Ont that we had crude down the day. A little bit of a disconnect, scarlet. Scarlet that is a good point. Energy stocks up 10 on the day. The next best performing group is financials. If you look at it on a five day basis for the week, energy and financials are among the laggards here. Forget what happened in the first quarter. Forget what they are saying about the Second Quarter. End, i wonder what that really tells us about. Again, i think that what we are dealing with here, and what i was trying to say when the bell rang, we are dealing with the cash flow issue. It comes down to how long the economy is in suspended emanation. If this is a short but deep recession, things will come back online towards the end of the year. Programsus stimulus will help keep consumers and businesses afloat so they can get back up and running relatively quickly. But the risk is that we deal with multiple waves of infections or a downturn that lasts longer than we are expecting. Romaine i want to bring our viewers a little news crossing the wire. Macys exploring ways to use its real estate assets to secure cash to ride out the coronavirus. This according to people with knowledge of the situation. They are looking to use real estate assets to shore up their financing and liquidity. Reporting says that this does not include the Herald Square property in new york, which is the crown jewel of the macys empire. David, we are obviously getting a lot of stories like this, Companies Looking for ways to make sure they have the cash and liquidity to get through this crisis. Helped backstop will be of to quite a few of these companies. Are you confident that even though we are heading towards a recession, where Consumer Spending will likely contract heavily, these companies will at least be in a position where we can avoid a mass credit event in this market . David i do think there will be sufficient backstops and liquidity to prevent this from escalating into a solvency issue and a financial crisis. Every client that ive been speaking with asks the question of how is this different from 2008, and putting the major issues aside of it being housing driven and the things banks being overleveraged, the system today is far more stable. When we look at capital ratios at banks, when we look at the steps that have been taken to mitigate risks, i think there are plenty of backstops available. Believer that when everybody has an eye on something, that is rarely where the problem materializes. The fed seem to be of the view that shooting first and asking questions later makes the most sense. Assuming this doesnt get drawn it into the end of 2021, does not evolve into a broader financial crisis. Scarlet the fed must be seeing something that it likes. Fed that it ishe dialing down its treasury purchases to 15 billion a day. A few weeks ago an announcement like that would have sent the market lower. Today it barely barged. That is good news, right, david . David i think it is good news. I would caution everyone that the fed has basically been buying two times the treasuries net issuance. Im not sure investors were looking for them to do more. I still think this is a policy driven market. The fed has done a lot. At least for the time being, what you see is what you get. The policy response being in the Rearview Mirror and the number of cases showing signs of rolling over, the focus is going to shift more towards the fundamentals. For that downside, is there anyway you could put some idea weve heard from other strategists and investors who have relatively dour outlooks for how low the s p might have to go. David im not sure that im in the camp that we will retest lows of prior cycles, but i think there is some downside from current levels. If you are expecting about 140 , share on earnings this year and you kind of think back to what multiple seems to be the point at which investors sider equities attractive the rewriting weve seen over the past few days has pushed the multiple up. Themselvestive to are now looking expensive. If the Economic Data makes people uncomfortable, you could easily see a 13 or 14 handle on the s p. You think about that in the context of earnings and you are looking at something in the 2200 to 2300 range. Good to heard, so from you. David is the Global Market strategist at jp morgan. That does it for the closing bell. Whatd you miss . Is coming up next where we look at how restaurants could be a luxury good. We will discuss what it looks like when the economy does start to reopen. This is bloomberg. Romaine good afternoon. Broadcasting to our viewers worldwide, im romaine bostick. This is whatd you miss . Scarlet lets get you a snapshot of how u. S. Stocks closed on the day and on the week. 1. 9 up forng at the dow, 1. 7 gain for the s p 500, and the second straight week of gains as well. Days after declaring total authority over states, the president is telling state governors it is their decision over when and how to reopen the economy. He recently unveiled general guidelines. But left all the critical questions unanswered. Lets bring in josh. Im looking at a headline that just crossed about illinois governor. Sounds like the governors have a call and they are deliberating and making their decisions. Now have states begun to do that President Trump has punted the decision to them . Weve seen some states start to move today to perhaps relax things somewhat. Weekresident began the trying to get states to do what he wanted, and yesterday, his roadmap, if you want to call it that, left some of the decisions to states. We dont know whether a tie goes to the runner when it comes to opening or not. I guess the governor will get the blame if things go wrong. So hes really going back and forth. Romaine i mean it is in the governors hands, that is what the governors wanted, and i guess we are at the stage where we wait on them. As far as the federal government and what they can do, it is sort of a deal with the relief packages and potential additional money to those relief packages. Program ranusiness out of money very quickly. Any sense from the white house or washington that they are going to increase the amount of money that goes into that program . It is probably still days away. Kevin mccarthy in the house offered a bit of an olive branch today by saying hes ok with hospital funding being rolled into that. Changes tolso want that Small Business program. They say the smallest Small Businesses are getting boxed out by the bigger Small Businesses. The talks are continuing. It seems like they are moving in the right direction, but ublicans are seeing inrlet back to bickering washington, what a surprise. Another thing the president is doing is encouraging antishutdown protests. Can you tell us more about that . We have seen conservative groups advocating against certain restrictions in minnesota, in michigan, and in virginia. All those states have democratic governors. Michigan and minnesota are swing states. Arguably the biggest swing state. Trump is encouraging these protests against democratic governors, stirring the pot. Governor is a rumored Vice President ial running mate of joe biden. So the president is taking the time to stir the pot. Giving usosh wingrove that update there. Have a great weekend. Coming up a little bit later, we are going to talk about the highyield market. We are going to hear from the Credit Finance group at Goldman Sachs on why issuance will continue to increase. We will be back in a moment. From new york, this is bloomberg. Fedlet with the backstopping the market, more companies are looking to test investors appetite. Withoke exclusively christina, Goldman Sachs cohead of Leveraged Finance for the americas. I think our clients are relieved to see the Capital Markets functioning as they are. They continue to focus on making sure they have adequate liquidity to continue to finance their businesses. To say thely pleased leverage loan market is also showing signs of life. What do they have to look at Going Forward . Is it all things go right now . Or are there still concerns in the coming weeks . Think you are going to see a lot of issuance. The last couple weeks have been very strong. The investmentgrade market has seen 430 million of issuance. Are goingield market to likely be higher than 23 billion. The convertible and equity linked markets are over 22 billion. I think the case of the highyield is going to continue. We have earnings season, so you might see some folks in blackout. Even with the resilience we are seeing in the public market, i believe Companies Continue to be very concerned about the possibility that the recovery could be slower and that they need to shore up. Lets get more on that point. We are hearing some private equity firms talking about a longer you shape. What are you and your clients taking a look at . I think you are well aware of the Goldman Sachs view for a sharp decline in the Second Quarter with a recovery in the back half. That being said, it is only a 50 recovery year to date. Hopefulour clients are that we are going to have a strong recovery, but depending on sectors, very conservatively thinking through when their business will be up and running at full steam, and i applaud all of them for being quite forervative, planning potentially a slower recovery. But i think everyone is optimistic, particularly with Capital Markets being as open as they are. What are your clients looking at here . Youve been doing so many deals. Deals thate kinds of are able to make it to market, given weve seen ones like spirit, travel, entertainment, starting to access highyield . I think they are looking at started that the crisis and the Capital Markets were effectively frozen. We absolutely supported our clients. Now that we have a functioning Capital Market across equity and debt, i think they are basically saying, we are hopeful that the recovery will be quick, but we are not certain. Transactions that weve been involved with involved not only highyield debt, but also convertible. On the highyield side, weve been involved in transactions that have come to market, but many of those clients are making sure they get maximum dollars. Romaine you were just listening to our exclusive interview with Christina Minnis at Goldman Sachs. Lets turn back to the covid19 crisis. Are an95 masks, if you Health Care Worker or first responder, these are the masks a lot of those folks depend on. Masks, isker of those now suing the middlemen who sell those masks, claiming that some are inflating the prices. Joining us now, susan decker. Great to hear from you. Explain to me exactly why 3m needed to essentially sue the people who are selling the masks. 3m has been very vocal about the fact that they say, we are not trying to profit over this, only charging usual rates. These were companies that had one to new york city and one to california, charginge have masks, over what 3m was charging and calling themselves authorized distributors. 3m said, they are not affiliated with us, this is a trademark infringement, and they filed a lawsuit against them. All that,aving said what can be done . What can states do about it . States cant do a whole lot. They are the ones in these bidding wars. There have been calls to say [inaudible] but in fact, the argument the government needs to step in and have some sort of uniform supply chain so states arent going to be the victims of price gouging. Scarlet i think weve lost the there on susan decker joining us on 3m trying to do its part on fighting price gouging. Lets get you some business flash headlines. Pngterly sales rose 6 at because the coronavirus outbreak led to panic buying. We are talking about the Family Care Division seeing a doubledigit gain. It includes charmin toilet paper and bounty paper towels. You cant watch the nba playoffs this season for now. We have the next best thing, which is michael jordan. Airing a begin fivepart documentary on jordan and the chicago bulls. Ands a gritty look at mj some of the dark sides of superstardom. Espn was scheduled to air it in june, but the end of the nba season changed its plans. And shares of peloton closing lower. The Trump Administration has said that jims can be part of the first stage of reopening. Demandve been in high since lockdown began. Delivery time has climbed to between four and seven weeks. That is your business flash update. Coming up, we are going to take a look at the conversation about why debt standstill is needed for emergingmarket nations. We are discussing this with the managing director who wrote an ad with george soros. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] romaine all right, the covid19 pandemic is a financial punch for developing economies. Those are the words of our next guest, part of a growing chorus of folks calling for debt relief to fight the coronavirus pandemic. Chris, managing director rights, developing countries must be allowed to defer Debt Service Payments to all International Creditors for at least one year. Chris, glad that you are taking time to join us. When i saw your column, it was very intriguing. My next thought was, is there really a mechanism to pull off Something Like this, when bondholders have such a grip on the market . This isnt the environment where you can just assemble a group of bankers and get this done, is it . It is not. Just about everything we are doing is ad hoc. All the mechanisms we normally have are overwhelmed. That is why george soros and i are calling on the official sector to take the first move, use some of the mechanisms that process,to initiate a but understand that this is going to take coordination of really heroic proportions, but the circumstances demand that. Oped, you also say this should be a oneoff Debt Forgiveness for one year and that gives everyone time to work things out on a more permanent basis. How can we avoid Something Like this from setting a precedent . Past crises have shown it is hard to move past a credit event once a precedent is set. Could this backfire in the future for the very nations it is intended to help . Morethink ironically the countries participate in this kind of standstill, the less of a precedent it will set. It will be clear that this is not a response to poor financial management, but rather a response to this global pandemic, which has nothing to do with the creditworthiness of these countries. Wide set ofet a countries, including the very poorest, then i think we can avoid setting a precedent. Much of what we are experiencing now is unprecedented and i would like to think that three to five years from now we look back and say that any particular country that didnt pay its debt, it was perfectly existing precedents. This is the way the latin american debt crisis was managed. The Financial Markets survived. These countries retained access to the Financial Markets. Romaine with regards to how we pull this off, talking about all debt, including local currency debt or dollardenominated debt, or is there a need to make a distinction . There is a very important need to make a distinction and we are simply referring to international dollardenominated debt. Local currency debt is not just a way governments are. It is the lifeblood of systems. If we ask governments around the world to do what they need to do to help address this global problem, then we have to give them as much fiscal space to do that and making sure we dont disrupt local Financial Markets is a critical part of that. That is why we make a clear distinction between International Debt and local debt. Scarlet and you are talking about private lenders and official lenders working together. How could private investors be persuaded to participate, agree to debt relief, especially given the type of investors who are investing in the debt of developing nations . In a game of chicken, they usually win because they have the resources and time to hold out for payments and their specialty is distressed investing. True for somet is private investors. But these are not normal times. I think theres a much greater chance that a large share of private investors will soon see that they are much better off being part of a coordinated debt standstill that lasts for 12 to 18 months rather than having to deal with a wave of defaults that could happen otherwise. That doesnt mean there wont be small investors who try to take advantage of the situation, but given that all of these small fighting overl be is 18 months of Interest Payments and slightly delayed this is notpayment, argentina. The stakes are different and i isntthe financial upside there. Scarlet got it. Appreciate you joining us today. Lets head over to mark crumpton. Mark President Trump siding with americans in some states protesting stayathome orders. The president tweeted urging minnesota, michigan, and virginia to liberate themselves in apparent criticism of stayathome orders in the democrat led states. Trump made the comments in a series of tweets less than 24 hours after a plan that deferred heavily to governors to determine when they could safely reopen their states amid the coronavirus outbreak. The president s former lawyer