francine: u.k. in lockdown, boris johnson announces tough new rules against people leaving their homes. pmi's from germany and france show the stark economic reality. capitol hill fails again to agree on aid to u.s. firms. turning the tide -- will global stocks rally as china plans to lift the lockdown of wuhan in two weeks as the u.s. economy grinds to a halt. president trump says america will be open for business again very soon. good morning, good afternoon, everyone. this is "bloomberg surveillance ," a little bit different, a special edition from the homes of tom keene in new york and francine lacqua in london. tom, the debate has shifted. europe is almost fully in lockdown. we had these extraordinary measures announced the prime minister of the u.k., a lockdown in the u.k., but the reality is if you look at the lockdown and what officials are trying to do to contain the health crisis,

you have to match it with the economic reality. so we talk about testing people that could be immune, testing people who have recovered to try to figure out what the next phase economically could be. tom: the next phase, you see it in the markets today, francine. we have some important interviews on surveillance today to keep you updated on the virology. as london joins the lockdown, lockdowns appear at the margin to be working. there are terrific charts out there. what is important this tuesday is we are beginning to get a math, a cardinal rule in statistics that you need 30 data points, 30 data points, 30 days of information, if you will, to really get a sense of what a trend is. we are right at the cusp right now on the virus. you can see the trend of italy, terrible, but may be getting better. of new york and the united

states, really problematic. what i was -- i am italian, and i have been trying to figure out for a long time what people have been saying about flattening the curve, analysis. but the concern is when you look at wuhan, because maybe it some of the experimental drugs because they had access to medical supplies, it is very different from what you have in italy. policies put in place by governments also change the curve. 30 days, yes, but the outcomes could still be widely different. we will have full analysis of that program. let's get to first word news with viviana hurtado. viviana: we begin on capitol hill. that is where republicans and democrats are trying to reach a compromise on senate majority leader is mcconnell's stimulus package. it could be worth as much as $2 trillion. the democrats have blocked the measure twice in attempts to limit negotiations. nancy pelosi unveiling her own

proposal. now to president trump. he says the u.s. is not built to be shut down over coronavirus. he says the american economy cannot remain slowed for too long, saying, "we are not going to let the cure be worse than the problem." the president pointing out that even as some parts of the nation fight outbreaks, others may be able to resume economic activity. to the u.k. -- it is in lockdown. prime minister boris johnson ordering sweeping measures in what he called a national emergency. this to stop people from leaving their homes. mr. johnson approving a radical ban on unnecessary movement of people for at least three weeks. police will breakup gatherings, and they can find people who defy the new laws. an oil rally for the second day in a row. new york futures rising around 5%, past $24 a barrel. the trump administration is saying an alliance with the saudis is one idea to stabilize

prices. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, i am viviana hurtado. this is bloomberg. francine? tom? tom: thanks so much. the data is real simple. it is a better set of equities, bonds, currencies, commodities. i am going to call it out as we try to find out any good news. certainly we see it off the fed action yesterday with futures up, the vix coming in, four big figures right now, i believe. i also want to look at the dollar. finally we have a legitimate pause in the dollar with dxy, the blended big nation index, 64%, the euro, i believe it is. dxy -- yes, it is weaker, that is a really good sign. but critically and more important, the bloomberg dollar index, which includes much more emerging markets as well as the renminbi, even in as well. that is a real distinction

today, to see both dollar indices showing a that showing weaker this morning. -- showing weaker this morning. francine: there is a bit of a relief rally with european stocks ash or a hopeful rally, whatever you want to call it. stocks are up, gaining almost 4%. this is in part because they are looking at what is happening in china, saying, they are at the end of the lockdown, so maybe it could be quicker and that they had priced in. the dollar retreating against developed and emergent currencies alike. this seems to be a tentative sign of reduced stress after the dollar's steepest appreciation since the global financial markets. i'm looking at european bonds tracking treasuries lower, tom. i will have more on that throughout the day. straight to our guest host for the hour. -- globalson, global

asset management's chair of fixed income. is the liquidity in bonds generally ok? would not go as far as saying ok, i think it is still pretty challenging. what we have seen, however, is some pretty enormous reaction by all of the central banks, really of course being led by the fed, but i think the primary market and secondary market, corporate credit facility, still working through the details, really is helping. we saw a pretty big tightening of corporate spreads yesterday. as the market took the news pretty positively. perhapslp that this is the beginning of the end, but it is still a pretty difficult environment, and i think you have seen that in the price action over the last few weeks. just very significant price on little information

sometimes, but there is a reflection that it is just not the level of liquidity that we are used to operating in, compounded by the fact that like the three of us we are working both in terms of -- it is more difficult than it had been previously. tom: i look at the nuances -- andrew: sorry, i got both of you now. francine: sorry, tom, we are fighting over who gets to ask the next question. one of the challenges of working from home with our wonderful producers on the other part of the world. what do you need to advise your client accordingly? we talked about monetary policy and fiscal policy. but if we don't have a plan of getting the economy back to work, when do you know when the end is? andrew: i think that is a big

question, francine. what we are seeing now is governments coordinating with central banks in terms of policy. i think that is encouraging. areink the lockdowns happening increasingly not just in the u.k. -- i think the lockdowns that are happening increasingly not just in the u.k. but across the globe are a sign that that is a course of reducedhat does lead to infections and so on. that is the first phase. it is a little too early to say that we have visibility around how these things will play out, but i think it feels more like the right actions are being put in place to restrict the spread of the virus, and secondly, to provide liquidity to markets. i think our focus at the moment is just sort of managing risk in portfolios, meeting liquidity needs of clients and ensuring that we can do those and those

government actions, central bank actions are certainly helping in that phase. but i think it is early to start to think about what is the recovery looking like? i think what we would like to see now is perhaps just some , and thatin markets will come off the back of containment measures with any information we get around that. that is going to take weeks. tom pointed out the 30-day data point in the u.k., and across europe. we are still early in that process, so i think we will require another few weeks before we start to get some confidence. confidence that we get this under control. tom: andrew, what is so important here are the distinctions involved. what are the distinctions in actions that you are seeing from quiet money? not the drama of hedge funds, but what is the behavior you are seeing with institutional yield money? andrew: very good point, tom. there has been a lot of flight

to quality, and people taking down risk, i think the longer-term investors. that is true for pension funds, probably still sitting, waiting. there is a lot of dialogue taking place, and i think in many instances, looking for the opportunity that will inevitably arise out of it -- so i think we are still seeing the fast money move. we are still seeing some retail flows, but i think the longer-term investors basically are waiting for the opportunities. no one wants to move too quickly because the situation is so unusual, but they will be looking at when is it time to put money to work because of course we have talked for years about how tight corporate spreads are, how low yields are, to run their opportunities certainly much higher yields -- in high yield in emerging markets, even at investment gate corporate's. i think once we get some

stability, that money will be looking to get employed and that is -- in those areas. tom: we certainly saw in the literature yesterday elements of 2008. phrases coming up, three letter words like mvs or cdo's and such. is there risk in the derivative space now, the derivative and synthetic instruments that cause so much trouble in 2008? are they out there lurking now? you don't know what you don't know, tom, of course, but in terms of the size of those markets and the amount of leverage in those instruments, very different to 2008. i don't want to be too brave and say that is not a problem, but it is not an area that is causing us a great deal of concern at this stage. i think it is just in the more vanilla products, and just the size of them, and i think etf's,

and we have seen pretty big moves in the etf discounts come up to sort of 5%. at the same time, some of them trading at premium. there is still some disconnect between underlying assets and what is happening in etf's. but i think in the instruments that cost a lot of difficulty in 2008, i don't think that is where the -- that caused a lot of difficulty into thousand think that is where the problems come from. francine: coming up later today, one of the interviews later today -- i am looking forward to it because he wrote one of my favorite opinion pieces, all rumor, -- paul romer. he is trying to argue that we need more testing for people that could go back to work sooner to make sure the economy does not crumble. this is bloomberg. ♪

the federal reserve announcing further steps today, this body cannot get its act together. and it is on the others of the aisle. francine: that was senate majority leader mitch mcconnell expand on why democrats have helped to create this market meltdown through their lack of support for the coronavirus stimulus. still with us is andrew wilson from goldman sachs asset management. i want to ask you where you see value overall. first of all, can the u.s. and other countries afford what they are doing in place, or will questions about that come later?

andrew: i think questions will come around later. obviously with the pension lay low interest rates, the cost of serving the inevitable increase in debt is not the primary concern. i do think that is part of the reason we have seen some steepening in yield curves, and if anything, we would expect to persist and continue. particularly as we start to see through just how deep all of this downturn will be and at what point will we have some confidence around a recovery. i think then people will look at the amount of debt issuance that is required to do this. at this stage, it is really about doing whatever it takes. to quote mario draghi, to get us through this inevitable economic downturn. the next phase will be, ok, how much debt have we incurred, how will we pay for that, and what are the implications for bond levels, yield levels, and slopes of curves. francine: andrew, when you look

at what is happening in china, and other concerns about wuhan, but things are getting better and the economy may start to reopen in a couple of weeks, does it mean that you see value in some of the asian countries? or is it too soon to make that call? andrew: i think it is a little soon to make that call, francine. the same question we are asking, everybody is asking, we can have containment and it brings down the rate of infection, but what happens when you start to list that? i think you -- i think wuhan will provide a blueprint to other countries in terms of how do you have an exit strategy from the lockdown we are all in, and what is the consequence or implications of that? no doubt about it, lick everyone else, we are watching the situation credibly -- like everyone else, we are watching the situation incredibly closely. i think it is too early. tom: i want to show people the bloomberg on my cell phone this is the bloomberg terminal on my cell phone. andrew, i bought up the asp -- i

brought up the apple piece of paper out 25 years, the 4%-plus coupon on apple computer. 116, it has gone way lower in yield, then why hire in yield. can i buy something like that? it is buying quality paper that has seen price down and yield up. is that an opportunity now? andrew: well, i think in many cases what we have seen is because of market liquidities situations, people are selling what they can to raise capital, and there are a good number of instances where sort of quality names, large companies have been sold because that is where liquidity is, and that has created opportunity. so i think there are opportunities that are going to rise out of that, and some of those are going to be in higher quality names, to play because they have been hit by this liquidity crunch. us, theme that for

distinction between quality corporate bond and what we are seeing, and not the worst distressed stuff that makes the headline, but the garbage out there. is there a massive gap between the quality investment grade and the better high-yield right now? not really. i hesitate to call it incremented that indiscriminate selling, but -- i hate to call -- i hesitate to call it indiscriminate selling, but there has been wide selling. look at the treasury markets, where we saw a difference between on the run and off the run treasuries, just being very extreme. some of that has started to come back in again, so i think there are going to be situations where companies that had much weaker balance sheets that were unlikely to survive, you know, do get a result in sort of defaulting, but i think equally they are going to be high quality names that also have been penalized through this that do have strong balance sheets that will be able to survive

this downturn, and still represent good investments. again, trying to sift through that at this early stage, tom, is still pretty early in terms of making those calls. francine: andrew, how much more can central banks actually do come or how much can do governments do? andrew: i think central bank have been pretty proactive and generous with their facilities. i think the pivot really now is from central banks towards governments. there has been significant fiscal policy injections across europe, across the u.k., and of course we are all watching very closely what is happening in washington. i am sure eventually will get an agreement there. the sooner that happens, obviously the better. the central banks really have played their part, and they have now opened the door for governments to boost fiscal policy, and many of them have risen to that challenge.

then it is going to be a matter of more human behavior and to what extent does this virus start to look like it is being contained before we have confidence that all of the stimulus, both monetary and fiscal, results in an economic impulse, and we are all sort of speculating whether that is q3 or q4 or hopefully not longer than that. but again, that will be i think how the story plays out here. andrew, thank you so much. andrew wilson from global asset management paired with a good morning, good afternoon, good evening -- asset management. we say good morning, good afternoon, good evening to you. with bloomberg , you can you go underneath the video screen if you have question and say ask a question. this is bloomberg. ♪

viviana: you are watching "bloomberg surveillance." that's get your bloomberg business flash. we begin with softbank that plans to sell shares in alibaba as part of an effort to raise $41 billion to shore up his this is battered by the coronavirus outbreak. softbank is also considering selling stakes in sprint and in its japanese mobile phone unit. -- it froze hiring across most of the firm. bloomberg has learned instructions in include the

corporate investment bank, the consumer unit, and the asset and wealth management group or the hiring freeze is due to uncertainty over the economy pumped it by the coronavirus pandemic. that is the bloomberg business flash. i see you changed locations. you have a plant behind you right now. the we will talk about plant later, but i am trying to outdo steve engle in hong kong for the plant derby on bloomberg surveillance. we have a better take, no question about that eared have futures up a good 105 points. spx etf up 4% as well. simon french joining us next. this is bloomberg. ♪

♪ this is bloomberg you guessed it,

it is from home. let's get straight to the economics. bank andlot of central policy action from banks around the world, some coordinated, some less coordinated, and we are expecting the stimulus from the u.s. joining us, simon french. always great to see where you think the economy is going. we had some ugly numbers for german pmi. will it get worse? worse beforell get it gets better in terms of pmi, but investors must ask themselves when bad news is in front of good news. andmore effective lockdown everything we know on how this effectives the more the lockdown, the better the chance of seeing an economic recovery in the last part of the year. francine: we are just getting

figures out of the u.k., falling pmi from march, to 37 instead of the forecast 45. boris johnson announced a lockdown yesterday but has anybody figured out what the economy needs? safeguard to protect lives but we need to do things to make sure we don't fall into a depression? weare looking for -- simon: are looking for universal coverage of support. we have seen a package from the bank of england from the treasury that covers 80% of the economy but 20% that is self-employed and groups who fall outside the traditional support mechanisms who urgently need support.

not is a challenge that is unique to the u.k. it will be facing congress and the senate when they pass their stimulus package, how to get into the highest health groups who do not have physical working lives and the targeting methods do not apply. francine: what kind of economy are you seeing? in the u.k., will we see a recession and than a v-shaped recovery? will it be a w? when will we figure that out? when will we know more? simon: in terms of the v-shaped recovery in terms of immediately returning activity to the levels we saw pre-covid, there is a tiny likelihood of that happening.

however, the success in keeping workers employed businesses are solvent which will dictate whether you get a u-shaped recovery with the amount of time measured in terms of quarters rather than years. that would mean -- that would be my base case because the level of support has been unprecedented and should allow companies to continue capacity, at least by shadow capacity, and twist into gear later when the social distancing measures get back. multipliers,about always framed as a good and beneficial thing. we have a viral, some would say a natural disaster as well. what is the multiplier of the fiscal stimulus to people whether they are in london, new york, madrid?

what is the fiscal multiplier if the government's start writing checks to people? fiscal multiplier is certainly greater than one and probably higher than any time this decade. that is the good news from the government standpoint, the opportunity cost of not doing anything is hugely damaging to the long-term productivity. history says the risk that resources become unable and lose their production capacity. that is what governments are trying to avoid right now and long term fiscal positioning is enhanced as they throw a truck load money at the moment and do not worry too much about moral hazard. u.s. overl in the worries of moral hazard,

buybacks, this is not the time i'm afraid. you can do that when the moment is over but now it is about getting cash in the pockets of the businesses that you want to be solvent. assume that ift we see a first tranche of fiscal stimulus, by definition we need a second tranche months later? simon: yes, because a big demand stimulus right now is not going to be very effective because we being encouraged to restrain our consumption and our movement and what you don't want is a demand stimulus to chase economic activity. there will be a moment where emergency stimulus shifts from preserving the supply side to stimulating the demand side.

is possible to have a v-shaped recovery but more likely u-shaped and that demand stimulus -- should be thinking about. as --rilliantly said, but is a demand stimulus nothing more than a boost to consumption? have never tested writing big checks to the public. helicopter money, that is one way to look at it. maybe it is boeing 777 money as well, give money as the consumers money and have them pay it back over the years? simon: this is expanding the spending power but there is also a measure around generating consumer confidence which will be intensely damaged by what we are seeing at the moment.

what you want to do is provide momentum to the economy to let consumer confidence, which was near its all-time highs, you want to get it back up to that level. the spain balance sheet, central-bank balance sheets are allowed to provide momentum to allow them to get there. the cost is you get a prolonged depression when the low confidence level sets in. , we simon french with us are thrilled to continue with him. here is viviana hurtado. viviana: u.s. house speaker nancy pelosi released a 2.5 trillion dollars stimulus plan to influence negotiations. it would force lenders to cramp -- grant a temporary reprieve $1500 to the-

retired and unemployed. president trump is predicting america will be open for business and soon, a lot sooner than three or four months. the coronavirus, he suggests some parts of the country might resume activity while others fight outbreaks. the french economy is in a record down term. -- downturn. they have forced consumers to stay home. france's gdp is collapsing at an annual rate approaching double digits. france has largely been on lockdown for week. china is said to lift the lockdown and the epicenter of the coronavirus on april 8. transportation will resume in wuhan. residents will be able to leave

the city and province. numbers dropped to zero. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. much.hanks so andave got carl weinberg daniel moss of bloomberg opinion really railing against the new chinese statistics, can we trust them? we can trust always a good the formern with minneapolis fed president. this is bloomberg. ♪

♪ this is bloomberg "surveillance," tom and francine from london and new york. markets, s&pe futures after volatile weeks lifting up, barring more gains. because we have had some volatile days i am not sure what the market is looking at. yesterday was an ugly day. they may be looking at the fact that china seems to be easing controls because they feel the pandemic in wuhan is under control. my morning must read is a great looks at whether this virus will kill off the economy. they argued that people with

immunity and who do not have the virus could go back to work while minimizing the risk to others. this goes back to testing on whether you have it or whether you are immune because you have had it in the past. let's go back to simon french. the health catch 22, services on one side and the economists on the others. it is saving lives without making the economy completely crumble. what data point do you look at? simon: testing is where you look at. look at the u.s. economy and figure 150 million workers, are you going to be able to test a sufficient proportion to make a difference to policy regarding stay-at-home lockdown? i think it is one of those comments that i agree we should striking the correct balance

between social distancing an economic policy, but to what degree will that be practical given the scale anything beyond europe or china? iancine: if you open up -- don't know who will come up with a vaccine, but if you make a test that is shorter, because at the moment it takes one or two days which is not practical, but if you do something which takes 45 minutes is that the only way to save the economy? social stimulus and research goes to that. simon: you can use the role of government and central banks to preserve economic capacity over an uncertain period while you continue social distancing measures because realistically, all the virologists i have heard

speak suggest we are at least a year from the infection passing. hardstically, it will be to introduce that into the equation, certainly not in 2020, and trying to find whether there is a shorter timescale check on whether you have it, you cannot get it a second time. that will be a key data point and i'm not sure scientists are sure on that. tom: we welcome all of you today to bloomberg "valence," during surveillance," during these trying times. me about the distributive characteristics of the united kingdom economy. prime minister johnson is throwing a fiscal wall, 4% gdp.

does london get all that benefit? does edinboro get all that benefit, or could it be distributed across the united kingdom? simon: this is one of the fiscal efforts in terms of workers, at a stagem idle that will cover their salary up to 2500 pounds a month. that will have less of a contribution in london because more people will max out above that than it would in the regions. an explicitre isn't think itbias, i don't will affect london disproportionately. it will be the opposite. in terms of the package, what has been impressive is the two arms of the state, the central

bank and treasury have moved in tandem, in sharp contrast to europe and the u.s.. for once, we are on a good step. tom: what is your working number on the percent of gdp of fiscal aid any major nation will need? i am impressed with the united kingdom statistic, but will it of gdpeater percent impulse to write this event once the virus disappears? simon: we spoke about this coming into stages. the buy side protection measures do not go far enough for self-employed's. setr replacement ratio is at a benefit level of something called universal credit, just 100 pounds per week, a

replacement rate of about 20%. your fiscal impulse will have to go up in the short-term to protect the incomes of those groups who are subject to lockdown, and a secondary demand sideoost the once we see social distancing needs. the balance sheet will blowout the fiscal deficit while out beyond the 150 billion, 160 billion requirements we got. it will be north of 200 billion easily. timeline,in terms of where is first data point that gives us the severity of the economic downturn? simon: good question. economists are looking at search engine based data to try to get a handle on where we have not got the hard economic data for

survey based data to quantify this. once you start to get traditional measures coming today,, you get the pmi but the read across the gdp will be highly erotic. i don't think -- erratic. i don't think i will draw any long-term correlations over that. are probably just over a month away in hard economic turns. -- terms. francine: simon french, thank you so much. conversationer with the imf chief economist who will give us her forecasts. interview at 3:30 p.m. in new york, 8:30 p.m. london. her forecast on what regions

will recover and which will be hurt the most. ♪

♪ viviana: this is bloomberg

"surveillance." amazon is cracking down on price gouging during the coronavirus outbreak. days suspended almost 4000 seller accounts for violating the fair pricing accounts. -- policies. talking with is lenders about filing for bankruptcy. bloomberg learned no formal decisions have been made but neiman marcus discussed a bankruptcy loan that would keep it running while it works out a recovery plan. twitter slashed its recovery plan -- forecasts. this quarter, twitter posted nine straight periods of profit. it iswest airlines says " in the fight of our lives," and is canceling flights.

aboutest is only filling 20% of the seats on its planes. that is your bloomberg business flash. tom: i am glad you mentioned southwest airlines and air france as well having a lot of issues. this is chengdu the panda, hiding out from the dog. we have a great hour coming up and the data check is appropriate because it is an up data check. bill ackman making a huge splash and weay going long, have savita subramanian with us perfectly timed. have now a lock up we -- not the lockup, the halts on the spx with futures up big. francine: it is a similar

situation in europe. european equities are gaining some 5%. unclear exactly what they are looking at. there was a huge selloff last year -- last week. maybe they are looking at wuhan getting back on its feet. i wanted to bring you other things, vix not as elevated as yesterday. sell more thanpe forecast in march. the economy is taking a battering not seen in decades because of the severe restrictions on business and households desperately trying to contain a pandemic that killed more than 17,000 people worldwide. you see demand plugging at a record pace, confidence dropping. we need to find a way of fixing

both as much as possible, the economy and saving lives. tom: important that we are seeing this morning and linking it back to the medicine, great log mythic charts of all the national and urban trends. we have not spent enough time on spain. it is really grim statistics in spain, particularly in madrid. we are thrilled to bring you in -- savitaour sabrina subramanian. thrilled she will be with us on a day of optimism. this is bloomberg. stay with us. ♪

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mcconnell-schumer put. action by a deeply divided senate. .ompromise is in the air optimism is prescribed. advance,tabilize and the dollar weaker against pound and em currencies. again, optimism in the air. guess who is not coming to the minute-- one hour, 48 trump briefing? from frost.st intrigue is in the air. this is bloomberg "surveillance," lockdown in new york and london. tom keene and francine lacqua with a great team helping us pieced together what we usually do effortlessly.