surge continues. the u.s. over tops china. sorar.less claims merkel pushes back against issuing junk bonds. and finding a bottom. the dow drags itself into a bull market, posting its best three-day run in nearly 90 years. today, u.s. futures join european stocks in the red. good afternoon, good evening everyone. this is "bloomberg surveillance" on a friday, francine and london, tom keene in new york. tom, this is something maybe the market is waiting for, but the focus is also of course on what is happening in the u.s., overtaking china in terms of the number of cases without stimulus package. tom: i will say there are two

big stories here, francine, the idea in america, the spread of the virus, just getting ready of this hour of "bloomberg surveillance," you hear the sirens constant in the background here in upper east new york city.in particularne is of focus on louisiana, and the other issue, francine, picking up the debris of all the those factorsof is able market with a vix of 63 -- a bull market with a vix of 63. francine: yes, we will have a lot more on the market. first, let's get straight to new york city and bloomberg first word news. here is viviana hurtado. viviana: we begin with a major change in tone overnight between the u.s. and china. president donald trump and xi jinping pledging in a phone call to cooperate, this in the fight

against the coronavirus. this comes after weeks of rising tensions between the two nations. president trump tweeting, "we are working closely together." relations between the two sides are on a critical moment. now the u.s. press surpassing china -- now the u.s. surprising china in amount of coronavirus cases. yesterday, more than 6000 cases reported in new york. now we move to capitol hill and nancy pelosi and the house of representatives. lawmakers will move quickly, final approval for the historic to trillion dollar rescue plan. misses pelosi telling bloombergtv the house will consider additional steps to help the economy. she says the next round should include more aid to the state. we end in the european union. that is where leaders failed to rescuen economic measures. france, italy, and spain are

pushing the issue of debt issuance. germanalways led to resistance. 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. francine? tom? tom: viviana, thank you so much. i am doing a data check here, and it is the idea of a bull market. i don't buy it. vix of 65, that does not make a lot of sense. what is on the second board this morning is absolutely critical. interestegative rates in the united states of america, and the massive distinction here, francine, as we have a fed that has clearly stated they did not want negative interest rates, and we have a bid build up, yields down, which has given us a negative interest rates. it harbor of ubs will join us

believe on "bloomberg surveillance" at 8:00 on radio. negative interest rates in the united states of america. francine: yes. it is the one thing that matters and of course will move all other markets. i am looking at, stocks slipping. investors were catching their breath yesterday following a three-day rally in global shares in mid-february. treasury climbing, the dollar heading higher. the best week since 2009, but it is all about negative interest rates and what that means for the rest of the road, tom. tom: an important discussion, right now in rbc as we begin "surveillance" in the morning, to synthesize on a friday, where are we going? schaffrik is the head of global macro strategies.

we are thrilled to have you here. peter: good morning. single macrothe theme you think is important? peter: in my mind, that they question is -- what is the market currency pricing in terms of development for the corona crisis? the way that i see it, sort of speaking to a lot of people, what the speed is putting out, i think we have all digested that there is going to be a significant drop in economic activity. it does not really matter how big it is. we just know it is big. what we have no handle on is what is the one debbie other. i think the market is in playing we are following the chinese playbook, that we will shut everything down after about three weeks, the case numbers drop off, and after two or three months, we reopen. ,r, according to your president maybe even earlier than that. if that is a two-sided assumption, i think that is a downside to the risk assets in

particular. target,you have a macro and, folks, there is also research out there this weekend, a wide opinion, but peter, that general statement, i am seeing equity strategists, security analysts bringing down the price targets, let's a 20, 20 5% as well, where do you bring down dow, 20 9000, given the greater macro economic view? in 10%, 25%, or more? been: well, we have bringing our targets down as a firm. again, i think it is, you know, it is a moving target, to be honest. ,s we have been seeing volatility is extremely high. it has been coming down, and i think it will stay very high, but again, i want to come back to that point in my mind, it is willrative shift, and it dictate, particularly where it

is going, and if there is more to come here than the market is in playing, i think 10% is not going to cut it. francine: peter, good morning from london. if 10% is not cut it, what will cut it? peter: well, again, in this situation, everything is very dependent, in my mind, on the longevity. if you tell me what the longevity is, then we can talk about numbers, because if we are in this for, let's say come another year, then the targets are very different. i think one of the reasons why the market is failing so much, you know, i cannot predict that, and therefore i think it needs to be somewhat of a rolling target at this stage. francine: peter, give me a sense of what markets will see, this volatility, we had jobless claims the figure was staggering. even if you have the virus bill but the stimulus does not reach the people, are we going to see a sharp correction?

because at the moment, everything is theory. now we need to make sure the cash reaches the right people. peter: that is absolutely right. we think there is a very decent chance that the numbers released yesterday, even understating the two, one of the other key elements that we are still waiting for courses the details, the main street program that the fed has promised, there is no way of trying to get to the real people, and we have to believe we will have to see how that is all going to work, not only in the u.s. but also in europe. you know that yesterday in the u.k., they announced another way to give money to self-employed people. there's all these programs being talked about, and though i -- and nobody has any idea how they work in reality at the end of the day, and i think there will be economic hardship, and there will be some companies that do not make it. and we thank peter

forffrik's colleague, tom, all of the numbers that have come out. tell us what your hydrocarbon experts say? canada is flat on its back. give us the ppo of the saudi russia price war. what does it look like? peter: on the one hand, for all of the producers of oil products, is not only battling the virus, you are also sitting on utter low oil prices that are being hammered not only by the demand but also by the price war. i think we will have to accept that oil prices, energy prices will stay low for quite some time. even if you can resolve the supply side of the equation, because the demand side is just breaking away, and that of course is negative for not only canada but all of the others. well, if we have got demand

and structure, a supply shock, the oil shock, and that we have the viral shock as well, it ends up being a demand destruction," every research note, peter, is a macro view of duration. how do you frame duration of the slowdown of rbc capital markets? is it in months, quarters, or can you go out to what some are talking about, which is a six-year, seven-year glide path back to normalcy? peter: first of all, when we zoom in on the virus situation, i think it is very, very unfair man that is currently in the here and now the biggest driver. the market is working on the assumption that we will probably have a three-month -- it might be longer. it might be 6, 9, or even a year. and if that is the case, it is very difficult to see the economy coming back. particular,rices in

again, you know, we have demand and we have supply-side. supply-side is going to be seriously disrupted or rather ballooned by the oil wars. and it is not very clear to me that this is going to end very soon. there is no indication as of yet. you soe: peter, thank much, peter schaffrik from rbc capital markets, where he is global macro strategist. he stays with us. you should also stay with bloomberg, because later today, we speak with not one but two o fed presidents, we have the dallas fed president robert kaplan and the atlanta fed president, raphael bostic. this is bloomberg. ♪ this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york. the we were talking about jobless figures outside of the u.s., peter schaffrik saying they were awfully underestimated. this is what i want to focus on now -- eu leaders yesterday struggling to agree on a strategy, the fallout from the deadly virus. let's get back to peter schaffrik from rbc. peter, i do not know if there were two any expectations about some kind of joint bond issuance, that actually germany was still not behind. peter: well, we have seen this movie. every time there is stress in the sovereign market a particular, the call is to issue joint bonds, and every time, predictably, the germans, the dutch, the austrians say, "no thank you." the question is for the european

finance ministers to come up with a solution, but we know what the solutions are, to come up with something entirely fresh. i am wondering if the outcome is going to be any different this time around. francine: ok, what does it mean going forward? will the eu have a strong enough response to pick up markets, or is the ecb doing enough? peter: well, i think the ready wrapon of a response is to their hands around, and when you look at the press release that merkel, for instance, put out yesterday, she said this is the preferred vehicle that the germans want, and i suppose the austrians, too. you go the path of least resistance, and that is the vehicle that has been used before, and i guess we will see where we are going to end up. i do not think we will see joint issuance corona bonds anytime soon. tom: this is really interesting.

i know wolfgang and the ft have discussion on the importance of this. what is the power that the smaller nations have? what is the so-called power in negotiations that they have with germany, the never learns -- the netherlands, and austria? peter: well, one of the things you have seen before, if follow the playbook of the previous crisis, you might be able to resolve the crisis in the here and now, but we have backlash after. i guess we do not want to sort of go through that again. one of the things that occurs, for instance, quite a significant amount of the financial support going through, the northern europeans are now taking patients from the stress, countries from the south, they are flying them over. so you see these types of

things. but they are trying to be proactive. again, when it comes to the jointof money and issuance, i think ultimately it will be exactly the same as it was in 2012. not going to happen. tom: do you suggest that europe has the taxing capacity to take presumed deficit coming our way? there is a belief in america that we can tax our way out of everything. does that belief exist in europe? peter: i am not quite sure, because when you look at what is happening, what you see is ultimately where we are currently ending up is that the massive increase in budget deficits that we need to support the real economy in the corporate sector, and to some degree in the financial sector, is going to be fought by the ecb. and that we have seen in the previous experience, i mean, the ecb has not even tried to bring the balance sheet down.

it has not worked down so well. i reckon it will sit on the central bank balance sheet for quite some time, even though the european is fairly calm, we have monetizing for some reason. but you can change the treaty, peter, and i guess we become much more like japan, right? if you look at how much japan has, they are fine. peter: yeah, listen, i am not suggesting that this becomes an imminent problem, you know, as you were saying, they can run around with these significantly large central bank balance sheets for decades, and i reckon this is one of the ways how we are going to do it, too. and by the way, changing the treaties is very hard. i do not think that will happen very quickly. are wee: and, peter, going to see more of a united front, you know, in terms of cooperation? we focus so much on the monetary

fund, on the stimulus, and, you know, the lifelines for the company is alive. are we going to see much more of an effort to tackle the pandemic together? i don't know whether it is changing resources or sharing of or money being poured into our hospitals? peter: on the latter, that is currently what i do see, and i was just pointing out there is no more corporations just in terms of bringing patients across borders. but also in the statement lien -- van ndor der leyen mention keeping the borders open and to cooperate, but there is more money being again, ifo r&d, but the bank stops, finance shuts down, right? so much,r, thank you peter schaffrik with us with rbc capital markets.

two to talk about here, and incredibly important fed interviews, focus on atlanta, atlannorthern louisiana part oe texas district, the dallas district as well, all of this put together for you on the terminal. please consider tv , all sorts of ways to take in our conversation here, at "bloomberg surveillance," but i really recommend tv for those with a terminal, as many of us are working from our homes. we continue from london and from new york on this friday, this is "bloomberg surveillance." ♪ ♪

viviana: you are watching "bloomberg surveillance." i am viviana hurtado. let's begin with the bloomberg business flash. volkswagen and the unprecedented shutdown, cutting $2.2 billion a week. sales in china have effectively come to a standstill. can endure theey factory shutdowns for maybe months but not indefinitely. barclays trying to whether the worldwide slowdown in travel. several hundred million dollars. it would yield about 12%. hertz has also asked the treasury department for a loan. we end with the american airlines, set to get $12 billion from the giant federal government rescue package.

ceo doug parker telling employees he does not expect the terms of the bailout to be onerous. for april, canceling 60% of its flights, 80% for may. and that is your bloomberg business flash francine, tom? tom: viviana, thank you so much. let me do the data. it is important to consider across equities, bonds, currencies, commodities, there's one single story for global wall street, and particularly for those in america, and that is the very great difference of negative yields in the united states versus have negative yields have been treated across the continent of europe. without question, the data point this morning was a new bull market, the vix at 65, and after that, the inside baseball, a negative yield for three months, 90-day treasury. francine, that is next ordinary moment for the treasury and for new york. francine: yes, it is exported mary, tom. the recent -- extraordinary,

tom. willecent revival certainly be tested by the continuing coronavirus, also the crippling effect it has had on business closures. yesterday, i was quite struck by the fact that the u.s. has overtaken china for the most virus cases worldwide, fueled by this large jump in infections in york. european stocks -- in new york. european stocks slipping, also a touchdown. i think a lot of the strategy to contain the fallout from the coronavirus here in europe was a struggle, so it left key details to be ironed out in the coming weeks. coming up, we will be speaking to pierre most ovi tree -- two pierre moscovici. we will ask what european leaders can do. ♪ rs can do. ♪

♪ good morning, good afternoon, good evening, depending on where you are. this is bloomberg

"surveillance." focus has been on the disappointment about what happened with e.u. leaders yesterday, struggling on a concrete strategy to sustain the coronavirus in terms of bond issuance. i am delighted that we are joined by pierre moscovici. you for joining us. if you look at debt sustainability countries such as italy and spain, they have been on an unprecedented spending stray -- spree. do you worry there debt will not be sustainable? pierre: i am not thinking that way. i am thinking about the italian and spanish people. people are going

to lose their job. thousands of people are dying a day in spain, which will have a recession, which will be bad for 2020, and a loss of growth that can be long-lasting. our societies are not accustomed to contain them. let's not talk ethically about the systems. if something like a reconstruction after a kind of a and not only for monetary policy, whatever it takes must be done. that is why i cannot understand that we can have technical and financial debates. each of us have their own interest but we must have unity

and collective diligence. youcine: i was going to ask -- two weeks ago the finance minister to laded up -- leave it up to leaders of the e.u. to plan. mark comprehensive you disappointed that we do not have collective action? pierre: i am not disappointed by yesterday's committee. plan. you disappointedit paves the wae ambitious response that we absolutely need, and this response must be on any policy issues. see there is going to be a huge amount of liquidity -- has been suspended, and this never happened before. it is not only flexibility.

if a country spends money for coronavirus, it is not only about health but about the economy and society as a whole. seen in a more flexible way because there will be some naturalizations of some countries -- companies. every company including germany is issuing debt and that is why i think we must have a comprehensive response. why not? this has to be considered. you need to show solidarity. all are not equal when issuing debt and there has to be a capacity that will be getn to spain another's to a reconstructed economy to their society that will be weakened by

all of the death and destruction. tom: pierre moscovici with us. i just want to say in new york on the upper eastside on fifth avenue by the acclaimed mount sinai hospital, and the sirens we are hearing on this friday morning, early friday morning in new york, are absolutely unprecedented. i have never heard sirens like to septemberack 11, but nothing like the constant drone of sirens we here in new york. robert kagan in the washington post this morning with a trenchant essay on the 1930's. as we look in europe and worldwide for coastal -- cohesion, which institutions in europe will provide the needed cohesion to get differing philosophies, differing nation views on the same page, given

the shock? pierre: i understand what you say about hospitals. we see that now exactly the same and it is more striking because the sirens, there is silence. there is nobody in the street. it looks like the kind of wartime. for that, talking about collective intelligence, will not have alongside. we must not be shortsighted. the nations plus common institution, this would be the leader and all of us need to bring a collective answer. [indiscernible] and having a much more ambitious budget.

it has to be about priorities. we must invest in the future, in , because weronment see europe, we are not up to the page. we must i think reconstruct the globalization. it is not something that will end with globalization. globalization will have to change. the gig economy, we cannot depend on medicine for our vaccines from china, we see that. we need something that is more local, society that is more sober when it comes to energy. if we change the way we work, we are working at home, that does not mean we will stay here all our lives, but i think things will be different in the future. we can do some things, i hope. let's be ambitious.

i am not talking about a single institution but all institutions and citizens themselves, because that is about democracy. tom: let's continue this discussion with pierre moscovici , really important to begin our "surveillance". president donald trump has a new angle in his back to work drive. rankld governors they will counties according to their risk of coronavirus outbreak to help aboutities make decisions relaxing social distancing measures. steven mnuchin wants to keep financial markets open, saying there is a consensus that trading in stocks and assets continue, and he is focused on helping mortgage firms the economic -- mortgage firms.

we end with this label -- a racist cowboy. that is what nicolas maduro is calling president trump being indicted on drug charges. he warns he is ready to fight should the u.s. and columbia dare to invade. the u.s. is offering a $15 million award for information relating to his address -- arrest. 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. tom: these are two exceptionally important fed interviews today, newael mckee spanning orleans, raphael bostic of the atlanta fed and mr. kaplan of the dallas fed. virusana has a difficult friday.

this is bloomberg. good morning. ♪

♪ "surveillance." even working from our homes, it is always time for a " surveillance" correction. we can do that at the keene household as you hear from baton rouge, we are more close to baton rouge, the atlanta fed district i should say where shreveport, louisiana, over and mr. kaplan, michael mckee with those central

bankers. bring pierreed to moscovici with us. what is met on lagarde's next step? -- madame lagarde's next step? basically, they are doing what they can and what they must do. i will quote mario draghi, whatever it takes. the problem with this crisis is we don't know precisely how deep it will be and how long it will be. we see it will be deep and long but not how long and how deep, so we must be equipped and ready to do whatever is necessary in order to make sure that our ok, that our societies are holding, that our firms are supported, that people

who are threatened in their jobs or their residence are also backed. ,entral banks, fiscal policy structural policy, state aid policy, financial policy, all of them mobilized. what we design and the priority for the future as far as policies are concerned will be designed because there will be enough after the coronavirus, the world will not be the same as before. it will not be business as usual. we must not think business as usual. let's not concentrate that much on technicalities. we are probably changing the world. it is not going to be the only time in the only way it can happen. -- and the only way it can happen. francine: how many companies in europe will have to be

nationalized or partly nationalized? pierre: it depends on the depth and length of the crisis, but again, to repeat that, whatever it takes. i am french. i don't know which companies will be nationalized. there are other ways of nationalizing, but some car strategy and some companies are already in difficulty. if the recession is so deep that the markets change drastically in the future, then we will have to consider it and for that we must have no taboo. to command day by day what we have to do. we must be really in the flux, capable to adapt and be reactive individually. when i look at europe, i see three things we need to show.

the first is solidarity. when europe is suffering as bad economically, socially, we must be there. so, but no, we must do what is necessary. time for division in that kind of era. division is ridiculous. we must think already about the future, about the day after, and the day after will not be like the day before. all our institutions must be mobilized and ready to act. i cannot tell you how many companies will be nationalized. some will have to be nationalized and those that will we must notnotch --

be shy about that. thank you so much for joining us, the former you could measure for economic and financial affairs -- e.u. minister for economic and financial affairs. coming up, adair turner. we will discuss what the boe has done, some of the loans and , atts given to businesses 6:30 a.m. new york, 10:30 a.m. london. this is bloomberg. ♪

♪ this is bloomberg "surveillance." general motors is moving to cut costs, freezing work on new vehicle programs, deferring pay for white collar staff, and management will take pay cuts. the pandemic has closed factories. larry fink is bullish on the stock market. he is telling clients now is the time to get back into equities. he stresses his view is mainly

from all dutch long-term investors. a partial victory for goldman sachs in a 14 year battle on gender discrimination, a judge goldman can force into arbitration almost 700 women suing the bank, claiming goldman was allowed to make biased pay decisions. goldman calling the claims meritless. that is the bloomberg business flash. i, jon ferro,and lisa abramowicz, paul sweeney, we are committed to speaking to true experts in the variola she dutch virology and vector allergy -- virology and vectorology of what we are dealing with. we are thrilled to get an update from steven riley. , it is an epicenter.

, and all of ake sudden we speak of atlanta and new orleans. going back not in this 20th 16thry, but 17th and century studies, how do viruses spread? steven: it is difficult to be absolutely sure. what we are seeing in large countries like the u.s. is probably quite a few independent seeding --ents ing events and a slow build. it is becoming prominent in some cities before we get the same reports from others, probably due to aseeding and a slow build. tom: on youtube, there is a

spectacular video on number file, which is three differential equations showing the dynamics that professor riley is expert in. where are we in that continuum right now in continental europe, london, america? where are we in the mixture of those mathematics of contagion, of size of those affected and of deaths? ,teven: we are unfortunately probably the u.s. and the u.k., in the early exponential phase where it is rising as rapidly as possible. the models assume we do not have large behavior changers. -- changes. the peaks in china and south korea in a came much earlier and were much lower than those simple models would have predicted.

riley, there are a number of studies, almost hundreds of studies each day saying the virus may not be as severe as we think it is. you were worried about that. are you worried because it is not true or because people do not stay at home? steven: true and false is a tough thing for a scientist to say. there is a lot of evidence and it is difficult to synthesize. we have done a lot of work. this is a very severe direct -- virus, much more severe since any flu since 1918. we can chat about the different bits of evidence and the fact that we do not have one perfect, clean study that shows it in a couple of numbers, that is not a good enough reason to pretend it is not a severe virus. francine: who should we listen

to as experts, the world health organization? is there one source -- and is there questions once you get it who can answer them? steven: the world health organization is a great source for the severity and types of interventions you should be taking. they have been clear for a long time. you can see their china intervention report. things, wethe other have to accept a fear of genuine uncertainty. we have known about this virus for three months and i wish i could tell you i knew for sure how long. it will be long enough, but how long it lasts will be difficult. tom: one more question, let me bring it to the emotion in washington and across america. we have a president who wants america to get back to work

going county by county and the son of a real estate developer figuring out how to manufacture ventilators. how do we get the emergency out of the administration that matches experts like dr. fauci and yourself? you have to ask them why they think it will peak. the cases are going up and going down. why do we think it will peak? if we are doing good interventions and they are working. we cannot try them for a little bit and hope they work. we have to keep them on and see they have worked. otherwise, i don't know how people would expect the peak to be soon and low. those are my concerns. riley atessor steven imperial college, one of the experts on infectious disease

dynamics. we will move forward from strength to strength, and let me do a data check first. the data is simple, south on futures. across equities, bonds, currencies, commodities, and adjustment to the shock of the labor report yesterday, there is no jobs report on this friday. i believe we get that in a week. coming off of the data of the morning and much more on the larger view, we speak with catherine mann of citigroup on the global economy and the shock of this continued pandemic. from london and new york, this is bloomberg. ♪

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change, first manhattan and now louisiana, new orleans. nationwide, doctors are desperate for ventilators. and puts house stalls the manufacturer for more out to bid. stocks are a bid. a new bull market, but can you have a bull market with a vix of 65? senator sanders gets his fondest wish. we consider the prime minister of this -- permanence of this income replacement. in this hour, catherine mann of citigroup. from new york and london, this is bloomberg "surveillance," from all, an exhausting week. interestingreally and the politics of europe and washington, and titanic