multiple times. Hook, we thought this would be the time for change. After parkland, we thought this would be the moment of change. Congress was unable to act. The answer lies with local Police Departments, mayors, City Councils who really take a hard look at how we are recruiting. One other aspect of this that is not necessarily the george floyd others, i can think of no legitimate reason for a choke in any circumstance. When you look at the eric garner incident, i do think there is an element of training that could make a difference. Teach our nations Law Enforcement the tactics of deescalation. It is incumbent for Police Officer to use common sense and say im in a lifeanddeath situation. Is it really worth it to because this encounter of a counterfeit 20 bill . When i was secretary of homeland security, i commanded the largest collection of Law Enforcement agencies in the u. S. Government. Dont let it undermine your ability to function. Undermine thean border patrol. You have dealt with many people who have arms and are prepared to use them in the right circumstances. , whetheru police that it is a federal Law Enforcement thing or military thing . No matter how careful you are, there will be some people who are not supposed to be in there. It goes back to temperament. There are far too many instances where someone enters with a no knock warrant. And the victims shot 12 times. Caroline conversation there with the former secretary of homeland security. Lets shift gears. Have all gathered at the Morgan Stanley financial conference. There was a wild ride of said decisions and economic concerns. Lets get some expert analysis. That is a really good place to start given that we have seen a big selloff. Thank you for having me on this afternoon. Of thingsa couple that investors are grappling with. You have credit that will get worse from here to reflect the fact that unemployment is still high and we will see more businesses struggle with their viability. That will take place over the course of the next several quarters if not another year. Romaine we started the week where a lot of folks were pouring money into the indexes that track the financial stocks here. Do you think we could see a specific pullback in dividends . Dividends will be a function of bank ability the question of how much extra capital the feds have to have dennis scenario. This is after the cepheid cfo set at our conference they will be considering how much a dividend is the percentage of their preoperating budget. It is more likely that it comes down. We do believe they can pay the dividends. This will be a fed decision. I will find out at the same time everybody else finds out on june 25. What about some of the other bigger banks that are depended on Investment Banking . Amidst this world that we now live in. Is this something that will be sustainable . If we think about trading and higher volatility, it has benefited trading revenues. As volatility goes back down, that should fade. From here we progress in seasonal pattern meetings. Rounding that altogether, we think 20 20 looks like a pretty good trading revenue year for the companies we cover. On one hand you have the consumer. You said there could be some trouble ahead. What is the red herring . How big a problem could this be calm for the banks by the end of the year . Credit, think about there is another recession we are facing. This time we got a big smack in the face. Is not going to come through immediately. It will come through more slowly over time. We are expecting delinquencies and losses throughout the entire year. This has enabled banks to take these losses upfront probably faster than we would be able to in the old accounting standard. There is a positive to that. We think secondquarter recognition will be high. It could be a high water for the year. The therun through reality of that. Did the banks estimate successfully . I think they will be in the ballpark. Romaine we will have to leave it there. Just a quick programming note, and katie coke will look at the length of the economic recovery. You can catch that on wall at 6 00 p. M. Eastern time tonight. We will be back in a moment. This is bloomberg. Caroline a report made public yesterday found the cryptocurrencies could be operated like a ponzi scheme. This is all tied up with a very sad story. An extraordinary story. A founder died on his honeymoon in india. That is exactly right. Great reporting. Ago there was this collapse on the canadian exchange. A lot of questions about what happened. Now the government is saying there was all of this fraud inside the firm. Including ponzi scheme like behavior. This is not the first time this has happened in crypto. It is difficult to regulate. This is still a problem. It has probably gotten better over the years. But is is endemic to crypto. Ofaine we saw a lot traditional wall street analysts talking about bitcoin and its resilience. Are some corners of this industry that are definitely questionable. At the same time, you could make an argument that there is still some legitimacy there. Dont think it has been a great crisis for crypto are bitcoin. A bunch of young people have discovered the wonders of stock trading and how much fun and volatility you can get there. Caroline are you buying hertz or ripple . Hertz is so much cooler. It is a new day on this program. Look at that. Romaine i think that we will put that on the banner underneath your name. Great to have you. All of our viewers out there, if you missed all of the great interviews we had this week, you can curl up on the couch this weekend and listen to our podcast. You will find all that the best content. Caroline that is all from us. Bloomberg technology is up next year in the u. S. Romaine have a great weekend. This is bloomberg. Emily welcome to bloomberg technology. I am emily chang in san francisco. Markets rebounded today from the biggest drop in three months. This amid lingering concerns about rising unemployment and a resurgence of covid19 in different parts of the country. The cdc saying cities and states should be prepared to resume lockdown if cases surge dramatically. Meantime, social networks 10 you to fight so fight miss information about the disease and the le