dollars because they can't burrow. it is unusual but will persist as long as the short end of the market is a tough place to bro it romaine: you are hearing the closing bell here scarlet and joe. a good day if you look at it strictly have --did not even do even do half the retracement of yesterday. had morning, the futures gone red, so it looked like another down day. the uncertainty of the outcome of this crisis is so extreme that it kind of makes sense that one'slight variations in expectations could have huge swings just because the outcomes

are so wide in disparity. are bravehose who enough for dumb enough to time this market, we have not seen back to back gains since february 12. we have had this seesaw where we have this string of declines, then this rally, that it resumes the decline. scarlet: i am taking a look at the scope of the moves. when he 3%. almost a quarter of the members, 10% today. that sounds like a lot but yesterday, on a day in which the s&p declined 11%, two thirds of its members. not even close to what we had seen yesterday. the big movers are really in the defensive set ears. people ares if saying risk on and --

romaine: we are talking about the mechanisms of the market here. joe: the nasdaq up over 7%. some talk about some of these tech companies being popular because they are kind of the new staples. a lot of them have really good balance sheets. even a company like apple, which is exposed to so many risks, something to watch. havene: so many analysts -- the idea that you have this sort of work from home affect. no one really knows what a multiple can even be. you have no clarity on what this denominator can be until we get something more out of the cdc and health officials as to whether the number of cases is slowing.

scarlet: the earnings report will only tell us what happened in the previous three months. everything is a moving target. to that end, let's bring back our panelists. i want to ask matt a little bit about the small caps. citigroup had an interesting note today in which it said the value in u.s. small caps is merely an illusion. this is because small caps have been laggards of matter whether the market is rising or falling. if the broader market is declining, small caps fall even more. caps?s your take on small is there value or, even if there is, would you not go near it because it is all guesswork? >> exactly the latter. unless you really know the company and you know specific names and feel strongly they can

bounce back, you want to avoid these names. you talk about how some of these defensive names did well and some of these high-quality tech names. the whole market is getting clobbered. do you want to try to hit a grand slam by getting some small cap name, or do you want to buy a quality name like a microsoft where you can do a lot better with a lot less risk. joe: your view, if you wanted to take a risk, saying, i think they will get a deal or the actions various state and local governments are taking will show up soon. where might you think about underpriced risk? >> i would look at companies that are going to possibly even extend the leverage they are kind of getting now because of

this. people like amazon, whose online shopping is of you sleep picking fedexhave just seen numbers crossing and they are gaining after earnings. i think some companies like that. some of the really beaten-down issues. you guys were talking about mowing earlier. there is no way the federal government let's a company like boeing go by the wayside. inre are certain industries certain places, perhaps even some of the other airlines threatening to be downgraded into junk. they are really crucial to business and transportation in the u.s. down,en they get beaten you're going to look at something long term. romaine: fedex out with earnings right now. shares down about 41% over the

past few weeks. adjusted eps and revenue numbers. is company is saying it suspending its fiscal 2020 outlook due to the covid-19 uncertainty. i am not sure how much fundamental matters. it is primarily trading of fear and speculation to a certain extent. what they perceive for this year and next. , at least provide a little bit of stability as people have a handle on what to expect rather than trading off a complete unknown. >> there is so much uncertainty.

there is no way to know. that is why going out the risk scale is difficult. having said that, you just mentioned boeing. i was looking at the chart before i came over here. the relative strength index, by far the most oversold it ever can be. they are not going out of business. will you lose money tomorrow in the stock? maybe you will. but there are opportunities. the market is a little bit lower, fired more and play that game rather than trying to hit the bottom. joe: rather than going for a grand slam homerun with small caps, by a name like boeing, close your eyes, go to the beach, and check in in a few years. you don't want to fly anywhere right now.

>> i am from boston. tom brady is leaving. joe: even tom brady is getting out of there. romaine: how are you holding up? matt: thank god i am in a new building that does not have windows that open. scarlet: i want to follow up with a question about volume. people saying it is too volatile, you don't want to get caught offside. how long will we see volatility drop? four will that happen as long as somebody is benefiting from the swings. matt: even though things have gotten incredibly more compressed. 350 days. is you need happens a multi-day or usually multi

week rally that fails. that is when human nature says it is all over, that the market rolls over another time and they are out. that is when you see the volume dry up. usually want to get that until we get a multi-day rally. joe: they give you hope, they make you feel like they are smart, then they make you feel like they are stupid. we may need one less washout so that any confidence, good feelings is completely washed out. afraid that is probably the case. scarlet: what do you think? is that your take?

>> i totally agree. things that the markets are overlooking, number one, retail february, which did not have much of the impact. whatever the fed is doing, it is doing it for liquidity for the banks. this really is not helicopter money in a real sense. markets liking at least that they are going to get to a place on that. this is a once again -- a head fake for the markets. until we do really test the downside, we have more to go. , if you really want to step in, look at the places -- boeing sold off.

i agree completely. there are other places as well come where you can get in and not feel as though you are still underwater. romaine: thank god it's friday. joe: it is only thursday right? oe: our thanks to vince cignarella and matt maley. this is bloomberg. ♪

romaine: life from bloomberg world headquarters in new york. scarlet: if you look at the markets day, we were down 11, 12%, today we are up 6%, 5%. membershe s&p 500's rose more than 10%. yesterday, we had two thirds following more than 10%. joe: did you look at the lines before? scarlet: here is the last three days. let's click on that just to show you. there you go. romaine: obviously, it is easy to get the percentages mixed up over the last few days. you look at where we are in equities. joe, you brought up what we saw in the treasury market. starting to see money coming out of that. thet 50 basis points on

two-year yield. we should also point out the dollar had a monster day. index, up 1.38%. high on that basket. enthusiasm so far about what the fed is done. that does not necessarily mean that the fed is out of tools. let's bring in the director of research and analysis at employee america. he is calling for the federal reserve to do a lot more, including muni bond purchases. it is cut rates to basically zero. toannounced it is going expand the balance sheet by

assets split between treasuries and mortgage backed securities. something that the fed concurrently do now within its existing legal mandates. why don't you tell us further what they can do. >> thank you for having me on. the fed has the power to buy short-term state and government debt. anything with a maturity of less than six months, the fed can buy. unlike some of the action they did today, it does not have to go through treasury to do it. on the front lines of crisis,k health loosening up the finance options .

romaine: we did see some of those spreads widening. fed wereering, if the to go down this path, what would be the threshold for them to try to make those purchases? >> we have seen fixed income liquidity seriously deteriorate overly past week. , spreadshe muni market have widened relative to treasuries. if you think of this from the standpoint of a state and local government primarily cash constrained, they will look at spending cuts. certainseen signs that state governments and the d.c. government is considering spending elsewhere to respond because ultimately they rely on tax revenue to fund all of their operations, or most of their

expenditures. this is not a banking crisis. i think state and local governments make a lot more sense. scarlet: what would you think of extending the fed's mandate so that it buys other assets. people have been talking about maybe equities the way that bank of japan buys equities through etf's. >> i think i was focused on the crisis at hand. what will actually trigger more spending and get money into the right entities' hands quickly. i think it is pretty logical in this case and the fed has the legal authority. for ally making it easier state to issue short-term debt that is pretty cheap and affordable. equities and corporate credit, i

where,hose are areas one, what is it going to do to solve the problem, and two, they don't have the authority to do that right now. i would prefer actions for those who are most in need of the funding and would do the most good in responding. fed buys the treasuries or government backstop securities, they are liability,rading one reserves, for another risk-free liability, treasuries. even at the short end of the pond curve, there is the introduction of credit risk, right? state and minas abilities cannot print money so theoretically, they can go broke. talk to us about why you're reading is that the federal reserve does have the ability to

take that risk, and is there a limiting factor on how much state and local authorities could issue. >> the statute is incredibly clear that the fed has the authority to buy these securities. there is in some ways a credit risk to the government. the question here is whether municipal debt, which i don't think we should call for them to be actively engaged all the time, but in a public health crisis, is this the time we should be trying to encourage arbitrary pennypinching? i would say no. asaine: coming up here, market volatility continues, etf volume is spiking. we will discuss that next. this is bloomberg. ♪

scarlet: markets have been moving wildly all week with etf's in the center of the action. on the phone, senior analyst at bloomberg intelligence. clearly, the volume we see in etf trading's through the roof, which is what you would expect. it, how muchth of heavier volume can be. different people keep maligning etf's as kind of driving some of the wilder swings. what is your take? lean pro etf. i think they absorb a lot of liquidity. when they trade away from the net asset value, i think that is something you have to keep an

eye on. that points to how illiquid certain areas can get. if you are somebody who is in the market, you could sell the bonds, by the etf, and pocket the difference. a lot of people would not do that, waiting for the etf to go a little bit cheaper. i think when you see some of these, it speaks to how it -- how illiquid it is. high-yieldtalk about bond etf's. this is a recurring fear in other markets as well. etf tradesigh-yield as liquid as the stock, but there is no way its underlying assets can trade that much because the high-yield credit market is just not as liquid. during times of stress like we have seen over the past couple of weeks, how well have these

performed as far as we can tell maintaining a link between the pricing of the etf and underlying basket? >> this is a great point and it is frequently called the liquidity mismatch. how could you have something that trades an exchange -- a lot of the bonds do not even trade every day. better than most expected. discounts the the past couple of days, around 1% or lower. member, the junk bonds have a duration of about three years. curve,u went outside the some of it got worse. the past couple of days. i do think this is part of the reason that we give some of the certain etf's the yellow light in our traffic light system. junk bonds, it is a risk asset.

to auate a junk-bond etf boating house on the beachfront in florida. it has a lot of benefits but you had better expect the occasional hurricane. scarlet: explain how investors use this and other high-yield etf's. active investors are very much the holders of these. when they sell out of them, they so-calledthem as a liquidity sleeve. the lot of the reason for discounts we have seen the past two weeks is active mutual funds will hold a lot of these etf's. havewill hold hyg, maybe 3% of the portfolio allocated instead of cash. that way they have something liquid they can sell in a flash.

if anybody mutual fund has had any redemptions whatsoever, it is likely that the first thing they sold was the etf. it looks like they are continuing to choose the etf for now. at some point, the etf could have a discount that is great enough for the bonds to begin to sell. active mutual funds, the outflows, that would equal more selling pressure on some of the font etf's. romaine: a lot of eyes on the s&p with a lot of the limit up sand downs. what are we seeing with regards to flows, and what does that tell us? >> the flows are all over the place. that could be people creating new shares just to short it. i want to note some good news, the volume which, to me, is like a fear gauge, down for the fourth straight day.

romaine: our thanks. this is bloomberg. ♪

with i'm mark crumpton bloomberg first word news. the senate is expected to take up the house's coronavirus relief package but it comes as the white house asks for a sweeping emergency stimulus package to help business and taxpayers cope with the fallout. as he opened the senate today, majority leader mitch mcconnell promised swift action. >> it is almost impossible to exaggerate the pace of change over the past weeks and days. but americans are strong. we are resilient. ais is a proud nation with world changing history. and we have come through far

greater challenges than this. this is not a time for fear or panic. if your house is on fire, the worst thing -- the first thing you worry about is not smoke damage to the roof. you try to put out the fire. this is what our proposal does. it means first and foremost, we work to address the coronavirus itself and the people most impacted. new proposal of sick pay, emergency food aid, and virus testing was approved over the weekend and is pending before the senate. china will effectively expel a group of american journalists and private them from relocating the work in hong kong or macao as the dispute over media access expands. china's foreign ministry said today that some reporters at the

new york times and washington post must hand in their media cards within 10 days. china says it is a response to caps on media. the two countries remain tangled in a trade war despite a recent truce and have traded angry words over the coronavirus pandemic that emerged in china and has spread worldwide. iran is stepping up pressure on its citizens to stay home and avoid unnecessary travel. iranian state tv says millions could die if public keeps ignoring health guidance. the warning came hours after hardline shiite faithful's pushed their way into the courtyard of two major shrines that had been closed over fears of the virus. they have had nearly 1000 people who have died. 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. i'm mark crumpton.

this is bloomberg. joe: the coronavirus and the oil price war between the russians and saudi's has disrupted global commodities, plus left a lasting impact on food supply chains. joining us with more, the founder and ceo of grow intelligence, who has analyzed the ripple effects. food, as anyone knows, is a source of deep anxiety. we see it in the grocery stores. it strikes existential terror, the thought that if you go to the grocery store, it would not be there. from your perspective, how robust and sturdy are the supply chains we have right now for food? >> the supply chains have never been more fragile due to a combination of things. shipping flows being

disrupted as a result of coronavirus. you have supply constraints starting to emerge because of fordemand patterns consumers started to change in terms of how they are purchasing in supermarkets as different cities go into lockdown mode. the average home is purchasing way more food than it does on an average day or week. managing the supply chain of what is needed right now and then what happens over the next 4, 6, eight weeks in terms of demand planning, it has never inn more complicated, even what used to be the most transparent market in the world. we talk about the complexity of the market, a big part of that market has been that interchange from country to country and the idea that we can

sort of move around that food supply based on which countries demanded which part of that chain they wanted. given the trade issues and issues with coronavirus, are we seeing disruptions in that flow that could end up distorting how we assess what is available and ready? seeing massive distortions already. you initially saw a lot less shipments going into china and parts of asia. when you look at shipping flows out of major exporters such as argentina, youl, are basically seeing a massive backlog of essentially ships waiting to depart. the flows have been massively reduced. a lot of countries are basically just tapping into inventory to replenish that sort of supply. that obviously works for things

like grains and products you can store, but that is not how fresh produce works. areas like protein, fresh produce, you are seeing immediate price reactions. what is going to be interesting to see as this plays out is when these bottlenecks start being removed, do countries start thinking of inventory of food in a fundamentally different way after this? and, how does that start to impact the decisions that are going to be made by farmers in places like the u.s., that are being forced to make decisions at a very difficult time for them personally because balance sheets are just very weak. so lots of uncertainty. scarlet: these are all great points. i want to get into what you set about tapping into inventory. do we know whether farms and meat processing plants have

enough people to even do the work as they are trying to replenish their inventory? we know the labor market was already pretty tight before the virus it. >> if you think of farming, farming is moved to a largely automated world in terms of farming for crops years ago, and you see more and more automation. a lot of that does not kick in until now. a lot of is farmers are having to decide what to plant. industry,produce obviously that is a different question. requireda lot of labor for harvesting. you also have certain produce that gets shipped seasonally from parts of south america. i think what is going to happen and what you are starting to see play out, in supermarkets, there is a lot of frozen food being

bought. there is a little bit of that interplay occurring. as that supply gets drained from chain, it will start to be relatively complicated set of issues to manage because how do you have social distancing while harvesting? there are fundamental things you will have to address. joe: looking forward a little bit, we have this sort of unprecedented crisis, this hoarding in the u.s., people going to the supermarket. all sort of ripple effects. as you mentioned, the supply chain issues in the era of social distancing, then we might to stimulus as they try revive their economy after the worst has passed. could we see for the first time in a long time potentially

meaningful inflation on the food front if you have this combination of supply chain disruption and major eat expectations of ramping up economic growth. >> that is one of my deepest fears globally, is that it is not just economic stimulus, but the reality that as this is a global crisis, when you start to think about the distribution of food around the world, and the other shocks that other parts of the world are facing, so locusts pakistan,n africa and you are also having a destruction of supply happening. of in these types unprecedented moves, you are also having very large foreign-exchange moves that create massive foreign-exchange issues, that can cause hyperinflation. even without really a demand

surge occurring, you could already start to see some of that play out sooner than later. it could be very worrisome because you could also be undersupplied. enker givenness a lot to think about. thank you so much. let's give you a check of some business flash headlines. marriott is starting to lay off tens of thousands of employees. marriott is closing some hotels and using fewer workers at the ones that remain open. in the u.s., the company has about 130,000 staffers. but -- nbaround old games are on hold but we have learned of the teams are still getting payments from its broadcasting partners. notbroadcaster, espn, did say whether it was making the payments but did say issues could be discussed.

movie theaters closing all of their locations starting today. amc says it's movie halls will be closed for 6-12 weeks. regal says theaters will be shut indefinitely. from new york, this is bloomberg. ♪

♪ romaine: investors around the world trying to figure out the economic fallout from the

coronavirus. --ine searching to very search activity surging in their other metrics investors are relying on to get a sense of what is happening. on the phone, arbor research and trading data scientist. thanks for joining us. it is going to be weeks before we get some real, hard data from the traditional economic measures we rely on for gdp. durable goods and others, that will capture this period we are in now. what are some of the other metrics, the high-frequency metrics that folks are turning to come in to get a sense of how the economy has been effected. >> we are taking advantage of consumers and businesses search activity via google and really trying to measure this in two different ways. one being the psychology and spread of the virus. also, we are looking at consumer activity.

how much people are going out to restaurants, to going to the trampoline park, to looking at new real estate. we are trying to get a flavor on a day-to-day basis, how much consumers are seeing that sudden stop and how much they are concerned about the spread of the virus. scarlet: what have you seen that really surprised you? >> what we expect is happening. on the one side, this is good, that we are getting the quarantine and social distancing. will be have seen a lot of search activity stop abruptly for going out. everything from traveling, urban transport like uber, restaurants. the unfortunate thing we are seeing is it has been so strong, housing is looking like it could be under pressure. searches for real estate

listings, home-improvement property inspections, those have dropped almost as much as a lot of these other travel related, going out-related search activity. for us, this is a sign that the consumer is getting this. and what could be this important industry is potentially going to be damaged. timeit has been a long since i have heard of anyone buying anything other than soap, hand sanitizer, canned goods? what about other things. is anyone looking for, say, a pair of jordans right now? --jamin: everything everything like businesses purchasing software, on the discretionary side, buying things are looking at new equipment. jim's.

these things are seeing precipitous drops that we have not seen historically in this data set that goes back to 2004. it is something that has not been seen since this period of 2004. on the flipside, we have seen dramatic rises in search activity for outsourcing and, in particular, for medical devices. this is another sticking point and issue that the u.s. will have to go through. n95 ventilators and respirators, there is a community, especially verbal, making especially rural search activity for these goods. we are getting signs of difficulty in the health care supply chain.

joe: when the sudden stop started and the speed of the decline, how does it compare to anything you have seen since you have collected the data set? benjamin: let's go back five weeks to where italy had their first rash of cases. they are kind of the first case here. fordrop in search activity consumer goods and services, that really has dropped to the point that it is on par with three times the drop compared to the typical august drop in activity. somewhat of a hibernation. and the rest of europe, we have seen the same thing happened on almost a two-week lag. the u.s. social distancing and , march consumer activity 10 or march 12 right around when

activity really got into trouble. ltz,let: benjamin breitho data scientist, thank you so much. really interesting observations, giving us into a -- giving us a economic data. we want to give you some headlines from jeffrey gundlach's webcast. he made some comments, saying this is the end of the longest postwar expansion. he put the odds of recession at 90%. stimulus under discussion, he said, could be prone to abuse. he also said the stock market is in a world of hurt. jeff gundlach is currently talking about gold, saying that precious metal could hit a new high. whiche a look at apple, says that stores outside of china will remain closed until

further notice. it is no longer holding to the opening. this depends on what rules local governments put in place by that time. amazon giving priority to shipping household staples and medical supplies. the world's largest online retailer has been struggling to deal with demand. amazon will not accept shipments from third-party sellers in other product categories at least through april 5. elon musk is signaling that tesla's auto plant in california will remain open. he is telling employees to come to work only if they are comfortable in doing so. whetherot said employees who do not come in will still get paid. romaine: some breaking news from the new york stock exchange. the company says they have no current plans to shorten the trading day. this is coming in and email.

basically saying they have been in dialogue with regulators. this was a reference earlier to steve mnuchin comments that they would potentially consider a shortened trading day. this is bloomberg. ♪

scarlet: olympic organizers remain confident that the tokyo games will continue as planned. sharp declines in revenue on account of a lack of life sports to bet on. let's bring in evan novi williams, bloomberg sports reporter. everyone is watching to see what happens. we know they have made some adjustments but so far, the guys in tokyo, prime minister shinzo fc, remainhe i committed to holding the games. >> we have seen two fairly big development. recognized publicly

that things might get difficult. after weeks of essentially plugging their years and saying these games will happen as planned, the ioc at least today recognized that things are in a fluid situation, we are looking at it day by day, for now we would like to get them in, but that will not happen if things continue to get worse. romaine: i wonder how they will address the player aspect. there was news that four players on the brooklyn nets nba team tested positive. you have a lot of sports where there is no social distancing. you have to be in physical contact with the other people on the court or the field. have they addressed how this may play out over the next few months? eben: this is the big question. comingrd donald trump

yesterday. that is every sporting event ever. even these small olympic everyones and trials, is looking at that. when it comes to the olympics specifically, i think everyone's eyes are on the games themselves. aretruth is that there hundreds and hundreds of qualifiers that has to happen before you pick your teams. those events were supposed to happen now, next week, next month. all of those are getting disrupted as well. there are a lot of people hurting these days but one group that is really hurting our people who are gambling junkies and looking for something to place a bet on. the casinos are closed. done to ease the pain of people who just must get some action?

eben: two things. sports betting operators are scouring every lower level professional sport across the globe to see if they can reliably post odds. this is kazakhstan premier league soccer, ukrainian soccer. joe: oh, yeah. the real junkies are betting on that. eben: they want to get anything on their website. the second thing, they are looking at potential non-sporting events. draft kings and fan dual recently did daily fantasy events around the debate. odds around whether bernie sanders would say millionaire or billionaire first. if they can do gambling on events like that, that can bridge the gap to when you e-sports are back. scarlet: eben novy-williams

bloomberg news sports reporter. another thing they could bet on, where tom brady will land. technology"oomberg is next in the u.s. this is bloomberg. ♪

emily: welcome to a special edition of bloomberg television, "markets uproar." i'm coming to you from the san francisco area where i am sheltered in place. orders that we not leave our home amid this coronavirus outbreak in the interest of public safety. bear with us as we bring you the news as best we can. first, i want to