pm johnson: we must act like a wartime government and do whatever it takes to support our economy. alix: the u.k. lays out a $424 billion package. the u.s. targets $1.2 trillion. banks keep liquidity flowing. theal bond yields surge as build for fiscal stimulus might come from issuance. no visibility. fedex scraps guidance as the virus trims business in the west , while global car companies shut down operations. welcome to "bloomberg daybreak" on this wednesday, march 18. i'm alix steel. it is an unbelievable move we have seen in the bond market. i can't emphasize this enough. the 10 year yield is up by four points. the fact that we are over 1%, when last week we were down to 50 basis points.

the moves in europe have been tremendous. a 58 basis point move upwards for the 10 year in italy. moves.re huge a big selloff in the bond market is not going to make the equity markets happy. you have limit down at one point for s&p futures. the dollar keeps performing higher and higher. at some point, that is going to wind up crimping the global economy as well. to wrap it all into a neat bow, you have crude, the bottom falling out for that market. goldman says they see brent coming to $20. time now for global exchange. we are going to bring you today's market moving news from all around the world. from washington to new york, brussels, and london, our bloomberg voices are on the ground with this. morning's top stories. . the trump administration has promised a 1.2 trillion dollar stimulus package, including to americans. joining us is kevin cirilli.

where are we in getting this done? kevin: within the next week, i am told by sources. the president hasn't injected the treasury secretary steven mnuchin to work with congress -- the president has instructed treasury secretary steven mnuchin to work with congress to make this move as quickly as possible. on capitol hill, the senate still very much trying to work to get that original economic stimulus bill across the finish line. remember, that would provide free coronavirus testing, as well as two weeks of paid sick leave. it has hit political hurdles because of an amendment introduced by kentucky senator rand paul. however, i am told that hurdle will be cleared within the next 24 hours. lawmakers working virtually around-the-clock. hasissue of partisanship largely been cleared, as republicans and democrats seemingly recognize the urgency in which americans are needing

there to be some economic relief. former vice president joe biden had a strong night in the primaries last evening, securing significant wins, including in the battleground state of florida. a lot of questions as to how long senator bernie sanders can continue onward, especially as the nation grapples with the impact of the global pandemic. alix: thank you very much. now i want to turn to the fed, which launched two emergency lending programs to keep credit flowing in the economy and alleviate strains in financial markets. here was more is michael mckee. i feel like it is the kitchen sink plus more. michael: all of the kitchen utensils they kept under the stairs in a box, alix, they are pulling them out. as more companies are closing up or make plans to do so, cash is going to stop flowing through the economy, and that could lead to a health crisis becoming

a financial crisis. many companies issue short-term fundrcial paper, ious to their accounts payable and payroll, things like that. in recent days, they found it harder to find buyers as money market funds hold onto cash because they needed for redemption. the fed is establishing a special purpose vehicle to keep it off the fed's books that will accept commercial paper. the fed is funding it, however, and that is backstopped by a $10 billion treasury guarantee, an insurance policy so the fed doesn't lose money. they will pay about 200 basis points plus the fed funds rate at the time, so this morning, the rate is about 240 basis points. last night, the fed opened a lending program for primary dealers, those who deal directly with the fed, similar to the

discount window for banks so they can always get funding. they can get funding for 90 days at the discount rate, same for banks, collateralized by a wide range of securities you can take. investment grade paper, treasuries, commercial paper, munis, asset-backed securities, mortgage backed securities, even equities through the fed, and they will hold onto it as collateral. ,he fed also announcing somebody programs going by here, that they are going to do double the number of repos, twice a day now. they are not taking it up i that much, but it is reassuring the market. alix: thank you very much. now i want to go to europe, where european union leaders have agreed to shut down borders and restrict most travel into th continent. angela merkel says she won't

rule out the possibility of combined eu debt issuance. with as is maria tadeo. european leaders taking even more steps to contain the virus. what is interesting on an economic measure is the fact that angela merkel didn't rule out the idea that she could look into what would be a euro bond, and issued debt. rule it that she didn't out had a lot of people on the market excited, but it also signaled that perhaps the recession to come will really be that deep, to the extent that even the germans are considering these measures. we are still seeing numbers climb. spain has reported more than 1300 cases today. we are waiting to get the latest data out of italy, where cases continue to increase. everyone is desperate to see

ins curve finally peak italy, which has really borne the brunt of the coronavirus so far. alix: in the market, bonds are tanking globally to fight the virus. as european sovereign bonds lead the rout. dani burger joins us now. these are unreal moves we have been seeing. dani: astonishing whiplash that market players are contending with. we really want to think about this in the binary terms. there's global turmoil, so people are going to be buying bonds, buying haven assets. that's not how they are behaving. leading the pack lower our european sovereign bonds. the u.k. unveiling a massive stimulus plan. it is incredible watching the yield on these bonds, btp's, bunds surging today. fear is the debt

day louche that it's going to hit mark -- the debt delu h=ge that is going to hit markets -- the debt day lodz -- the debt deluge that is going to hit markets. as soon as europe came online, we saw u.s. futures hit their limit down. another day of u.s. futures hitting a limit. we are almost becoming desensitized to these moves. does 3% or 4% up or down mean the same thing anymore? it should, because things can certainly get worse from here. we have seen volatility continue to skyrocket. we might have what is called a volatility doom loop. . it certainly sounds ominous. what occurs is we have the turmoil in markets that means post realized an implied volatility skyrocket. you get a whole swathe of

market players saying these are hitting my risk limits, and now i need to step back from markets, or even worse, sell what i already own. that can contribute to the volatility, so that might be part of the cause. more than anything, we are getting these periods of liquidity blackout, which allows markets to be punched around and hit their limit down movements as soon as europe, for example, comes online. alix: really great roundup. wonderful perspective, dani burger. italy's 10 year yield is up by 41 basis points. fedex suspending its financial forecast and latest earnings report because of blurred demand outlook. annmarie hordern has more. lots of companies entrenching here. annmarie: it seems like no single company is spared from the impact of the pandemic on their bottom line. fedex beat, but they are suspending their financial forecast. this bike the fact that we have europe shutting down, there is a bit of a silver lining for

fedex. china is starting to lift up. last week, they saw planes go in and out like normally they would see in any other week, but you can see we are down in premarket trading on fedex. bmw overnight trading down nearly 6%. theiray they are banning hopes for another record year. b&w also taking a bit of a different stance then we saw from daimler. they are not shutting production sites just yet. they are having a little bit more flexibility for their employees in terms of working hours. boeing plunging in premarket. they are looking to tap about $60 billion of u.s. government aid. kevin was talking about a $1.2 trillion broad-based package. boeing was already dealing with the grounding of the 737. this trickle-down effect we are seeing on boeing and airbus from these airlines, united's ceo

yesterday said they have never seen anything like this. it is unprecedented. that stock, you can see, down 17%. alix: thank for the roundup. one other asset i am watching has to be oil. today at one point, crude briefly traded below its lowest settlement in 17 years. the virus has battered demand as supply is overwhelming the market. the last time crude traded like this was during the sars epidemic when it hit asia. goldman coming out again with another downgrade to the oil price forecast, the third in the last two weeks. they see brent falling as low as $20 a barrel, and a look at a global surplus of about 5.7 million barrels of oil a day in the second quarter. an enormous peak inventory build, so much that the logistics might not work to get the oil into storage.

coming up, more of your morning news, trade and analysis of today's first take. this is bloomberg. ♪

alix: time for bloomberg first take. running a from our in-house team of wall street veterans and insiders, mike mckee, bloomberg international economics and policy correspondent, damian sassower on the phone, and mike mcglone. i come in this morning and look at my screen, and a look at what is happening with bond yields, and oh my god, what is happening in these markets? make?what do you how do we understand it.

get thethe stimulus, we stimulus, bond yields rise, and equities selloff. michael: the good thing is equities selloff at the same times yesterday when bonds were falling, which is what you want to see happen. yields are rising today because there's going to be so much paper coming to market that it is going to push prices down. it's not a huge problem in terms of how it suggests the markets are working. they are working as you would think. going forward, it is a question of what does it mean for decision-making. you can't make any decisions right now because of volatility. alix: mike mcglone, when you see moves like this, if you are a risk parity fund, you are getting hurt on all sides. what do you do? mike: the good news is we are at the end of the beginning of the bear market. think that is the key thing you

are seeing for the vix. if you look at the 20 day average, it is nowhere near the peak from 2008. , think we should expect more just to be careful and be responsive. be a responsive trader, and for investors, leave this to the professionals. the key thing to note is from the standpoint that i look at, this whatever it takes standpoint, i look at this is almost a perfect storm for things like gold, yet almost a perfect bear's case for crude oil. think?amian, what do you i cannot imagine what it is doing to emerging-market central banks. damian: for me, but i am looking for here is the fact that some of these swap lines for central banks are probably going to need to be expanded. the biggest users of the fx swap market here aren't banks.

they are nonbanks. life insurers, asset managers. i think there's going to be a real debate inside the government as to whether they should expand those lines and some of the aid being offered here to other non-bank institutions. one of the things i am really looking at our money market assets. if we see something along the lines what we saw in the global financial crisis, where the reserve prime funds blew up, i want to keep an eye on that. that's one of the things impacting libor ois at these levels. michael: you go into the bloomberg, i don't know if we can pull this up or not, but the xccy functions shows cross currency basis swaps. you can see on the graph there, you wonder how long it is going to take for them to get included in the currency swap program, and who else is going to need it.

that's a great point. the scandinavians are the first ones that come to my mind. really, asian financial centers, singapore, hong kong, they just need to lubricate the system. the fact that they don't have a direct line to the fed is going to be a real issue going forward. alix: did we learn that once you have access to these swap lines, it works? that it's ok? i think that's more of a question for mike mckee. michael: i'm looking at this graph again, and you look at, for example, great britain, which has a currency swap line, the demand for dollars may be less there, but it does look like it has come in. we are going to play ring around the rosie. i'm going to toss a question to damian. what the fed has been doing with commercial paper and the dealing facility is getting ahead of real problems.

we have seen some strain, but we haven't seen a lockup like we saw in 2008 when they first established of these programs. is that the case also with funding and with other assets? getting ahead of it now as opposed to reacting to a problem that is shutting part of the market down? damian: all really good questions. japan keeps having the same problem we've talked about here, which is really the first lock on the fed taken by the treasury to support the commercial paper market. it could work. there's no question about it. but what we are encountering now , we've moved away from the a liquidity crisis. this is a balance sheet crisis with respect to banks. i think we had a fundamental shift in the credit quality of securities and issuers globally. banks are still struggling to get their arms around that. the bite -- despite the fact that they may be flushed with liquidity, i think it is taking time for them to come to grips

with the fact that what exactly does covid-19 mean for some of the securities and issuers they are collateralized. that is a real risk because if banks are encouraged to lend to end borrowers, we might have a real autonet here -- real bottleneck here. alix: when you take a look at want, theys say they wanted stimulus. they got that. what else is going to be available for market participants to make traders feel better and find a base for equities? the: that's the key word, market has got to form a base. if you compare this to history, we are nowhere near arm corrections. we are only one month from the all-time peak in the s&p 500. in 2000 eight, we were basically unchanged for 10 years when the market dropped. we've got to form a base. the vix is a good indicator.

we've seen the 200 day and 50 week moving average way too low. you need some disdain. if we have these sharp rallies, be careful of those, but to me, i think we are far from it. alix: wrapping it up real quick, number one thing you are watching today? damian: i am going to steal one from mike mcglone. i am looking at the crude oil curve. we just pushed 37% contango. that is an all-time record, deeper than we have seen in the global financial crisis. i think it is going to prevent russia from being able to cut rates friday. we are going to see a lot of em central-bank rate cuts, starting with brazil. alix: damian sassower, mike mcglone, great conversation. any charts we use on the program, you can go to gtv on your terminal and check them out. this is bloomberg. ♪

viviana: you are watching "bloomberg daybreak." we begin with softbank, casting doubt on the wework bailout it set to close soon. the japanese conglomerate saying it could withdraw from the $3 billion deal. it cites numerous government inquiries into the embattled co-working business. japan's three big automakers will partially shut their three big u.s. factories. they worked out a deal with united auto workers. chrysler and fiat resisted a request to halt operations for two weeks. bmw also halting car production in europe. the german automaker also closing in south africa come of this to help prevent the spread of the coronavirus. mercedes-benz and daimler have also taken similar steps. alix: let's stay in autos for a second.

auto sales could get a lot worse. they are already off to a pretty terrible start for the year come up worse than 2013. european car sales falling in february after a similar drop in january. rbc predicts a 16% drop in global car production this year. meanwhile, china's auto industry is also hurting. because of that, some governments may relax emission standards. chinese auto sales have been slumping for a couple of years. last month, they had the biggest plunge on record, down by about 80%. all of that wrapping into what happens if you have a global shutdown because of this virus. how bad is it going to get in the transportation sector? the latest read coming from air china, that february air traffic is down almost 81%. how quickly that will wind up picking up is definitely a big risk, especially as europe shuts its borders and the u.s. starts to shut down as well, and now south america is shutting its borders as well, all of that creating uncertainty in the

markets. coming up, volatility reigns supreme. we will have more on what to do in this environment with anna han, wells fargo securities equity strategist, plus mark head ofbank of america u.s. rates strategy. a massive move we are seeing in the bond market. year.sis points in the 10 we were all the way down to 50. but in europe, the moves are tremendous. italy basically moved 100 basis points in about two days. one of the ramifications for that, especially if the curve steepen's and the dollar rallies as well, all of that going to crimp the global economy on a fundamental basis. we will break all of that down. this is bloomberg. ♪

alix: this is "bloomberg daybreak." another brutal day for the markets. s&p had a huge rally yesterday. till had the best rally in years. --, limit down again

utilities had the best rally in years. now, limit down again for the s&p. switch of the board. it is a huge move in bond yields. now we are at 34 basis point move on the 10 year. we are over 2%, so what does the ecb do about it? you have borrowing costs rising in italy, facing a severe contraction while the virus keeps spreading. at the same time, you have a surging dollar. the bloomberg dollar index now 0.7%. almostlar take dxy is 100. these have bigger implications, and crude off by 6%. we are talking about company bankruptcies, what it means for emerging markets, and how they wind up funding themselves and cutting rates. all of that wrapping into the dysfunction of the market. let's get deeper into what you do in an environment like this. anna han, wells fargo securities equity strategist, joins me, as

well as mark cabana, bank of america head of u.s. rates strategy's. i wanted to talk to you about what happens. we wanted stimulus in's cohen action. we got that. then this was a really bad feedback loop. mark: it's not solved yet. pretty think there are significant liquidity issues in the market at the moment, which are probably exacerbating things. i think there is still a fair amount of uncertainty with regards to exactly what will be fiscalrated in the stimulus package, how it is going to be financed, and ultimately, if the fed can solve some of these broader market issues. they've been working really hard. we think they will get there, but there is probably a few steps until the market can function in a better state. alix: anna, how is liquidity in market?ty it looks like it would be a very

similar problem as in other asset classes. anna: we saw yesterday a massive 13%y, but the day before, a fly. you saw equity market panic. it is fair because right now, we have a lot of information being thrown at investors, and it takes time to process this. i agree with mark, it is questionable how this fiscal package will take place. how long will it take the impact to reach individual small businesses, employees being weighed down by the covid impact? we are asking investors to be patient, keep their cool, and give themselves time. we need to give ourselves time to see how things will shake out, and meanwhile, to take that high quality approach. alix: when we talk about what capitulation looks like, i am getting my friends calling me up and asking if they should sell equities. they are just basic retail investors. how do we know if we have that capitulation? how: it is hard to say

every single investor is thinking, but what we need to do is compare this instream. what will it look like -- what does it look like in the early 1960's, further financial crisis? the median back to pe, the discretionary pe, equity valuation has been more attractive. this pullback has created value in the market. however, are we trying to catch the bottom? we don't think that is a good play. why don't we keep our cool heads, release cash, and buy markets at attractive levels and take that long 12 to 24 your look -- excuse me, month look. alix: if you look within the funding markets at what is working and what's not, if you took a look cross currency, for those that have the line to the fed, is it working yet or not?

very large take-up in both the bank of japan and ecb u.s. dollar swap lines. those are going to settle tomorrow. that should provide some relief. you have seen acute dollar funding stress in those markets, but they appear to be easing to some extent. i don't think we are necessarily going to see a broader easing in these funding markets until the cash settles. until the fed solves some of the issues that are plaguing the front end of the credit curve, in particular, the cp and cd markets. alix: credit suisse says the fed is going to need to broaden the assets and dollar swap lines to other central banks, particularly in asia. you think that is realistic? mark: i think it is certainly on the table. during the 2008 financial crisis, we did have the fed engage with other central banks .round the world and in asia

for example, i think the bank of korea took part at that time. it is certainly historical precedent. if we continue to see very strained funding conditions, let's say in the korean won and in the cross currency market, i think the fed would consider taking those steps. to me, i have been very fedtened to the fact the seems to be understanding issues, responding to them, and trying to avert an even worse situation in markets. alix: do equity investors feel the same way about what the fed has been able to do? anna: the equity market has been more of a knee-jerk reaction as every headline keeps hitting, and every day we get different news, but we do think that the fed monetary side and the government on the fiscal side is doing everything to bolster and regrow that consumer confidence. what we have yet to see is how long will the covid-19 be

wrecking these industries such as airlines, cruise ships?, leisure how much will that weigh on consumer spending? alix: especially when consumers are looking at these headlines. when you take a look at the other things the fed has done, like commercial paper, lending program, opening up for primary dealers, that is all just to get the money moving and provide these kind of backstops. are those going to work when it comes to liquidity? mark: yes they will. however, i don't think the fed is quite done yet. the issue, when i think about it broadly in markets at the moment, is that investors are all being very conservative. they are all trying to raise cash because they are worried about outflows. that does in markets is creates a dynamic for these really only sellers and very few buyers that want to take the other side of these volatile markets. as a result of that, you're

seeing a lot of paper being pushed into the dealer community. the dealers are having to widen their spreads, their balance sheets are getting clogged, and they are just not able to intermediate markets as well as they might like. in that situation of the world, you are seeing some key markets really freeze up to some extent. i think one very important market is the cp and cd market because it is closely linked to money market mutual funds, which are seen as close substitutes to bank deposits. the issue now is that those money funds aren't able to generate the type of liquidity they would like. they are worried about outflows. they are worried they are going to see outflows and not be able to generate cash on the others. i think that was the most important thing the fed did yesterday with this primary dealer credit facility. it was to try and provide some relief to dealers so that they could pass that along to money funds, and also why the fed hasn't restarted the commercial paper funding facility, which was announced yesterday. i don't think they are done.

i think they probably need to take a few other steps to try and really unfreeze markets and get some of these assets off of dealer balance sheets, but i think they have taken a lot of steps in the right direction, and they should be commended for that. alix: what else should they do now? mark: there's two things i will be looking for. one, i think it is really important to try and provide a bit more liquidity belief -- and provide a little bit more liquidity relief for money funds. if money funds can't give you liquidity, then i worry about broader questions the public might have about how liquid bank deposits are. to address that, i think the fed should consider rolling out a program to either cd directly from the money funds themselves, or from the dealer community trying to intermediate those flows. the wrote out a program with a money market lending facility during the 2008 crisis, and it

wouldn't surprise me if we see that rolled out again in the next few days. the other thing the fed could do , something that treasury secretary mnuchin alluded to yesterday in his press a -- tight create program. we don't know exactly how it would be structured, but i assume the treasury and congress would provide congress with a bit of equity capital, which the fed could then lever up and go in and try and buy somewhat distressed or illiquid assets, at least at present. take some of those securities off of dealer balance sheets. we don't know exactly what they would be, but i imagine it would be quite wide-ranging, from perhaps ig corporate's, munis, and potentially other assets under this unusual exigent authority given to the fed and the treasury. i am going to be looking for something like that. the treasury already alluded to it, and it wouldn't surprise me if we see that in the coming days. alix: really good analysis of

what to look out for in that. so final word to you, anna, when you have to wrap all of this into how you look at the equity market. deutsche bank coming out with a pretty grim forecast now for growth, saying they see a severe global recession the first half of the year, and declines in growth is going to exceed anything we have seen since world war ii. how defensive can you still get at this point, and how much more selling should you still be doing? anna: what we are recommending to investors is to actually take the high quality approach. look for those low leverage companies with good capital, high r.o.e. which will help you , -- helpn the downside you protect on the downside. with such a large effort on the monetary and fiscal side, our view is that we will see a downturn in the next two quarters, but we still have confidence that gdp in the u.s. will grow.

very small, but still a positive 0.5%. 166ave lowered our eps from down to 152. that is a drop of about 8%. but given where market levels are, we still think equities are able to be played. alix: and mark, i lied. the last word will go to you. is there still now you to be had in treasuries? mark: i expect that, yes, there will be. we are not, unfortunately, through this yet. we don't know what the economic fallout will be. i expect treasuries are going to continue to function as a risk off type of hedge. there's a lot of supply that's likely going to be coming down the pike. we will have to see exactly how treasury wants to finance that. for the near term, recognizing how uncertain times are, and the fact that unfortunately, things may get worse before they get better, i would still say there is value in treasuries. alix: really appreciate it. conversation.

anna han of wells fargo securities, mark cabana of mike of america, thank you. ofwant to give you updates headlines outs of the business world. viviana: the trump administration is pushing a 1.2 trillion dollar stimulus plan to counter the economic impact of the coronavirus. americans could get direct payments of $1000 or more within two weeks. a month later, a second set of checks could be sent out. u.s. treasury secretary steve mnuchin warning republican senators if there is no stimulus package, the u.s. could face a 20% unemployment rate. over to the u.k., where prime minister boris johnson has his government is acting like it is wartime. it has announced a $424 billion in loan grants and tax cuts to keep the coronavirus from wrecking that economy. plus, the bank of england will set up a new lending facility for impacting businesses. joe biden tightening his grip on the race for the democratic presidential nomination. yesterday he swept all three

primaries, arizona, florida and illinois. now the former vice president has more than half of the delegates he needs for the democratic nomination. he also has a 284 delegate lead over bernie sanders. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm the vienna hurtado. this is -- i'm viviana hurtado. this is bloomberg. alix: coming up, wall street working for home. is it business as usual, and is it the new normal? more on that next in today's wall street beat. plus, if you have a bloomberg terminal, check out tv . you can watch us online, click on charts and graphics, and interact with us directly. scroll through if you missed anything. check it out. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, morgan stanley's chief economist. ♪ viviana: this is "bloomberg daybreak." i'm viviana hurtado. we begin with hsbc. interim ceo noel quinn was given the job on a full-time basis. he's been running the british bank for seven months. mr. quinn has been at hsbc for 33 years. the bank discussed the job with at least three high-profile outsiders. a warning from barclays. the british bank might struggle to reach its profit target because of the coronavirus. it could lead to bonuses being

cut. barclays finance director saying low interest rates pose additional challenges. i'm viviana hurtado. that is your bloomberg business flash. alix: thanks so much. we turn to wall street beat to cover three things wall street is buzzing about this morning. first up, virtual finance opens wall street size -- opens wall street's eyes. then, the rush to bond markets. some u.s. companies are turning back to the bond market to refi commercial paper. empireayoshi son's wobbling now. investors are skittish about softbank as they try to unravel a deal with wework. joining me now a sonali basak. seriously, you can get deals done remote? sonali: you have got to headed to my colleagues. they were able to find the bright side a lot of this. morgan stanley has a conference where registrations are up 50% because they are virtual instead. ubs has travel costs in asia declining 90% in february.

now bankers are saying maybe some of this should be the new normal. why are we flying all of our bankers around the world to these expensive conferences when we can just do it online? alix: i can see why a cfo would like that, but will bankers like that? sonali: no, they absolutely won't. [laughter] sonali: these budgets are going to be tightened more. of course, the rainmaker who shakes clients hand when they are able to do so is able to win the deal. this is a relationship business. alix: in order to close it, you still need that top person to make it happen. sonali: exactly. that is not going to go away. exxonwe saw verizon, yesterday buying bonds. talk to me about what you noticed. sonali: i heard a banker breathe a very big rest of fresh air last night. he said, listen, this is to million dollars of ig issued yesterday in the u.s., and now $20 billion globally. you're seeing the pipes finally start to open up a little bit. that said, as we know, there are

a lot of strains in this market. it is expensive to borrow, and people are not tapping that credit facility as aggressively as he would think, given that it is already getting a lot of criticism for being so sensitive. alix: and some of these credit ratings are getting downgraded. at the same time, i wonder with the covenants are like and if the investors give lenders a little bit more power than they might have a month ago. sonali: and these are big blue-chip companies. what about the small businesses, the ones that are a lot riskier? we are going to see some very aggressive terms from the bank. they won't make it all that easy, but they will be lending at much higher velocities hopefully moving forward. alix: did you have any read on what is happening with the shadow banks or the people they are lending to? sonali: we are watching very aggressively because we know they are in talks with everybody, especially the blackstones and apollos of the

world. they are seemingly working pretty symbiotically with the banks here. they know they can't take this on themselves, but they are looking to private financing. sovereign wealth funds, the big insurance companies. let's see if they are willing to come to the table. alix: softbank is what we love to talk about. [laughter] alix: what is going on with the buyback and all that stuff? sonali: a massive scoop yesterday about them really threatening to pull back on buying some of the shares from employees. including adam neumann. we knew, our gillian tan and giles turner broke last year, that they had been wanting to pull back on $3 billion commitment that they had made. this might just be a negotiating tactic. we don't know if they will pull back entirely, but a lot of things have been servicing during these negotiations, and as we know, tough times for wework at the moment. let's see where they leverage

really falls. not to mention, tough times for softbank as well. cdx has really blown out, and you have s&p saying that aggressive financial management really makes them question their commitment to their financials. after that $5 billion by that $5 billion buyback they announced last week. alix: also, they have to raise money, too, right? sonali: a rock and a hard place. elliott is agitating for $20 billion buyback. softbank is saying we will make $5 billion. but then you have the stock falling and the highly levered firm, you have issues from the borrowing side, from the capital deployment side. son -- we hadi masayoshi son in new york talking to investors, but that was really before the market rout, so let's see what happens about the ability to keep them moving. alix: totally staggering.

thank you very much. coming up on the program, it is a money market mania. we look at prime government assets in today's trader's take. if you are jumping into your car, tune into bloomberg radio across the u.s. on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time for trader's take. cleaning me as damian sassower of bloomberg intelligence. i have a money market mania chart. you brought it up earlier. walk me through why this is so important and what you're looking at. damian: prime money market funds are able to invest in a whole range of short-term instruments. bankers acceptance, commercial papers, cetera money market funds are not. they are only able to invest in t-bills, etc.. like we quality move

are now experiencing, you would expect to see short investors move into government money market fund, and that's exactly what you see. the chart is simply the ratio between the two. what this highlights for me is the lehman blow. it was the reserve prime fund that broke the buck. it went to 96 cents. this is a $63 billion short-term investment vehicle that went wheels up. obviously there is a reason for that. -- i am not at all protecting we will see another lehman-type blowup, but this is exactly what is driving the move in libor. alix: i was talking with mark cabana, and he said what the fed really needs to do is help the money market funds, and that if they don't have the cash, they

are basically going to help even more to offset that risk. that really goes with what you are talking about. damian: it needs to broaden its range of counterparties because those are the largest parties -- those are the largest borrowers. again, everything is still on the table. we have to be more fixable, and that is what i think the fed is going to do. alix: coming up in the next hour, we are going to speak to former white house chief economist jason furman, and also ahya.nd i -- also chetan this is bloomberg. ♪

♪ alix: welcome to "bloomberg

daybreak" on this wednesday, march 18. here's everything you need to know at this hour. let's take it right from the top. yields bounce, curves steepen as governments unleash fiscal stimulus. investors now wonder who pays the bill. not a huge problem in terms of how it suggests the markets are working. they are working as you would think. going forward, it is just a question of what does it mean for decision-making. you can't make any decisions right now. alix: the jump in yields now worrying markets. goldman now sees brent hitting $20 a barrel. >> we are looking at sending checks to americans immediately. americans need cash now, and the president wants to give cash now, and i mean in the next two weeks. alix: it is whatever it takes moment. dz promises a big stimulus package, including cutting checks for people who need it

within the next two weeks. kevin: within the next two weeks, i am told by sources that the president has instructed treasury managing to work quickly with congress and agencies to make this process move as quickly as possible. alix: the fed also unveiling its lending facility to primary dealers to help provide liquidity to customers. >> as more and more companies close up or make plans to do so, cash is going to stop flowing through the economy. that could lead to a health crisis becoming a financial crisis. the fed is trying to get in front of that, using its emergency powers to keep money flowing through the economy. alix: the u.k. follow suit with $420 billion worth of loans and tax cuts for struggling companies. pm johnson: we must act like a wartime government and do whatever it takes to support our economy. alix: the bank of england also says it will set up a new lending facility for affected businesses. germany might also eliminate a key capital requirement to keep credit flowing as companies try

to assess the impact of the virus on business. the fact that angela merkel didn't rule out the idea that she could look into a eurobond, an issue debt comfort inn years, this has been a no go for debtny -- and issued coordinated, this has been a no go for germany for years. >> i hear you. i know what's at stake. i know what we have to do. our goal as a campaign and my goal was a candidate for president is to unify this party , then to unify the nation. , former vices president joe biden sweeps the primaries on tuesday, winning arizona, florida and illinois, giving him a commanding lead. former vice president joe

biden had a strong night in the primaries last night, securing significant wins, including in the battleground state of florida. a lot of questions as to how long senator bernie sanders can continue onward, especially as the nation grapples with the impact of the global pandemic. alix: biden now has a 284 delegate lead over bernie sanders. in the markets, some staggering moves. crude falling to its low with level since 2002, breaching the 25 level. we are now at 24. days ago we were in the 30's, now body 24 handle. goldman says brent could go to the 20's. we are seeing multiple people calling for the teens. this hurts russia as much as it hurts saudi arabia. market, we are seeing buying come into the treasury market. yields down one basis point. in europe, it is all about tremendous selling.

28italy, the yield is up basis points. the dollar continues to reign supreme. s&p futures halted, limit down. now we are looking off by about 6%. another brutal day. some breaking news for you, thathon petroleum, transports oil as a pipeline company, naming a new ceo. michael hannigan will become the ceo immediately. elliott management has been trying to split it up into three parts. also made a big push for the ceo to step down, which he is doing. they have been trying to transition to a new ceo for a while. there were tons of rumors on who that would be. now we know he comes from the midstream world as well. in the markets, the key factor that has been gripping some investors is what we have seen in volatility, reaching unprecedented levels. the vix rising 84 yesterday.

the market could create a self reinforcing loop, princes of really -- reinforcing loop, particularly with deleveraging. joining me is amy wu silverman, rbc capital markets equity derivatives strategist. how do you look at the markets right now? amy: i am first of all remembering fondly the last time i was on with you, talking about how tail risk was pricing at a decade low. not true anymore. is thing i would say obviously, a lot of people in the last week or so have been asking about hedging. obviously, that has become incredibly expensive. one source of value we still see is in the long end of volatility. near-term uncertainties are really high, which makes term structure inverted, particularly at the vix. but i think there was a very protracted period of uncertainty, and if you look to

the longer dated kits, those still have to rise. we will still see value by owning volatility longer-term. alix: this is the function ccrb on your terminal. this is the vicks curve and how it has jumped -- the vix curve and out how it has jumped. if you are looking at 6, 7, eight months out, you are still at, like, 30 for the vix. does that mean that you don't expect a v-shaped? that we need to recalibrate the kind of recovery? amy: i think that is the perfect picture to look at. rveyou look at that ccrv cu versus a week ago, a month ago, what has been happening is the front end has been spiking up. see a little bit of parallel shift at the backend. now, we have no idea of how many cases are out there.

we have no idea the economic impact. i think that the back end is going to spike higher versus the long end, versus the short end going up. so there needs to be recalibration overall with those november and december buckets going higher versus just the minor parallel shift we see now. alix: when you talk to clients and people on the street, do you get a sense of how much deleveraging still has to take place within vol targeting funds, risk parity funds, etc.? amy: great question. i think we will see a degree of that today and tomorrow and the next day as we see all of the different expirations, and that has to do with what the dealers have on the others. just done.r we we are going to get some sense of the damage as we get towards week, but there

are two camps. trying clients who are to meet margin calls, and then there are clients who actually have a lot of dry powder. so it depends. if you came into this year and you are under invested, you are ,ctually in very good shape trying to seize the opportunity now. obviously, not everyone is in that boat. alix: i also, trying to seize the opportunity wonder, forever it diped like buy the because the fed would have your back. now it seems like selling risk is what you want to do. is that the right way to be looking at the market? you it really depends where are coming from. i have sort of been saying two things, and people say, how can you say these at once? there's still time to hedge in the long end. but the second thing i have been saying is for high quality companies, it is a good time to sell puts against them. that really depends. if you came into this year under

exposed to the markets and have dry powder, you are now getting companies which we know will do well because of the penned event , like citrix or something like netflix, where they are probably going to see increased volume, not less, because we are all confined to our homes. if you are selling puts on these, you're capitalizing on volatility levels we haven't seen since 2008 for entry points. it really depends what your starting position is, but there are definitely volatility opportunities to sell. i think it is mori i a single name basis -- i think it is more on a single name basis. , thankmy wu silverman you very much. coming up, the trump administration going big with a planned $1.2 trillion emergency package. i am going to discuss the architects of the stimulus plan under president obama. this is bloomberg. ♪

>> we are looking at sending checks to americans immediately. many companies have shut down. americans need cash now, and the president wants to get them cash in the next two weeks. alix: that was treasury secretary steve mnuchin yesterday, outlining some of the planned of the $1.2 trillion stimulus package. joining me is jason furman, harvard kennedy school professor and one of the architects of the 2000 and recovery act, a stimulus -- the 2009 recovery act, a stimulus plan during the financial crisis. the conversation is between $1 trillion and $1.2 trillion. do you think that is enough?

jason: i think that is enough for now. that is a large size. a lot of it will be very fast. we don't know how long the pandemic will last, so the most important thing is to build in that it grows and continues as long as it is needed. alix: a large part of that is basically cutting checks to people. we've been hearing $1000 of cut checks. maybe in may we will cut checks again. is that an effective way of stemming this? jason: i think it is part of what we need to do. we would love to get it really finally targeted to exactly who needs the money, but that is really hard to do at the best of times, and now isn't the best of times, so i think it is better to do something overwhelming, provide relief and support for people now, help them pay their rent, pay their electricity bills. maybe some of them will choose to order a bit extra. then this money will act more as stimulus after the fact to help

get us out of it more quickly. alix: is there a better option? it can get something done. if you were still working in the government, is there something better you could think of? jason: i think that is the largest, most scalable option. i think that should certainly be a part of it. twice.are being hit costs are going up and revenues are going down. they have balanced budget requirements. if they cut back their spending now, it will hurt the effort to contain and treat this epidemic. need to get more money to the states. we can do that through their medicaid programs. assistance that is most affected. people should get larger checks. sometional assistance for of the lowest income and most vulnerable americans should also be extended. alix: anecdotally, been hearing

some things about your job lazy off, but you are 8 -- your job but you are, guaranteed a job when you come back. one thing leading the recovery effort was the gig economy, and many people rely on that for their income. how do we need to think about addressing those problems? jason: that is part of why the checks are so important. it hits you in the gig economy, it hits you if your job went down to 3/4 of what you are used to. it doesn't discriminate. rather than over targeting , it airs on the side of getting everyone. alix: senator elizabeth warren saying it should be tied with things like not laying off workers, etc. using it is fair to make those kinds of requirements? jason: i'm not sure. certainly, we are going to need a bunch of aid for small businesses. i don't know if it is better to

do in the form of grants or loans. i think conditions are appealing to put on it, but really complicated to do at a time like this, that can inhibit the money getting out the door. it might just be better to say businesses have a real interest in retaining their employment, being able to bounce back, but frankly, i am trying to think through that issue myself. alix: that is a fair answer. i wonder how different the thought process is for you about this versus back in 2008. jason: this is faster and broader. it is something the likes of which we haven't seen before. i would have said in 2008, try a couple of different things. if they end up duplicating and over solving the problem, that would be a wonderful problem to have had. 2008 isdifference from

the capacity of the government is going to be lower now. you are going to have government workers teleworking, some people starting to get sick, their children are going to be home, they are not going to be fully focused. with any government program, you have to take in mind the limit of what the government can do. keeping it simpler i think is a real, special advantage at a time like this. alix: that is such a great point in terms of the unpredictable a t in that sense. we heard also, we reported out that treasury secretary steve mnuchin told some republicans that you could see unemployment up to 20% if you didn't get government intervention. have you been able to model what the potential impact to employment will be on this? jason: i try to look at employment, and you can get really high numbers. i think 20% is not an unreasonable thing to talk about. if nothing is done. a lot is starting to be done, so i think that should be something we can deploy. what we are trying to avoid is

doing that on a prolonged basis. the economy will be terrible over the next months. the economy needs to be terrible over the next month to stem the spread of this terrible pandemic. part of what the goal of policy is is to make sure that people don't suffer too much over the next month, and that the economy can be in a position to rebound. this is not a prolonged policy. it is just highly targeted and concentrated. alix: when we get initial jobless claims every thursday, i feel like there's going to be a high indicator that is quite stressful for the market to digest. as you see those numbers rolled in every thursday, how are you going to be digesting it? jason: i think, again, over the next month, the government is trying to shut down large portions of the u.s. economy so that the virus doesn't spread. that is totally appropriate, and i am very glad that they are doing that.

i think when we see these numbers, we should be nervous about it. we shouldn't assume that it is temporary. we should assume that steps need to be taken to make sure this doesn't put come -- this doesn't become more prolonged, but if we take those steps, we can potentially contain the longer-term economic damage. alix: just to sort of wrap it up here, obviously there has been a lot of talk about bailing out industry,ke the hotel airlines, for example. should the government do that? jason: the government is going to need to be involved with industries big and small in this country that, through no fault of their own, were exposed to this. i think you are going to need to have shareholders participating in that. you might need to have other debtholders in the process we have used in cases of the past, like chrysler and gm, to handle these type of workouts. if we can give ourselves enough

that type ofe, model might be the right one to use for some of the largest companies. alix: jason, thank you so much. you are one of the perfect guests to talk to about this today. jason furman of the harvard kennedy school, thank you for joining us today. now joining us on the phone is marvin loh, state street level macro strategist. the question now is how you pay for all of this, and the result is this huge move in global bond yields. how are you thinking about it this morning? marvin: certainly the speed at which this conversation changed, and really the view may be a couple of weeks ago that politicians were not going to be able to get anything because politics was going to get involved to these massive amounts, certainly changes the discussion a bit. wehink first and foremost, are looking at the economy and we need to figure out what needs to be done in order to make

sure we stave off the worst. certainly the plans are ultimately needed. from a funding perspective and a yields perspective, certainly yields had gotten to level that really called for the end of the world, to a certain degree. a backup is probably somewhat warranted. we are not necessarily happy with the volatility, but yields are still low. if we can get the economy in a position where it doesn't fall off a cliff, which all of these programs are intended to do, yield will respond accordingly. but like everything else, it's another volatility point to deal with. alix: it just feels like it is going to be a loop that is going to keep stressing us out. you need the bailout to support the economy. at some point, the question is how do you pay for it, which leads to really high bond yields , a steepening curve, and a stronger dollar which will have a feedback loop into the economy. how do we break that? marvin: what a tangled web we

weave, right? at this point, we really need to get a handle on the virus first and foremost. it is impossible to really put a number on growth, put a number e, until we e is in p get to the virus point. i think the fed is really trying to unfreeze some of the funding concerns. you need to start their so that we can start to hedge securities again, and maybe take a step back in price what either best case and worst case is. it is possible. it is just that there are so many machinations going on in different parts of the market at the same time that we need the liquidity injection that i think the and all of the other central banks have been trying to do over the last several weeks. alix: as a market participant, what do you do? marvin: you understand where the pressure points are. try to understand what the risk premium that might be implied by

some of these parts of the market that aren't functioning, and you need to make a decision that everything is going to be done to unfreeze those funds. if that can work in short order, i do think the fed has tried to do a lot, and they are doing a lot of things to unfreeze that. at a minimum, you need to understand how all of the machinery, if you will, works, and ultimately make a call on your risk profile in an environment that is going to be volatile, even when we come out of this. alix: marvin, great perspective. marvin loh of state street is sticking with me. much more coming up. this is bloomberg. ♪

alix: we are seeing a pretty brutal day within the markets. s&pspy that tracks the limit down is up 6%.

the worst off, no doubt, is going to be materials and industrials, followed by energy. crude hitting $24 a barrel, a level we haven't seen in 18 years. cities and states continue to shut as well. i want to highlight what is happening in the bond market. you are having a huge move in bond yields in europe. watch the bond proxies like the utility sector. utilities had the best move since 2008, so watch the reverberation of higher global bond yields. here in the u.s., we are stabilizing, in part a very european story. of morgan stanley on his latest call, next. this is bloomberg. ♪ good morning!

oh no, here comes the neighbor probably to brag about how amazing his xfinity customer service is. i'm mike, i'm so busy. good thing xfinity has two-hour appointment windows. they have night and weekend appointments too. he's here. bill? karolyn? nope! no, just a couple of rocks.

download the my account app to manage your appointments making today's xfinity customer service simple, easy, awesome. i'll pass. open looks to be another -- ugly open for the u.s. 6%, thatn by about

tracks the overall s&p, european equity off by 4.5%. the big moves have been in european bond yields. i want to monitor what is happening with the 10 year italy. it is not as it would be -- as bad as it would be before. down 58 basis points this morning around 4:00. what do you do about that as yields turn all over the place in europe? how could the ecb actually handle it? the 10 year yield in the u.s. about two basis points. you have the safe haven and demand for dollars as the funding is very much present within the market. crude taking a big dip lower, down by about 8%. bank of america coming out with a note that they see the possibility for sub $20. we will see a severe surplus in the market.

economic data is somewhat backward looking. in february in the u.s., we are down by about 1.5%. much better actually then estimates. only -- the permits were down by over 5%. of the economic indicators will be backward theing but we do have jobless claims tomorrow. one of the things you are at going forward? marvin: it is the high-frequency data and any look into the virus. i think claims will be in the spotlight in the way they normally are. the weekly johnson redbook numbers are also accurate to look at things. i suppose it is trying to get a sense of how quickly and how widespread this is impacting the economy.

intensity andan showing a look at how bad it is. we need data to back that up. it is important. hopefully it is not as bad. hopefully it shows how quickly everything shut down. morgan stanley says a -- growthrecession expected to fall to 9/10 of 1%. stanleyus is the morgan chief economist. how do you model what that is going to be? chetan: essentially we have tried to look at the number of days by which the social distancing hurts the business conditions. there are a lot of exemptions in different parts of the world. at this point we are operating within assumption that it would

be the second half of april or early may globally. if it goes further than that we will have more downside. where would be the biggest hit? we get a half ago we were all talking about china and recovery. now what is the real conversation? has gone beyond that. we all know. the biggest problem we have had in terms of understanding the impact is the spread of the virus has been much more than what anybody would have anticipated in europe. the outcome in italy has made people think about the way it is evolving in other parts of the world other than china. similarly what we are now grappling with is the rising asber of cases in the u.s. the testing gets ramped up. it is adding to the uncertainty

on the outlook. the recessions call mean for stimulus and central-bank action? haven: right now, what we seen is aggressive monetary policy response first. we tend to measure the response in the global average monetary policy. that actually includes the qe affect and takes into consideration nominal policy rates. has already gone below the levels we have seen in the post credit crisis. we have gone to a new low in terms of monetary policy support or the global economy. we expect more. in terms of number of central banks, we have seen 18 central banks out of the 30 that we cover. number would have increased 25. 18 to

on fiscal policy, we see everybody making announcements. when we did this report that we were calling for global recession, what we came up with the global fiscal policy response for g4 plus china is they will be doing 200 basis in fiscalnsion deficit. that would be quite significant. nominal's, it is $1.4 trillion on fiscal stimulus. we have assumed the u.s. will do a 350 billion dollars stimulus. things are evolving quite fast. we know the numbers you are putting out on bloomberg, they are rising by the day. if it is 800 billion dollars instead of 350 billion dollars, the global stimulus will rise to about 1.75 trillion dollars. alix: what is the blowback from

that? we are seeing it more in europe as we talk about a stimulus package potentially issuance coming from the eu carrying some of the regulatory money banks have to hold in order to free up lending. bond yields are blowing out. yields are steepening. the dollar is surging. what will be the longer-term effect of this stimulus even if it helps in the short term? chetan: the longer-term effect is something that we would probably be happy about the , you could finally get the information coming back. at this point in time we still have to go through the narrative problem of actually stimulating the demand. look at the backdrop of what has happening. the global economy has been going through a treaty problem. in that end, what you really need is a strong fiscal policy response. what this sudden shock is doing

is getting the policymakers to put the stimulus in action. is the righthat response a doctor would've wanted from this environment. alix: i want to bring back in marvin. if we are on the right track here, still looking at recession, how do you need to asset allocate? marvin: i think you need to think through what the world is going to look like when this is done. rates are higher than they were but they will remain relatively low. central banks are going to be there in a way that they weren't during prior recessions if you will. you will have a lot of liquidity once we come out of this. you will have low rates. you to allocate around what think does well in that kind of environment. hopefully it is a quick ounce back. the growth stories you like before are the growth stories you like afterwards. if you are a little bit more pessimistic you need to allocate

around that. i think this is the time to think about what the world looks like when we get out of this. because we will. hopefully it will happen sooner rather than later. alix: we heard from president , treasuryerday secretary steven mnuchin said what we get past this we will be up to the races, the economy will be great. you agree with that? chetan: i agree that we will come back strongly whenever we do. the concern is what is the duration? true and youase is do get the virus peeking out in the second half of april or may, we will come back relatively strongly. if it gets into the third quarter, then you are talking about a serious problem in terms of corporate credit losses. how we areend on

held because of this coronavirus. alix: appreciate you joining us. be sticking with me. breaking news with oil prices at 24, what are certain companies doing? the view andting buyback target. it has been taking time for companies to figure out how much they will want to cut. conoco cutting the 2020 view and the buybacks target. it will cut the 2020 production guidance. they will have to reduce the with repurchase program 250 million beginning in the second quarter. conoco has always been out in front and making the sacrifices. during the last oil crash they were one of the first to cut dividends and it paid off for them. they were able to recalibrate and get on a different track faster.

were capital disciplined and other companies followed suit. now with an update making news outside the business world. >> stephen mnuchin warns there is no stemless package, unemployment could hit 20%. trillion plan would see $1000 check sent to americans. if there is still a national emergency there would be a second round of payments area to the u.s. and canada, they will soon ban nonessential and non-business travel between the countries. one of the calls was basically a ban on tourism and vacations. joe biden tightening his grip on the race for the democratic presidential nomination. yesterday he collected all three primaries. arizona, florida, and illinois. the former vice president has

more than half the delegates he needs for the democratic nomination. he also has a 284 demoing -- delegate lead over bernie sanders. powered by more than 2700 journalists and analysts in 120 countries, this is bloomberg. isx: coming up, fedex sending its financial forecast. the pandemic blurring its outlook. more on that in the bottom line. bloomberg users interact with the charts that we showed during the show. this is bloomberg. ♪

>> coming up later today, scott minor, the global cio for

guggenheim. with cuts on the way at united airlines. in april, united will/international flights by 85%. it is cutting across the u.s. and canada by 42%. the drop in demand because of coronavirus is said to be worse than after 9/11 terror attack. the british bank might struggle to reach its profit target because of coronavirus. it could lead to cuts. low interest rates pose additional challenges. we end with a firm that was once -- wedbush slashing his price

target from $400 to 300 $40. they say will have a negative impact on apple for the future. they expect 5g iphones will not get released this fall as planned. .'m viviana hurtado alix: time now for bottom line. , want to kick it off with fedex. basically scrapping their guidance. not the only company to have to do so. >> what i thought was interesting is it was actually a benefit in all of this for fedex. they said the whole country, the whole world really concerned about the spread of this virus. a lot of this was carried in the belly of passenger jets. with a lot of these not flying, a lot of that workload is falling to fedex. they are seeing a little bit of

a boom. the caveat is if we do sierra session it will impact fedex and the flow of goods. you have a lot of people at home ordering a lot of things. depending on delivery to get them to them. how do you even look at price-earnings multiple and model earnings for the rest of this year? marvin: that is a great question. at the single stock levels it is not an area i'm generally trafficking. i do look however at the changing guidance language. of ais really the start cascade for reducing numbers. we need to ultimately get to this before we could put forward pe. all of us analysts whether we are looking at single stocks or global macro don't have any idea how any of this is really going

say the path of the virus is just so unknown. alix: that is leading to the other story, which is autos. auto companies from europe in the u.s. closing down plants for two weeks. auto buying in china is literally falling off a cliff. notablenk it is really that because the u.s. automakers are also looking at partial plant shutdowns at least on a rotating basis, we see that spreading in the u.s.. -- raises concern for me. whetherquestion about they could put eventually pause production. once you start shutting down factories it does get a lot worse very quickly. i also want to pivot to oil companies because in some

way that is the story of the market today as well. barrel, conoco doing the buyback program. it will be amazing from oil services to the guys that manufacture the stuff like ge for example. companies so want to cut dividends. going to see steep cuts come on buybacks. cut.is another stemming oil trickles down to services and equipment providers. they are less exposed than they were. we side huge breakup in the 2015-16 oil collapse were a lot of them jettisoned energy. they are definitely feeling the pain. i think about emerson, which has exposure on the automation side. do a lot of processing automation. ge, a big part of the leveraging

plant, they still have about 37%. that is worth a lot less than it was. that affects the resources coming in. such a good point. marvin, when you look at wti trading at 24 and brent at 27, what are you thinking? the first thing i think .4ut is what is the paying saudi arabia and russia? they probably are -- they probably have thought through the process to get here. does this bring them back to the table? effectsthe knock on into the corporate broad market -- bond market which is stressed already. energy compounds leading that stress. this is just another data point

to really look at whether or not makestress continues to the corporate bond market as challenging as it is. glad you brought that up. you take a look at the credit we throwing the baby out with the bathwater? is there something for value and corporate credit or will this bleed another industry? we are throwing the baby out with the bathwater to a certain degree. a lot of high-quality companies with ok balance sheets, decent cash flows that survived the crisis. they are probably well suited to deal with this to a certain degree. i do think however the overall stress in the entire market is something the fed is going to address. essentially understanding this put out there.y maybe the encouragement to get

primary deals and increased inventories via the facility that was announced. the continued talk that they might buy corporate something that is important. alix: i wanted to wrap up on what you brought up, brooke, companies rely on asset sales. that was part of the way they were going to fund their next journey is a company. they wanted to trim the fat and sell assets to free up cash flow to pay dividends and buybacks. i have to wonder how something like that is renegotiated. most of these deals probably do have breakup fees. it will be interesting if four's any sort of clause what we are seeing with the pandemic. remember when regulatory approval was our biggest problem? a lot of these deals will be rethought. it is not just on the oil side. across the spectrum. when you cannot get bankers from

point a to point b. the value of everything has been completely thrown up in the air. i would expect the price negotiations at the very least. ofx: appreciate that perfect -- perspective. marvin, great sketch up with you. thank you for your insights this morning. the helicopter money is coming and that means -- tune into bloombergradio.com the n sirius xm. this is bloomberg. ♪

alix: time for technically speaking. we will set you up for some trades of the day. i know you are looking at gold. this down $26 despite the fact that we will see the blowout is what you are looking at? trend.is a blip in the

it looks like it will double in value. that is not profound. on this first chart we see the u.s. debt with gdp. almost a guarantee it will blowout. zero wastime we cut to 2008. that is when the gdp launched above 65%. gold was around a thousand and then it took off. i see a very similar environment now. , that should be tempering in the market should go back to fundamentals of what you see here. alix: the more volatility you have, the lack of liquidity, the more gold will suffer. mike: in the short-term, but in the bigger picture, the rising stock market is big for gold. this is a better way to look at it. it is probably going to take up because we just made

an all-time new high. from 2017. circle is that was the lowest level ever. history doesn't repeat but it rhymes. the same thing happened in 2007. in the words of the catalyst, we just continue our lives. thanks a lot, mike. helping you set up for perspective today. that wraps up at "bloomberg daybreak." the chief u.s. economist will be joining us coming up. bond yields down over in europe. the dollar hangs on strong and oil gets completely wiped out at 24 dollars a barrel. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

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untilan: with a 30 minute the bell, equity futures have been down since 1:00 a.m. eastern time. here is your price action going into the opening bell, 30 minutes away. etf's down and down hard. it is -6.53%. let's get to the big issues. all-time highs in the stock market and helicopter money within a month. february 15 feeling like a month ago. the longest bull market ever turning into the quickest bear market on record. jay powell went from sanitation to cutting rates to zero and hoping to avoid a freezing of the financial market. not even two weeks