alix: fed's relief rally. stocks bounce as the fed goes all in, buying everything from domestic grade bonds to etf's. pmi's crater. japan, france and germany see deep contraction in activity, and it is about to get worse. and fiscal falls again. congress is unable to pass a fiscal stimulus bill, while house democrats released their 1400 page version. :elcome to "bloomberg daybreak america's" -- welcome to "bloomberg daybreak: americas" on this tuesday, march 24. we are seeing limit up for s&p futures. yields moving higher on the backend. is the worst over, though? morgan stanley says 3.4 million jobless claims could be filed for last week, so we will talk

about the impact later on in the show. time now for bloomberg -- time now to dig a look at all the news you need to know, from d.c. to new york. we are joined by bloomberg's michael mckee, taking a look at all of the market action and economic action out of europe. it was a tough day for services pmi's. michael: absolutely, and the charts tell the stories. these were the worst numbers ever for france, germany, and the eurozone, showing the service industries worsen manufacturing, and in part due to a quirk in the data. the market, we get pmi's at 9:45 this morning. the same sort of data are expected. we also get the bloomberg consumer comfort index, the most high-frequency consumer confidence data. that has been moved up two days. the crashing of the european economies has revived talk, or

pushed, shall we say, talk of stimulus higher up the agenda. german chancellor angela merkel has already decided that she is going to establish a stimulus program to help revive the economy, and she has put aside money to provide loans to small and medium-sized companies. a person familiar with deliberations in berlin say they don't think that is now going to be enough, and they are considering a more classical stimulus program financed by debt it would be broad ranging, but probably not including broad distribution of money like the u.s. is thinking about. european finance ministers holding a teleconference today on how to help italy, the center of the coronavirus outbreak in europe. there is some talk of them using the stability mechanism, although the italians don't want to do that. but if they do, that sets up credit lines for other countries . it could open the way to

outright monitoring transactions. that is the powerful bazooka mario draghi established that has never been used, but would allow countries -- the ecb, rather, to buy as many bonds as they need to from any particular country. we will see if that happens. one quick note on the fed and its emergency actions, the swap down $150an has taken billion over the last week or so since they established the program, more than during the entire financial crisis. you can see the desire for dollars out there. alix: that's a great stat. so glad you brought that to us. all of this helping support the markets, here as well as in europe, with equities rebounding since their lowest levels in 2016. joining me with more is bloomberg's dani burger. dani: that's right, another limit up reached in u.s. stocks, the 11th limit up or down in the last 10 days. the markets continue to get

whipsawed. european equities moving higher as well. the best performing sector in europe is oil and gas, no surprise. oil it self moving higher today. in a sign of maybe some of the easing stress, the dollar snapping that day wingstreet. is the grab for -- that 10 day winning streak. just a grab for cash over? maybe not. say market commentators that is not the only reason stocks are doing better today. saw thesterday we announced measures. one of the things that might be helping equities is the end of forced selling. this is something a lot of commentators have been looking out at to help support markets. we have seen a whole lot of systematic selling deepening the crisis we have seen in markets. on credit suisse's prime , they seeplatform

the quonset and systematic -- they see the quants and systematic sellers contribute into some of the market turbulence we have seen. the good news, if they are done selling, it means there's less selling they can do from the point they currently stand at. this is something j.p. morgan thinks will happen. now that volatility looks like it may have reached a peak, a lot of these sellers when velti picks up, that is when they are prompting to sell. king their place is about a hundred $50 billion worth of cash on the sidelines that a lot of different investors are going to need to pile into stocks to help restore some of their allocations. this is something like a manager that is light on equities and we need to buy equities at this point. alix: also what we have seen is a lot of companies in the last 24 hours, twitter, southwest, jp

downgrading or hiring staff. dani: i think the breadth of the different sectors we've heard is really stark. citigroup possible global revisions earnings index is now the lowest on record, which means we have seen the biggest amount of downward revisions on record. when you look across industries, definitely any of the service related industries are some of the hardest hit. bev, for example, who completely scrapped their forecast, or panova card -- or .inault you have companies like ltac and american airlines really waiting to see if they can get any help

from a fiscal package. tech, a sector you might think would be immune, you mentioned twitter, they are not necessarily because a lot of these companies rely on ad spend for their revenues pending -- on -- for their revenues. one of the biggest signs of trouble we are in terms of hiring and implement is jp , just because of the uncertainty they are saying. alix: thanks so much. we ended in washington, where house speaker need to pull as he unveiled her own 2.5 trillion dollar rescue package. putting the is keith washington -- is chief washington correspondent kevin cirilli. walk me through the likelihood of any agreement today. kevin: the likelihood of an

agreement still very much possible for later this afternoon, but as you mentioned, house speaker nancy pelosi unveiling a proposal of her own valued at more than $2 trillion. it would allow for there to be student debt repayment of up to all of, and also waive the housing rental costs, as democrats are saying there need to be more protections for lower and middle income americans, more so than the republicans have put forth in their version. however, republicans and president trump saying time is of the essence. there's a palpable frustration for a lack of coordination coming from leadership on both sides of the aisle about when this vote is actually going to take place. it is the politics of yesterday that have really tied up the

procedure here, and that is putting even more pressure on leadership to get this done within the next day. much,thanks so bloomberg's kevin cirilli. one other story that caught my eye this morning, there is a small town in eastern kentucky that has become the first u.s. city to have gasoline prices fall below a dollar a gallon. c virus pandemic has crushed fuel demand and sent the economy to the brink of recession. in chicago, wholesale gasoline gallon. under $0.20 a paul bingham says you almost can't give it away at this point. on the commodity market, later this hour, i will speak to mike wirth, chevron ceo, the company cutting capex for this year by $4 billion. coming up, more on your morning news, trade and analysis on the markets in today's first take. this is bloomberg. ♪

♪ alix: welcome back to "bloomberg daybreak." time now for first take. going may from our in-house team of wall street veterans and insiders, damian sassower our of bloomberg intelligence, michael mckee, bloomberg international economics and policy correspondent, plus julian chief equity and derivatives strategist. when you take a look at the market, all the liquidation and selling, is that over now? damian: i don't think so, but markets are definitely rebounding today. dollar-yen cross currency, which is the one you have to keep an ion, has kind of widened out

relative to euro and pound. that it is green on the screen again. andurrencies are rallying, it looks like china is back in business. quite frankly, as we rightly pointed out earlier, we are starting to see yields come off. julian, what do you think? is this a dead cat bounce, or some thing else? julian: we think this is the start of a bottoming process. iscall yesterday the low probably a bit arrogant, and almost mathematically impossible. but what we saw yesterday, if you look at the gyrations in the last 24 hours, essentially 24% high to low of the total value of the s&p went back and forth, and that to us, particularly with the vix going lower, even

though you made a new low in spx, tells you that the sellers are not necessarily finished, but quite exhausted. alix: is this all because the fed just fixed it? michael: not just because the fed fixed it come about that is part of it. the ecb also with their big program. i will go back to something i said yesterday, that markets are forward discounting mechanisms, and trying to figure out what the proper price should be at a point in the future. we don't know when that point is because we don't know when this virus is going to burn itself out, but what we do know now is when we get there, there's going to be a lot of support for the economies not just in the u.s., with the fed, and europe with the ecb, but it does look like we will get a big fiscal package out of the u.s. congress. the germans are now talking about a new bond issue to try to raise money for a broader stimulus package. we are going to have a lot of money going into the economy, targeted at companies, and that

should not only help the economy get started more quickly, but should contribute to earnings once we finally get there. you can see what julian is talking about, the beginning maybe of a bottoming. alix: i love that you brought up earnings. i feel like all i have seen our earnings revisions between the fastest pace ever. we are also going to stop halting buybacks at some point, and that is going to be a hit to pe. what do you think in terms of earnings? julian: there's no question that given the set up, it is likely to be a negative year on year comparison. how deep, we don't know. is less abouthere what the earnings trajectory looks like this year and more about whether we are doing the right things to ensure that by the time we get to the fall, there will be a recovery in confidence and an economic rebound. you are not going to come all the way back to the numbers that we were at 5, 6 weeks ago.

but what you do need to see his trough thing -- is troughing. from our point of view, what the fed did yesterday and what the globe is doing, we did a total of -- we did a study of the total monetary and fiscal stimulus, and friday, that number was about 7% of gdp. now you've got to about 9% of gdp. when you thing about the fact that the fed is basically issuing a blank check, that number is likely to go higher. for us, that is the real backstop. we are going to try to look through into what 2021 could look like. alix: that would be amazing. , does that mean you are taking on more risk at this point? what are the indicators you are looking at to say you can go buy risk? damian: financial conditions are still in the tank. in china and the u.s., broadly speaking, if you look at the

goldman sachs current activity indicator, it is predicting 0% growth across the whole of em this year. what you have to kind of distinguish between is the fact that you have the fed and the ,unding issues in the u.s. definitely the biggest impact on markets and market pricing. you can't change the fact that oil plumbing to new lows really change the impact. the negative convexity with which a lot of currencies trade is huge. it is certainly weakening the dollar here. alix: good tease, thank you. sr -- damian sassower and michael mckee. julian emanuel of btig will be sticking with me. coming up, we will speak to ceo of chevron mike wirth, talking about cutting $4 billion in

, also suspending its buyback program. we will talk about where they go and what it means for the future of permian production, next. this is bloomberg. ♪

♪ alix: welcome back to "bloomberg daybreak: americas." chevron cutting its capex program by $4 billion and suspending its buybacks as well. here with us is ceo mike wirth. by $4 are cutting capex billion this year, where are you going to cut it? mike: it is good to see you. first of all, i just want to continue to express my support for all of the people who are fighting this disease and the first responders and health care for editors -- health care

providers on the front line. we are looking at our business and adjusting to an environment where we see supply and demand changing dramatically. we announced some changes today to reduce our capital spending by about 20%, or $4 billion. that means as we get to the end of the year, our spending rate will be down 30%, which would imply a cut of more like $6 billion as we exit the year. distributed across our portfolio, but the largest single piece in the permian basin, which we've indicated is a flexible portion of our portfolio. i've always indicated the strength of chevron's business was the ability to flex our capital if there were market signals indicating that was the right thing to do. what does that then mean for permian production, and how quickly do you feel the capex shift to actual take out rates? mike: we were guiding this year

took capital spending in the permian over $4 billion. we have reduced that by $2 billion, so thing about it coming down by half. permian production earlier this month at our investor day, we had indicated would exit the year somewhere north of 600,000 barrels per day. we are bringing that number down by about 125,000 barrels a day. a significant impact from what we had laid out just a few weeks rigs,s we standdown standdown completion cruz, and really ramp -- completion crews, and really ramp activity to a much lower level. alix: can you give me some insight into how you are thinking of the oil price trajectory? if we stay in the 20's for x amount of months, then we have to revisit our capex spending in these areas?

mike:mike: we look at a number of scenarios. oil price is maddeningly difficult to predict in normal times. it is impossible to predict in times as uncertain as those we are in right now. .emand clearly is off in some parts of the world, very dramatically. it is not clear what we will see -- clear when we will see economies open up and demand return. markets work. we have a mismatch between supply and demand. the price signal suggests less investment, less need for near-term oil, and certainly, that is how we are responding, and i think we are seeing others do that as well. markets with bond well to those signals also. it can take -- markets respond to those signals also. it can take some time. you have seen situations like this before. we know what to do, and we are

doing it. alix: part of the question i think the street has with all of the oil companies, at what point do you have to cut your dividend? how long can you sustain your dividend at these prices? mike: our financial priorities are unchanged. the dividend is our number one priority. we have increased our annual dividend payout for 33 consecutive years. we haven't cut our dividends since 1934, and the depths of the great depression. a had a long track record of secure dividend, and recently, a three decade track record of a growing dividend. we are very mindful of that. we came into this environment with the strongest balance sheet in the industry, and we are taking strong actions to preserve cash not just for the capital spending reductions, but with the termination of our share repurchase program and the continuation of efforts we have already announced to further

reduce costs, input margins, and improve efficiency in our underlying business. all of these are measures that align with our financial priorities, preserve long-term growth, but sacrifice in the short-term any response to the markets. but we feel very good about our track record on the dividend, and it continues to be our top priority. alix: now i am going to ask you the question you probably hate more than the dividend question, and that is the m&a question. right now, oxidant to -- right now, occidental is trading below the price of anadarko when you place a bid for anadarko. is anything on your shopping list? mike: we have moved on, and we are taking actions to keep our company strong and viable. strong companies have opportunities over time to acquire other businesses that make sense. we've always said that is a high

bar, and we like our portfolio. it is one of the reasons we will be able to navigate this well, because we have a strong portfolio, and we intend to stay strong. we will leave opportunities and shopping discussions for another day. alix: one quick follow on that. when you talk about the high bar for an acquisition, is the high bar the price or the asset? really is asset quality as compared to what we already have within our portfolio. we have a strong portfolio. anything we would add wouldn't just be because we think we could buy it at an attractive price, but it really would be because we think those assets make us a stronger company that builds long-term value for our shareholders. they would compete for investment within our portfolio, and they strengthen our value proposition over the long term. that is what we look at. that is always what we look at. broaderke, for the

macro question, do you feel like oil at $25 is a supply or demand issue primarily? mike: yes. it is both. it is the markets saying we've got more supply and less demand than would balance somewhere near the actual marginal cost of production. so it is clearly a market signal saying that it is a market not in balance, and it is distance have been buys -- and it suppliers ands encourages consumption of energy . unfortunately, given the economic situation globally right now, oil prices really don't have much of a stimulative effect on the economy because there are other forces that are suppressing that demand. i think that is what makes this price cycle more unpredictable. we don't have as much of a track record with how the economy

moves through these shutdowns, recovers from a pandemic of this nature, and moves forward. it makes it tricky to try to predict the price. alix: so i guess i ask because on the demand front, there's nothing you can do about that. basically, the virus needs to sort itself out, and economies need to reopen. the supply side is different. texas railroadhe commission said maybe texas to join with saudi arabia and russia to cut output. are there any conditions you could see where you would voluntarily cut production with those countries? as an american company, we can't coordinate production cuts with any companies or countries. we just talked about the fact that we are reducing production in the permian basin by 20% versus what we outlined just a few weeks ago because we are making choices within our portfolio. you see other companies doing different kinds of things, and

is this -- doing similar kinds of things, and it is a response to the market. the market doesn't need more short-term oil, and i think people are taking the actions that will respond to that. discussions between other entities may or may not occur. sotory says that takes time we can control the things we can control. we know what to do, and we are doing it. alix: i am going to take that as a most likely not come on mike. good to talk to you. thanks very much. ceo, theh, chevron company cutting capex by $4 billion for this year. coming up to my nancy pelosi unveiling b $2.5 trillion stimulus been. we will break that -- stimulus plan. we will break that down. the equity market is rebounding from the highest level since 2016. you have some optimism in europe, limit up on the futures

market. part of the question is what do you do if the economy keeps shutting down. china's beige book saying you could see a 10% to 11% contraction in china. wuhan is happening up, yet that up, yet thatng is a big gap. market isse in the clear. you are still selling a little bit of bonds, although the u.s. is getting a bit of a bid with $40 billion of 2-year note's coming online later today. you are getting a little bit of a rally with gold as well. much more coming up on the program. this is bloomberg. ♪ we are actually going to -- sorry, as i try to work out working from home -- we are smetterswelcome kent on the 2.5 trillion dollar package taking shape to rival the republican bill. professor, you take a look at budget models for these kind of

plans, is it the right time to ask can we afford this? kent: it is a great question. of course, we always have to ask because it is going to have a long-term impact. at the same time, the benefit of stimulating this economy in the short run is very important. all of those things matter. if the long-term impact didn't matter, we would spend infinite amounts of money. so the balance is always important. alix: aren't we kind of thinking the senate spending infinite amounts of money? it feels like there's definitely going to be a backstop. if that is the case, at what point does this come home to roost for us? aboutthe house bill is 2.5 trillion dollars, much bigger than what we saw in the last great recession. the fed is doing a considerable amount of buying in corporate debt. where it comes back to haunt in

the long run is, in the case of the case of the fed, you eventually get inflation as a result of that. we are not so much worried about that in the short run, but if this persists, inflation would happen. that would erode the values. in terms of the house and senate action, it is really going to come down to an immense amount , but consenting makes sense in the short run. in the long run, how to deal with that debt, that is how we pay for it. so we are going to have to figure out that balance. how do we figure that out? it feels like in the deficit, no one seems to care until we care. how much of the treasury issuance can we actually handle? kent: that's been debated for a long time. people have their own magic

numbers of 90% to gdp, and that's when bad things happen. of course, a lot of people say japan has had debt of up to 200% of gdp, but japan also has a household saving rate of almost 10 times that of the average american. when it comes down to it, there's a lot of debate about that exact number. as it is, even before the current situation, we are on an exploding debt path that is not sustainable. this is going to add to that path, so again, there's no question about the need for short-term action, but there is also the point that we are going to have to get that debt to gdp ratio with the current household savings rate in the united states, if we are going over 100% of gdp, that gets very cautious and very concerned about that. we are currently on that path, even without this current

stimulus bill. i guess the question is, what kind of stimulus would be most productive and feedback through the economy quickly, and hurt us lessen the longer-term? really three broad options. the three broad options that people have talked about, the one that was popular weeks ago keeps working its way back, the payroll tax cut and suspending payroll taxes for the rest of the year. as a budget model, we found it is pretty expensive at $800 billion. the main problem is it really doesn't hit the people who are most impacted, the people who are most likely to spend that money. a lot of it goes to people who would simply save the money. it also takes too long. it is to settle. if you don't have a job, it doesn't do any good for you. the other option is direct cash

payments. you send cash to people, and now the number is being ramped up, sending checks for $1000 to every tax filer, plus $500 for every dependent, so a family of $3000, and it is faster. it is a lot cheaper. about $275 billion. you can also put progressive cuts in that and make it taxable so that higher tax people pay it back next year, but also, more importantly, target workers in the service industry that are hardest hit. thirdly, we discuss unemployment insurance, and that is really tricky. the one hand, it is targeted to lower income households that are more likely to spend the money. that is good. the problem is the qualification have to be dramatically

supplied. of service workers have multiple employers, and a lot of those have not made contributions, so trying to manage that is really tricky. great point.really i appreciate your perspective on that. kent smetters of wharton school, thank you very much. still with me from btig is julian emanuel. when you take a look at the different companies in sectors that are going to be impacted, what is on your shopping list? julian: from our point if you come apart of this is trying to gauge, given the fact that over the last several days or weeks, we are now going into an era where there will be more government involvement in corporate america than ever before. obviously, the precedent the fed set yesterday with announcing that it intends to buy corporate bonds is that there will be a sort of choosing of winners and

losers among the sectors, and i think clearly, our playbook financials, be obviously. all of these actions are intended to make sure that the economic crisis is contained, in terms of time, if not severity, over the next several months, that it doesn't morph into i financial crisis. there's no question about the fact that financials are much, much stronger and healthier than they were during the 2008-2009 period. we would also say health care. as much as there has been a drive to regulate health care, there's no question about the fact that going forward, in terms of preparedness, and terms of the development and innovation, the government will be sponsoring the health of the health care sector in our view. alix: a different question, what stays bad? i say that, having just got off an interview with mike wirth of

chevron. there's a conversation about negative oil prices, as you see so much oil overflowing in the world. i am guessing energy stays bad for you? julian: when you think about energy, at this point, so beaten down. when we look at all the assets , thethe last week, to us oil price itself basically touching $20 a barrel last week seems to have been the one that, absent a deeper, longer recession/depression, you may have capitulated there. clearly maybe trying to get something to move between saudi and russia could put a floor under it, but you could get 50% rally in energy shares just because they are so incredibly beaten down. but i think the longer-term, you do have to question particularly theors who are waiting in

index. we've got to a passive environment to a great extent, so if you are an active manager, there is less risk when the index is as low weight as energy is intaking that benchmark risk. the bigger to financials now in health care. alix: i guess the broader question for crude, do you need a bottom for markets to bounce? considering that, oil equities are such a small portion now of the overall index. julian: from our point of view, you absolutely do need a bottom in crude for the markets to bounce. it is very similar to the first , whenr of 2016 essentially, the fall in crude really caused to be gridlock in credit markets. we have seen the same thing, which is also why the fed came in and backstopped primarily the investment-grade markets.

but more broadly, it is a guidepost to the potential for everything that is going in the pipeline stimulus was to reflect the fact that we have the ability to reflate. so we look at oil very closely, and we are encouraged by the last few days. alix: ok. optimistic sign. i will take it. i want to know what's happening with volatility and how you hedge. with the fix coming down, do you hedge? where and how do you do it? julian: it is very difficult to hedge right now. even if it is so difficult come on a day like yesterday, when you moved 24% from low to high to low to capture those moves, to pay for options you own on the 50 or 60 volatility is very difficult. what we would say is you measure your investment horizon right years,either minutes or

and really nothing in between. from our point of view, thinking about it in terms of years, this is the time when you don't necessarily use options, but you h, and we think you should be buying stocks carefully and slowly here. alix: always good to catch up with you. thank you so much. we do want to give you an update now on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: republicans and democrats trying to reach compromise on senate majority leader mitch mcconnell's stimulus package. it could be worth as much as $2 trillion. senate democrats blocking the measure twice in an attempt to influence negotiations. house speaker nancy pelosi unveiling her proposal. donald trump is predicting america will be open for business again very soon, a lot sooner, he says, then three to four months. the president says the american economy cannot remain slowed for

too long to fight the coronavirus outbreak. he suggested some parts of the country might be able to resume economic activity, while others fight outbreaks. the eurozone sinking into the deepest economic crisis in its history. measures to contain the coronavirus epidemic have brought markets to a standstill. activityt gauge of plunging to the lowest level since two decades ago. 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 viviana hurtado. this is bloomberg. back to you. alix: thanks so much, viviana. coming up, it is a hiring freeze now at j.p. morgan. the bank asks managers to review job postings and pull listings. plus, if you have a bloomberg terminal check out tv . watch us online, click on charts and graphics, interact with us

directly. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, narayana culture lakota -- narayana culture lakota -- narayana kocherlakota, former minneapolis fed president. ♪ viviana: you're watching "bloomberg daybreak." to sell about $14 billion of shares in china's alibaba come a part of an effort to raise $41 billion to shore up businesses battered by the coronavirus outbreak. softbank is also considering selling stakes in sprint and its japanese mobilephone unit. luxury retailer neiman marcus is speaking with lenders about filing for bankruptcy. bloomberg has learned formal

decisions have been made, but neiman marcus has discussed a bankruptcy loan that would keep it running while it works out a recovery plan. i'm viviana hurtado. that is your bloomberg business flash. alix: thanks so much. we turn now to wall street beat to cover three things wall street is buzzing about this morning. first up, j.p. morgan hitting the pause on hiring. credit suisse trades at $21 billion of junk. and mcm leaders are left stuck with junk at citi and deutsche bank. putting me, also working from home -- joining me, also working from home, is sonali basak. i miss you and studio. in this hiring freeze, who are they hiring freezing? sonali: it is hard to work from home. is ther, jp morgan biggest, and the operations are quite broad, so you have the investment bank, the retail workers, and they are going to be really freezing hiring on a

broad swath. it is not too surprising, given the environment. i think what we are looking for, is there going to be even more drastic action than that?\ are they going to be making some layoffs at this bank or any of the other banks? we will be on the lookout. right now, it is just a hiring freeze. we also saw jp morgan about a week ago make the decision to temporarily close about 20% of its branches as well to get through this coronavirus outbreak. this just a jp morgan thing, or do they have thature to certain areas make them more susceptible to a hiring freeze, or is this more industrywide? sonali: we don't have more announcements now, but i would be surprised if we did not see an unspoken broader thing right now. how are you going to hire people? let's be clear, actually. there is a bright side to this.

there are areas seeing such increased activity, like mortgages, where we are seeing banks start to hire. i was talking to a boutique bank executive that actually hired in the last couple of weeks. i don't want to say people are not being opportunistic in this market, but the broader sentiment is along the lines of what jp morgan is doing here, which is a broader hiring freeze. alix: credit suisse showed that it traded more than $20 billion in junk debt. where is business booming? sonali: this is especially interesting in junk debt markets. usually it tends to be a little tougher to find. credit suisse did jump do the freight here is a market maker. it helped push sales and trading revenue up significantly from the same quarter last year. when it comes to sales and trading across all of the banks, you've seen how much volatility has risen.

sometimes, that can be a really bad thing. the full read across wall street, although we know many banks have been benefiting from the higher volumes that are being traded. with that said, credit suisse got very lucky in the last couple of years as it scaled marketsother capital areas, like oil and gas. they are not heavily exposed -- heavily exposed there. so this allows them to shine in the places they really can shine. alix: good point. we are getting worried that there are some loans that just can't be sold right now, leaving citi, deutsche on the line for some loans they gave to mgm. how quickly do these pipes need to clear? sonali: this is something we call a hung loan. when there is a difficulty in offloading it, the banks have to

take it on themselves. greatnow -- and this is a by my colleague -- citibank and thische bank are part of deal tied to can see those -- tied to casinos that mgm tried to buy last month. the plan for at least $2 billion in mortgage-backed securities, and we know that the market has had issues along with the casino industry. it is a lot of money. we expect to cli more of these deals. i do want to call out -- we expect to see a lot more of these deals. i want to call out another instance my colleague wrote about last month, about el dorado resorts. they had also issued some of a takeover.

this is angroup, but issue that many banks will have to deal with in the casino sector, but more as we go along. alix: thanks so much. great to chat with you, bloomberg's sonali basak. let's keep a little check in here on working from home. the work from home environment may have actually been an added benefit for employers. people are working longer hours, according to virtual private network service provider nor do nordvpn.-- provider in the u.k., france, and canada, the working day is extended by an average two hours. so instead of working 13 or 14 hours, we are working 16 or 18. i was definitely logged in until, like, 10:00 last night. coming up next, today's trader's take. if you are jumping into your car, tune into bloomberg radio heard on sirius xm channel 119 and on the bloomberg business app. this is bloomberg.

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alix: time now for trader's take. joining me is damian sassower of bloomberg intelligence. still looking at china. on china's one year swaps, it fell to the lowest level since 2010 overnight at 200 basis points. to me, what that suggests is the fact that the pboc -- or the markets are inspecting the pboc to inject more stimulus. our chief china economist is --ecting one had 50 to 200 expecting 150 to 200 bips. what you're looking at is the basis point differential between china and the u.s. on your swap spread, and how that is impacting forward points. the cost to hedge further along the curve in you on -- in yuan is going down again, so that

suggests china is going to be stimulating more, cutting rates, and are going to come in some. alix: thanks a lot. really appreciate it. in intesa our of bloomberg intelligence -- damian sassower of bloomberg intelligence. coming up on the program, paul , nyu professor of economics will be joining us. in the markets, you are taking a look at an equity market that is still around the highs of the session. we had a limit up earlier as well. you're seeing a little bit of selling in some bonds, and in the u.s., yields up by about one basis point. this is bloomberg. ♪

♪ stocks bounce from 2016

lows as the fed goes all in, buying everything from investment grade bonds to etf's. pmi's crater. japan, france and germany see deep contractions in-service activity, about to get worse as countries like the u.k. tighten lockdown measures. and congress is unable to pass a fiscal stimulus bill. why house democrats released their 14 -- white house -- while house democrats released their 1400 page version. in the markets, you are seeing a relief rally. the question is, have we liquidated all that we need to liquidate? have they delivered enough? we are seeing a little bit of selling in the bond market. we have about $40 billion worth of two-year supply coming on later today, moving the 10 year. the dollar off of its high, oil getting a much needed relief bounce. becomes whation

stimulus measures can we actually get from d.c. that will actually help, and how fast will it move into the economy? joining me to discuss just that is paul romer, nyu professor of economics and nobel laureate. paul received the nobel prize in economics. a real pleasure to chat with you today. thank you so much for joining me. paul: good to be here again. alix: the question everyone has right now, is the cure worse than the disease? are we moving through so much economic hardship right now regardless of the why? paul: no, what we need is a cure. the problem is we are spending money on pellet if -- on palliative cures come about what we need is a cure so everyone can go back to work and resume daily life. there's a way to get there that doesn't require everybody being in lockdown for months, even

years on end. the trick is just you identify the who are infectious, isolate them, and let everybody else return to business as usual. not the first person to necessarily say that. i was talking to a doctor yesterday who said you can use workers who are out of work to help facilitate the testing environment and get people back to work. logistically, how does all of that work? paul: before you think about how you are putting unemployed people back to work, think about doctors, nurses, police officers, people running utilities. they all have to be at work anyway. so what are the kinds of things we can do to make this safe? the first thing is we have to test people and test them repeatedly. identify who is infectious and pull them off the line so they don't infect their coworkers, they don't infect the public. the other thing is you've got to

provide key workers protective equipment so that if they deal with a memorable public who is sick or needs help, the protection will keep them from getting exposed. the best way we could spend stimulus money is not with just giveaways or checks, but to spend billions of dollars as fast as we can on scaling out testing, and rapidly increasing production of protective equipment. alix: it doesn't feel like that is going to happen, at least in the short term. would you then advocate returning to work faster than we thought, like president trump seems to intimate? where would you advocate a three-month shut down like st. president jim bullard seems to be advocating? paul: i think we have to make it work. scale up the tests very rapidly. we are going to spend hundreds of billions, trillions of dollars, we can spend some of

that to get tests ready. then what you do is tell the people, if you have tested negative today, you can go back to work and work for days, i week maybe. instead of telling everybody whether they are sick or not, you can go back to work, you start testing people. let the people who are not testing positive be the ones to go back to work. at thaten you look outcome, what modeling do you have in terms of what is it due to gdp, etc.? isl: the first thing to ask can this contain the disease. i have been doing some modeling, looking at the epi eddie mitchell -- looking at the epidemiological models. we can just quarantine those who test positive and stop this virus in its tracks. and it doesn't take a perfect test for this to work. false test that has a negative rate of 20%, you just keep retesting people. you can still catch them within

a day or two of when they become infectious. so we just have to spend a substantial fraction of stimulus money to take the tests that we already have come of the science, the technologies already established here. build the stuff up and make it ubiquitous. we should have staffing in testing centers, and walmarts, and starbucks, the police department headquarters. we should scale this out as fast as we can because if we don't, we are going to face this terrible choice between letting more people die versus destroying the economy. alix: how much money would something like this ballpark cost? paul: we are in the realm of the unknown, but if we are talking about spending $1 trillion, $2 trillion, i think it is foolish, incredibly fullest, to not spend

$50 billion, $100 billion in the next few months to address the problem that we can fix and that can cure the underlying condition. spend that money on protection , and that is what is going to start to let people go back to work. alix: what do you feel is the biggest hurdle? presumably you have talked to a lot of people about this. what is the biggest hurdle to getting this done? paul: one problem is getting people to adopt a different mental model. this use of testing has nothing to do with clinical management of a case of somebody who is sick. people who are saying if you get symptoms, a cough, a fever, you should not get tested, that advice is exactly right. if you've got the symptoms, you have probably got the iris. you need to be isolated right now. we don't need you to go out and infect some people in a hospital. so this test is designed to

protect public health. the people we should be testing are the ones with no symptoms who seem healthy. but we need to scale out the test capacity to be able to test all of those people. the doctor who is singing about going to work today, or the nurse or the police officer, we should find out today, are you infectious? if you are, you've got to stay home so you don't infect your peers. alix: talk to me about how we deal with that scenario and the current unemployed labor force. you are going to need a lot of manpower to do something like that, particularly if you are going to have people staying home if they do get sick. the needs to be a replacement there. paul: one of the interesting things is that back in the 1970's, they said we are all keene zeehan -- we are all now.sians

that's the thing. now.e all keynsians instead of paying people to go out and dig holes, we should be paying people to develop new forms of protective equipment, innovate with new types of test, and then staff up all of the testing centers that we need to have to operate this. pay those people with some of the stimulus money. we should be talking $50 billion to $100 billion. pay those people, and use that as a form of stimulus. then you give away many hundreds of billions as well, but let's spend some of it on something which is going to solve the underlying problem. r, withoutrome this, how do you model what second corder gdp for the u.s. looks like? paul: as i said, we are in

totally unfamiliar territory here. one message about that is there's positive things we could do. on the negative side, it is reduction in 30% gdp, 50% reduction in gdp. but if we are telling 50% to 70% of the workforce you have to stay home, that's the kind of numbers we are going to be facing. i really romer, appreciate your perspective, and i appreciate you coming on air to talk to us about it. that is paul romer, professor of economics at nyu. for more, we are joined by former minneapolis fed president narayana kocherlakota. james bullard said you could see a contraction of 30% in gdp and the second quarter. what do you think we could see if we keep going like this in the u.s.? said, andas paul just

i have known paul for years, i think we are in unfamiliar territory. 50% arelike 30% or completely in the ballpark. it is important to remember that in the united states, we report our numbers on an annualized basis. these are still horrific falls, but a 30% fall reported in gdp really corresponds to something more akin to an 8% order to corder move. that is a nuance. we are in uncharted territory where we will see big negative numbers in the second quarter. alix: the rhetoric today is that the fed through the kitchen sink at the problem to fix it. in your mind, is there anything left that the fed can do if this gets worse? narayana: i don't think it is a movie would make now, but i think, maybe not so much in

terms of things getting worse, but rather, i think as things start to improve, and i do see things improving at some point, the fed should stand ready to be stimulative at that point. i think he bore going to be potentially nervous, uncertain, and those are things i think the fed can use for guidance to be helpful in getting the economy through that phase. balle moment, i think the is pretty much in congress' court. i think the fed did some things they should have left for congress to do, even yesterday. i think the ball is pretty clear in congress' court right now. alix: what do you think the fed shouldn't have done, then? narayana: i think the idea of setting up a primary market corporate credit facility, i think that direct lending really at a subsidized rate to

businesses, you can argue it is a good policy choice, but that is what our representatives are arguing about right now. i think the fed should have stayed out of that. i think the fed is well poised to fix liquidity problems in particular financial markets. a secondary market corporate credit facility is well designed do that. game the fedis a should have left for congress to pick up. alix: it also brings up the question of what you do with the high-yield market. jp morgan, for example, thanks u.s. jump on's are likely going to drove by -- junk bonds are by $250oing to grow billion this year. how do they help that? narayana: the fed should stay away from trying to do much on the junk-bond side. i think the challenge here is, if you look at this from the fed's perspective, the fed

really wants to fix liquidity --blems and doesn't once doesn't want to subsidize risk-taking. market, spreads have blown out in the junk-bond market. part of that is liquidity issues, but a lot of it is repricing of risk. the fed doesn't want to be in that business. we've got the tools, we as a government, have the tools available to us to subsidize that market or bail people were if we or bail people out want. congress has the ability to do that, and they can take that up. alix: how big do you think an unlimited bond buying program get?he fed should the vision always of saying we are willing to go as big as it needs to be is that you actually don't have to go that big. the famous mario

draghi "we will do whenever it takes" quote. they don't have to that much because the promise of doing whatever is needed immediately has that effect in markets. that is what i think the fed is hoping for, and i am optimistic that will transpire. i never liked quantity $700 billion. i think you are saying well, we are not really in it to win it. i think this kind of promise is not having to spend the money. alix: td securities had an interesting stat yesterday, looking at the fed, the boe, and the bank of canada to buy up to 20% of gdp in qe before they end. that number to me was really staggering. that?s the real hazard to

how do we get back from something like that? the couldn't take back qe last time. if you look at where we were come up we got up to 20% of gdp in this country. it really is a question of how much outstanding debt you have in your country. we are going to have more. we are going to be well north of gdp in outstanding debt. so i guess i don't see a number like 20% as being that problematic. for the fed isue twofold. first of all, if you're going to start to buy assets of companies for thee direct loans corporate debt, unwinding that is going to have some .ssues

the issue with unwinding qe you referred to is really an issue about somehow, even though we had $1 trillion in excess reserves, it still wasn't enough. a lot of what the fed is trying to do, as i read it with their treasury purchases, is really to fix what is going on in short-term financing markets. we just see these weird breakdowns in the connections between markets that i think the fed is trying to ameliorate. we are always there to make sure the price of treasuries doesn't get too low. alix: to wrap all of this up in terms of pivoting to what we were talking to dr. romer about, what kind of fiscal stimulus does the u.s. need to see to offset this and help support what the fed is doing as well? what percent of gdp do we need

to get? narayana: i think the question -- there was a great column today in "the new york times" that stimulus might be the wrong way to phrase this. we want to have a slowdown in economic activity right now from a public health point of view. the question is, how do you support households and workers and maybe businesses through this difficult time and we are trying to have a slowdown in economic activity? how much will that take? paul's ideas, but i think we are a long way from implementing those. i think we are in a fairly protracted slowdown in economic activity. i think congress is going to have to see workers and households through that difficult time. that is going to iron a lot of

spending. the good news is we are able to borrow at very cheap rates at the government level, so i don't think this will apply a big burden on the u.s. like $4 trillion, $3 trillion, $1 trillion? [laughter] narayana: i wrote a post about a government,re the the administration suggested $1.25 trillion. trillion that to 2.5 dollars. i have seen other numbers that double that to $5 trillion. you just have to be standing ready, i think, to be supportive to the economy. the u.s. is in a tremendous position at this point. if you have the ability to borrow at low margins with a low interest rate, that supports households and workers with a

limited ability. i think we should just be thinking we are going to get people through this difficult time without suffering undue loss. is, ik what my concern don't pick we should be thinking only about the second quarter. i think it is going to be a for quite slow period some time, just because of the public health considerations. alix: really great to catch up with you. narayana kocherlakota, former minneapolis fed president. joining mar for her take on the markets, mona mahajan, allianz global investors. on the one hand, you have a risk on bid today. on the other hand, you still have economists saying this is going to get worse before it gets better, but we are not there yet. so how much risk do you take on in that environment? thanks,alix, and

thanks for having me. in terms of the risk on today, keep in mind in bear markets historically, we have had rallies, and substantial rallies. really, that has not indicated a bottoming process. what we think we need to see in terms of getting to a bottoming process is to first address the health issue. we will first need to see stabilization and a plateau in the number of cases in the u.s., but we will also need to see or start to get signals of a viable treatment of this disease before we can really get the all clear. college ofom the london last week that essentially come of the social distancing we have on right now will have to remain in place in some form until there is a vaccination or antiviral therapy that can be distributed to the broader public. i would say there is still market volatility, and perhaps

downside ahead before we can call in all clear. alix: does that mean there is still room to sell and the risk -- and de-risk, or just rotate defensively? mona: when we think about putting a value or floor to the valuation on the s&p 500, if you consider some of the estimates that are out there, -20% to -30% s&p growth, and put a depressed 15 times multiple on those, you can get downside of 2000 and even 1700, which would bring us down about 15% to 20% from here. that being said, longer-term, we don't expect this pandemic to fundamentally derail the health of the u.s. economy. as we wait for those signals of , vaccination or therapies being approved, we do think that there will be opportunities to get your wish

list ready. some of the things we are thinking about, we do believe cash is king, but for those who need to deploy risk, we would consider a barbell approach. defensive assets will continue to have relative support, areas like treasury and sovereign bonds, gold, the u.s. dollar, and money market funds. on the other hand of that barbell, we are looking at selective risk opportunities that can do well even as we begin this stabilization process. sectors like health care, not only from the vaccination and medical equipment perspective, .ut also more broadly we continue to like the disruption of technology theme broadly, but specifically, areas like 5g, cloud computing, cybersecurity, those firms with larger balance sheets are going .o be essential

and then the stay-at-home sector . china's economy will probably be the first to emerge from this pandemic, and could provide some interesting opportunities. that is how we are looking at the world from a barbell approach. alix: great stuff. you are going to be sticking with me. much more coming up. this is bloomberg. ♪

♪ alix: time now for a check on some of your morning movers. some of the most beaten off sectors during the selloff leading the way this morning. airlines, cruise stocks. delta and carnival up by double digits. airlines could lose $20 billion in sales in 2020. gm up after saying it plans to draw $16 billion from its evolving credit line.

intel also up. it is suspending buybacks, but dividend payments won't be affected. that's the narrative. chevron says something very similar. this is bloomberg. ♪

alix: welcome to bloomberg daybreak. i'm alix steel. here is something.

limit up for s&p futures. the etf that tracks s&p holding up around 5%. a similar story in europe as indices shoot higher. maybe we will see physical stimulus out of germany. all of that offsetting the terrible services pmi we saw out of france as well as germany. volatility continues to come down, a key point if we will find some kind of low. also look at what we are having the treasury market. with yieldsing up higher by about four basis points. selling picking up in europe. in portugal yields are up 10 basis points ended france up by four. europe catching a nice bid. 3% when it comes to brent. we have seen consumers rush out to stock during the pandemic. one thing where seeing is demand for meat which is forcing food

giants to ship production processes. here's a man who can help us get some insight. dave maclennan, parkhill cfo, one of the largest agricultural companies in the world. it is good to see you and get your perspective. can you talk about what is happening in your business? what you have to make more of, what you have to make less of, where the problems lie? dave: good morning. it is good to be with you. is running full out. the fact is we are shifting more to retail from foodservice because many restaurants and bars are closing down. the fact is we are still making the same products we have always made. we are running full capacity and it it's going more to retail than food services at this time. alix: how does that impact you? are you making up in volume for

retail stores the same you're losing in restaurants or is it a different business proposition? ite: is more about where goes. volumes are still the same. because of the shift toward retail, the demand has been significant. some of our retail customers have reported demand is greater then it is at the holiday times. it is demand being pulled forward and people stocking up to put food in refrigerators and freezers. the volumes are still the same. one statistic i found interesting is based on per capita meat consumption in united states, one of our beef plants feeds 22 million people per day. it is vitally stay open and we are so grateful to our employees coming to work to keep the food being produced. alix: the plants are open but can you give us the insight into logistics. how you transport, are there any bottlenecks you experience? dave: so far we have not seen

bottlenecks. we have been able to stay in operation. we have about 1200 locations worldwide. only seven have closed. most of those are small offices or small locations. on fact is, we rely transportation systems. trucks, and rail. so far we've been able to get access to those forms of transportation to get food from our plant to where it is needed and where consumers can purchase it. alix: if you are going to experience problems, where would it be? which areas you need to target to make sure they are running? dave: the health and welfare of our employees and ensuring they can get to work. we have been working closely with state governments, with regional governments that as shelter-in-place orders have been given, they have declared the production of food to be

essential. that has allowed our employees to get to the plants to help us make the food. we have been in close touch with other transportation companies. the freight is moving and available. the thing we are focusing on the most in our operations around the world is our employees safety, making sure they can get to work and they are not prohibited by local egypt or some breakdown in their local transportation systems. alix: can you give me -- by or some breakdown in their local transportation systems. alix: can you give me a break down on that? dave: we have been able to run. there are some sporadic instances of absenteeism. if that occurs in large numbers we will have to run slower shifts or fewer shifts, but the fact is, so far, so good.

it is still early days. at this point we have not had to hire additional employees but we are keeping a careful eye on that. we have announced we have created incentive pay and we are looking at all of our businesses around the world for what we can do. tois a form of recognition say we so greatly appreciate our employees and the plant and we want them to know they are supported and we want them to be there every day. alix: can you give us insight into china. the news is that wuhan is opening up as the rest of the world powers down. you have a unique view looking at all of the different countries. can you give me insight into what happened in china and the pickup now versus what we are seeing in the u.s.? dave: it is interesting you asked that question because the head of our chinese business was sending out weekly emails to us as the covid crisis unfolded.

three days ago he sent an email saying this is my last update. our businesses are up and running. we have about 25 locations in china, about 12,000 employees. we had no outbreaks. none of our employees were confirmed positive. the fact is things move quickly. he did a section on what lessons did they learn in china and houses they were able to get back up and running so quickly? social distancing, the keeping six foot distance or more. a quick cessation of domestic and international travel, and things like washing hands, taking temperatures. the speed with which the chinese government reacted -- the chinese community has been through this before. there was sars about 20 years ago and other outbreaks. they were used to this and i think it is being shown it paid off in the form of their economy getting back up and running.

alix: i appreciate your perspective today. thank you very much. dave maclennan. gargill ceo. perspective company we have seen so many downward revisions to earnings. how do you model 2020 and 2021 numbers? it is extremely difficult. we know that q2 will likely be devastating. 50%wards of 30% or 40% or from an earnings perspective. the question becomes what happens in q3, q4, and then 2021. our hope is we start see a path toward recovery by the end of this quarter and that goes back to a couple points i made about a potential therapy in place perhaps as early as the summer

as we are hearing from medical experts. once we have that path in place you can start to build a case for recovery in the u.s. economy, recovery in the global economy. if people are given the vaccinations,iven you will start to see the comfort level of going out more and traveling again. markets will start to see that trend emerged and we will discount that into the prices. we need to get to the point where we are stabilizing the health pandemic, we have come up with a treatment, and then we can start to reemerge from an economic perspective. we do expect by q4 we are hopeful we will get there. as we are starting to go through the bottoming process, as we discussed, for those of us who have our wish list ready we might see opportunities in the next few weeks. something that has been a

shift is all of these companies suspending buybacks. how does that affect your pe model? mona: buybacks had been the number one source of demand for equities over the last couple of years. last years we had upwards of 800 billion dollars of buybacks and this year we will have close to half of that. keep in mind buybacks came to the forefront because we had low rates in companies rather than investing in r&d spending were looking to buybacks their shares. that extra cash on hand will be used to report through the crisis. it makes a lot of sense for us to reallocate that funding away from buybacks into support of the economy. that being said, over time we will continue to be an environment where rates are very low and we may return to a buyback environment. i know there is talk of regulation getting set up to

prevent some of that action, but i think it is an interesting way for companies to take advantage of a low rate environment. alix: i appreciate the perspective. mona mahajan, good to talk to you. the fema chief is speaking on cnn and saying president trump will use the defense production time iny for the first be used for 60,000 virus test kits. this is the act that forces companies to rejigger what their production is. this,has resisted doing saying gm and ford are already rejiggering so he did not need to pull the trigger. the fema chief saying the trump administration will use that act today. i want to give you an update on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: the tokyo summer

olympics have been put on hold. international the olympic committee agreed to delay the games by one year. they were scheduled to begin on july 24. now to the euro zone. it is sinking into the biggest economic crisis in its history. measures to contain the coronavirus pandemic bringing much of the business world to a standstill. plunging to the lowest since the index was started more than two decades ago. nancy pelosi is releasing her around $2.5 trillion stimulus plan, and attempt to influence negotiations in the u.s. senate. the plosive built would force lenders to grant a temporary freeze from credit card bills. it would also extend $1500 direct payments to the retired and unemployed. 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 am viviana hurtado. this is bloomberg. alix: thank you very much, viviana. coming up, the restaurant industry is in serious trouble. people self isolating, restaurants force to stay open with take-out or delivery. we will talk to someone who helps finance the restaurant industry. bloomberg users, interact with us on gtv on your terminal. any charts we use, check it out. this is bloomberg. ♪

viviana: this is bloomberg daybreak. i am viviana hurtado coming to from the principal room. coming up later today, an exclusive interview with michael roman, 3m ceo. ♪ viviana: you're watching "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. motorsn with general capping its revolving credit lines. the automaker planning to draw

down $16 billion. it is also suspending its guidance this year due to the coronavirus pandemic. chevron became the latest oil company to take an ax to its budget. it is cutting capital expenses by $4 billion and suspending share buybacks. just weeks ago the chevron ceo pledged to keep the buyback through a downturn in oil prices. we end with luxury retailer neiman marcus begin with lenders about filing for bankruptcy. bloomberg has learned no formal decisions have been made but neiman marcus has discussed a bankruptcy loan that would keep it running while it works out a recovery plan. i'm viviana hurtado. that is your bloomberg business flash. alix: thanks so much. it is time for bottom line, where we dig deep into companies worth watching. today our focus will be on one sector, restaurants. according to moody's, the u.s. restaurant industry may see

profits slump as much as 20%. here with good insight is ed eger, reward network ceo. reward network helps restaurants with funding. you've been working with small restaurants for 35 years. can you give us a hint on what the landscape is for these guys? ed: the landscape is a tough one. we've been in this business for 35 years offering market services and capital funding for small restaurants across america. it is an unbelievably difficult time for this population because these are important jobs. people arellion employed in the industry. it is about a $900 billion industry. a lot of people got their first job working in a restaurant. 60% of americans work in a restaurant at one point or another. these become the fabric of society and the fabric of communities. right now, these businesses are

in bad trouble. they are thinly capitalized. alix: no doubt. i started working a restaurant when i was 12 and i appreciate you pitch you are making. what needs to happen to keep these companies afloat and not close? ed: the things that need to happen in my mind is first and foremost, the most important thing is the safety and help -- and health of the americans. the challenge we have now is we want people to be able to go to restaurants but at the same time we have to worry about health and safety. recognizing this, we will get through this. the important thing is getting capital to these restaurants because they needed. these are restaurants that often only have a couple of weeks worth of capital available, so when they shut down through no fault of their own, they cannot reopen unless they get capital quickly.

based on our experience, there are three things that need to happen. one is speed. you need to get capital quickly -- inhese restaurants and order for them to survive. secondly, you need an infrastructure, because the programs congress is looking at right now is great, but they need to be able to get to the restaurant. restaurants typically are not sophisticated in getting this back themselves. they cannot navigate the bureaucracy themselves so they need help doing it. you need people on the ground working with restaurants directly. the last thing is you need people with expertise in the restaurant industry specifically. it is a unique vertical and it has a unique set of financials. is the traditional financial institutions do not serve this restaurant well. you need people in the fintech

space and their number of us who can do it. we have hundreds of people on the ground right now distributed across the country able to work with these restaurants and do that quickly. from my perspective, the most important thing is for congress to act to get the bill passed and allow different channels to be able to give directly to these restaurants. alix: i do not think anyone disagrees with you. i think it is what kind of strings, with any loans. do you support loans being tied to things like you cannot fire any workers? ed: i understand that for the larger businesses, the larger corporations. for small corporations it is hard to put that in because they do not know how their business will operate and they do not know the ups and downs of the coming months. none of us do. their ability to absorb that and make that commitment is hard.

i would love to see that. you want them to employ their people. when you going to a restaurant, it is like a family. the people that work in restaurants feel like family members. they work closely together. they do not want to lay anyone off. they want to keep these people going. when i talk to restaurants they are heartbroken when they have to lay people off because they have to close their doors. they are not trying to lay people off because they are trying to save costs, they need to survive and they're doing everything they can. give me some perspective as we head out in terms of how many months we can see this shut down sustained for your business and the companies we partner with before it is the breaking point stage? ed: that is a great question and a difficult one to answer. i do not have a crystal ball of how long this lasts. i think it is important health and safety gets taken care of,

and in the meantime we will see a retooling of how restaurants work and how you and i dine out or no longer buying out but get takeout and delivery. i think that is the change we will see over the coming months. everything we can do as individuals, i think of it this way -- i want to save my community restaurant because i want them to be a place i can keep going to. what we need to do is by gift deliveryt takeout, get as often as you can. you enjoy the foods you love and you are supporting the community. eager -- ed eger, i appreciate it. gold rallying for a second. could it revisit all of the

highs? that is coming up next in today's technically speaking. if you're heading out and jumping into your car, tune into bloomberg radio, heard across the u.s. on sirius xm channel 119 and on the bloomberg business app. bloomberg. ♪

alix: time for technically speaking. joining me is mike mcglone. you're watching gold. what do you see? mike: a monthly chart overlaid with the 12 month moving average. it looks like it is trending higher significantly compared to last time. you see the white line where the fed went to 08. that is a foundation for gold. it looks like gold should get above the highs of the year and the high of 1900 should be a speed bump if history is a guide with all of this printing of money. alix: thanks for setting me up

with that, i appreciate taking a look at where we are right now. ounceoming in at $1600 an , touching that old high. that wraps it up for me at bloomberg daybreak: americas. coming up on "the open" with jonathan ferro, lori calvasina. in the markets we are around the highs of the session. you are also seeing treasuries and yields take another leg higher as the selloff accelerates. if you take a look at the 10 year, yields up seven basis points. stocks up limit again in the bond market keep selling off as well. this is bloomberg. happy tuesday. ♪

jonathan: from new york city per our audience worldwide. good morning, good morning. this is "the countdown to the open." markets are looking better. equity futures close to limit up , up around 5%. come from thel spider s&p 500 etf as we bump against that bound. treasury yields higher, curb steeper, and in foreign exchange a story that goes against the grain of the last week's, the dollar weaker against the bulk of g10. there is a silver lining in washington, d.c. fantastic to be with you. it looks like we are making some progress to break the division in washington to let deliver a much-needed fiscal stimulus package. i am pleased to say weekend catch up with kevin cirilli for the latest. avin: it does appear there is significant breakthrough as a relates to the economic