vonnie: live from new york i'm vonnie quinn. this is bloomberg markets. get right to the markets in the u.s. because we are seeing a continuing deterioration. the s&p,s in a d.c., all down by 2%. s&p 500 did have a couple sectors in the green earlier, right now the only two are the retailers and the semis and semiequipment. retailers up 1%. we have energy down about a percent even as we get that 10 barrel a day agreement. crude oil is only up nine cents. get more insight "on the markets" as investors prepare for earning fees marked by the extraordinary uncertainty over corporate profits. lisa g us on the phone is abramowicz, senior analyst at ubsf financial services. the fact that the junk bond index on the screen anti-yield has come in lail bit thanks to

the actions. not just high yield indexment many of these outliar assets are showing a little bit of relief i suppose you could say. what does that say to you at ubsf financial services? lisa: i think it's very important that the fed did what they did. obviously after easing tremendous amount of of keep interest rates low, financial conditions continue to tighten f you don't have access to crede at this time creates a problem. to prevent unnecessary insolvency we think is very important going forward. we think the fed action is positive overall, but we don't think this is going to be just a straight shop upward. we do anticipate continued volatility for the less of the year. lisa: if that's the case -- vonnie: if that's the case would you hold your fire or start looking for places to put some of the dry powder to work? lisa: we had come in to this

recent fed policy and fiscal stimulus long high heeled. markets had gotten to the point where they became so bad it quickly, spread quickly and widened. for an investor you are really compensated. in that scenario right now we wouldn't sell high yield even though thursday we saw one of the biggest moves in a decade with high yield returning over 3%. with the spread coming in about 150 basis points. we are holding the position. if the market continues as volatility comes around and we go back to the near spreads the high yield index at about 1100, we would look to add. this is not a leap-in scenario. you have to go across average. more importantly your holding period has to be longer because there is too much uncertainty. vonnie: what is that in terms of length? your holding trade. lisa: -- vonnie: the pandemic will get better or rebound, right?

lisa: i think that's great point. financial markets have a measure of return. this is extremely difficult time. a huge range of uncertainty. we don't know when this will end or exactly when the economy will stay open. when that happens which we anticipate in mid may it will be a process not an event. the holding period has to be a little longer. maybe 12 months. again to your point, we just don't know. vonnie: earlier on we were speaking, the federal reserve, he thinks we are going to avoid inflation for the time being but we very likely won't avoid disinflation. how dangerous would that be for the assets? lisa: i think the market was actually -- if you look at the inflation rate, you had two shocks. one from the shutdown and another from the price war.

if you look what the market was pricing in, at one point it was pricing in over the declationary scenario. our outlook is one of the reasons the fed is able to move as quickly and largely it has is because inflation hasn't been a concern. going going forward, because -- to your point, we all own treasury inflation securities. that's not because we believe it will be grown to the demand side, could you have supply side shocks which is a tax to the consumer. a tomorrow, six orrow, month, overtime we think inflation may move higher. we don't think it will be a large concern in the next six to eight months. vonnie: what are you liking now at u.b.s.? >> overall we would have the credit side over the equity side. we kept your point fairly conservative. we are neutral fixed income. neutral equity. we don't think this is a time you lean in.

but we like asset class that is offer fairly good field if you are compensated for that given the market sentiment had shifted poorly so quickly such as high yield. on the equity side, we do have a tendency, we are neutral on the equity side in terms of our asset allocation, but we like consumer services over technology. we do think that this will be a gradual rise higher, but the question's not how poorly the qui will be in 2020, but really if in fact it does recover in 2021. vonnie: you talk about credit. do you think the fed will need to extend crede snit it talks about credit being available. and that it will get involved if necessary. what do you think will be the necessity of this? the idea that it will has caused conditions to ease a little bit. lisa: it has. the market's got in front of itself a bit. the market's pricing on fed action. and there is still more they could do.

they have the money to do so. i do think the market relies on the fed to continue to put policy in place, to unfreeze the credit market, loosen financial conditions. that's what i think they are looking for the market to do. i don't believe, again, this will be something that will be a linear from now until the next six, eight months given there are unknowns. the market is relying on the fed and the coordination of the global central banks to continue to loosen financial conditions. vonnie: what will be the next action that comes from congress? quheas needed now -- what's needed now? lisa: that's a great question. i think you might move in terms of we have -- we have a lot of fiscal stimulus. i do believe at some point in time mortgages, mortgage services industry is going to have to take a look at t obviously as we know the mortgage service industry has been under a bit of a liquidity

constraint geffen the forbearance, they have short-term cash flow uncertainty. i do think that will be part of what we see in terms of going forward is look at the mortgage market and consumer. vonnie: we have been talkingle ole it multifamily homes, if looks like rents are being deferred or not paid by people in residential buildings, but when it comes to commercial rents we are seeing those hold up quite a bit. does that give you sense for what the economy might look like when we do reopen? will we see broad changes to this kind of an economy? or will we go back to what we knew? lisa: fortunately both the residential and commercial market we are in very strong hands coming into 2020 and before the fires hit. we had great depth. equity in the commercial market. low cap rates, faults. same with the residential market.

household balance sheets were strong. these are all very good signs to see. however, again, given the magnitude of the shutdown, give the magnitude how much this may affect real estate, that's one investigator to see in the multifamily. but i don't believe that this is going to be something that's going to be -- that all going to be well in the world. i think there will be a lot of volatility. you won't know until the economy opens up. fortunately we are in very strong hands coming in. vonnie: thank you so much for your time. leslie falconio. time to check markets. a deep dive. >> i want to take a look at across that board earlier as you were noting the s&p 500 more than 2%. sort of deteriorating as the market open continues. they are selling 10-year yields. yields getting left here by about two basis points.

there is a little of buy back into the vicks. 44 is still relatively nume relative to where we have been in recent weeks. that means everyone is selling, going into the bloomberg dollars you can see up marginally here of almost .1%. we know the story today is about crude. it is up 1%. as you can see erasing some earlier gains we were seeing. i think you and all your guests have argue 10 million barrels a day does not cut it when you have seen demand destruction of 50% to 70% or so. at the board again look at fun flows. this is interesting. you have four straight weeks of inflows into l.q.d. the second largest inflow of any e.t.f. we have seen last week. and a lot of investment grade demand you have been seeing by what the fed is buying the last week had the last week since march 27. that's when it was up 9%.

march 27. that week l.q.d. was up 15% for the best week ever. you are seeing some strength here within l.q.d. i will look at the board and take a look at some of the individual stocks that we are following. caterpillar is one that i will mention. they are getting cut here as you are seeing a lot of exposure to energy now means that banc of america, merrill lynch, turning bearish. vonnie: taylor, ending on a note.

vonnie: bloomberg markets. >> joining me on the phone is the saudi energy minister. his royal highness. following that historic deal in

terms of thee cuts, it's the most ever. on top of that it ends the price war. your royal highness, thank you for joining me. we had this historic deal, yet the market seems to be shrugging it off. we are seen nymx crude around $23. brent north of $31. do you think it wasn't enough? [no audio] i'm sorry. we might have lost you there. if you can hear me -- >> i'm sorry. put it -- my mistake. >> i wanted to ask you about the market situation. it seems that they are shrugging off. it was historic, largest ever in terms of cuts to end the price

war. but we are seeing the market relatively flat. -- this is only talking about what we are doing which is 12.5 million barrels when you take the 9.7, plus the addition we put from today our production and output. and another million from d.o.e. and another 500,000 from kuwait. ou will have a less of a total 12.5 million. members, 0 we, many including including the invited to pull out

approximately seven million. it would be 19 something. 19 1/2. will make an e.a. announcement of some -- wednesday. half of which would be -- part of it would be production. and part of it would be two months program to enhance the s.b.f. maybe the fact is also that last week you had quite a marketable improvement in prices. he good old you buy into the umors and challenge to the acts or the news, is here. i'm quite sure that it's the other producers come through

with their -- theirs, will you have an incredible number which i don't think anybody ever thought the whole world would cooperate. >> market seems uncertain and quite fragile when you look at the demand side. do you think you are going to have to potentially wait off on tapering and cut deeper in june? >> we are keeping all options open. think the new spirit and new arrangements, including cooperation with the other producers mindful of their national circumstances including the new spirit within opec and trust what else to demonstrate,

then this is a way to show the whole world that we are here, up and running, and acting responsibly. with that in mind, it doesn't take a hero to predict that this be it rrangement genetically created as a result of this extraordinary situation would not also be attentive to any further -- we are still hoping the situation can be mitigated within the next couple -- or hs or less uncertainty will prevail as opposed to more certainty. i hope that once we turn that rve away from the descending curve, things will be a lot better and things -- in terms --

i believe i can speak of saudi arabia that as long as all of are rtners outside of us ready to do anything necessary. we would be the first to commit and last to abandon our commitment. >> just five weeks ago you and russia were headed towards quite nasty divorce. where does this leave the relationship now when all is said and done in two years, could we see another price war come back? >> i will carry on with your method. i wouldn't call it a nasty divorce. like any family they go through differences. but usually families they keep it to their inner circles and indoors.

it all depends on the family. is ond of this family strong. and like any time, they go through reservations. it actually improved the resilience of any family once they go through some troubling time and sort it out. 'm happy to say that we are up and running as a family we are more resilient and much more strong. whether any potential crisis emerge in the future. >> is the united states now part of this family? disappoint. we don't need any divorce stories. >> i want to know who is the most important people in the

deal? we have seen president trump tweet a lot about it. are you surprised that an american president is pushing for higher oil prices? job to defend the president. i will have to be fair to him and speak up with the truth. it this week, at which is creating jobs and communities, creating growth, creating income, creating rosperity big contributor to g.d.p., creating service sectors it's e protective and well-being looked after. i hate to see any president of any country who would not do that job. >> i want to ask you finally

about mexico. thursday evening we know the mexican oil minister, she walked off and left. tough negotiations. they ended up having a bit of a diplomatic victory, only cutting 100,000 barrels a day. are you worried what kind of precedent this would set for some of these smaller producing countries? >> no. he didn't walk out in the -- with the meeting. she had other things to do. but the next day she was with us at the g-20. and last night she attended the meeting. in fact she was gracious enough to ask me as being the host of the event whether if i can agree to the terms and conditions of told her i t, and i will go with the consensus. one of our oversights in doing

these is we did not look at the agnitude of the situation. the cut that we asked mexico to o. what we have agreed with them now is not the end of the story. we agreed for the two months to develop. we are still going to be talking with them on certain ways and means of enhancing their commitment and obligation. wever, they have their own issues they are mindful of. i must confess there was a bit of a reverse side from us in that area. but i have no doubt i would not question the commitment, i would not question the -- they can do whatever they can do if it is

within the ability of the government to do according to their constitution and their government structure and relationship between the government and the others. >> thank you so much for your time. i know you have a really busy last few days. that was his royal highness, the saudi minister. crew trading ad 31.62. bloomberg, back in two minutes. ♪

>> from vonnie: live from new york i'm vonnie quinn. this is bloomberg markets. only very, very few stocks are higher today. amazon being one of them. it is a down day for u.s. equities. 2% apiece for the dow jones industrial average and the s&p 500. the nasdaq, it's down from us .9 percent.

elsewhere we have treasury still in their range. the 10-year around 74, 75 basis points. the dollar index at 99.53. vicks slightly elevated but still around 44.15. and crude oil up 20 cents. you heard the saudi oil minister talk about the agreements. stocks tried to railly on the agreements but didn't make it through the morning. we are starting the week off on a negative note. stocks in europe are not trading, it's a public holiday. more next. this is bloomberg. ♪ these days you need faster internet that does all you

expect and way more. that's xfinity xfi. get powerful wifi coverage that leaves no room behind with xfi pods. and now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device that's connected is protected.

that's a $72 a year value. no one else offers this. faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. can your internet do that? welcome back to bloomberg markets. i am alix steel.

you heard the saudi arabia side of the oil deal, now let's hear the u.s. side. scott, good to catch up with you. your thoughts on the deal. alix. thanks, i want to thank the president for getting involved with putin and mohammed bin salman and bringing a historic deal to bear , a nine .7 barrel a day cut. the sad thing is it is probably not enough. i was surprised how the press releases to amount of the g20 with regard to the u.s., canada, and brazil, it was a week 3.7 million barrels a day. no cuts. 5 million from the g20. no cuts. that should have been the finishing touch if they would've put that part of the deal together, it would've been a homerun. oil prices are up a few pennies.

we needed something more than 10 million barrels a day. -- alix: how much will you cut in relation to this deal, voluntary or involuntary, it will you cut extra? scott: we are testifying tomorrow to the texas railroad commission and are asking for a 20% cut. we probably faze it back like opec has. it is one month at a time. we are still asking the commission tomorrow for a 20% cut for the first month. as you know, may and june are the worst month. it is a high storage. all of the cuts you are hearing about from eia and the u.s. and canada, it will take a long time to see those cuts. we need immediate cuts over the next 60 to 90 days. .e'll be asking for 20% cut ,lix: the last time we talked

you and parsley had put this delight, asking all texas players to cut 20%. i asked how you felt and you do not seem totally optimistic. now you have the president behind the cuts and the global oil community, what is your read on what could happen? scott: it could go either way. we have the same amount of pros vs. cons. it was about 50-50. we feel bad for the medium and small producers. they will be totally disadvantaged when storage does get hit. a lot of the companies will not get the crude oil the gulf coast. most of them will be shut in. we are doing it because of waste. today you see the $23 for wti. we are getting six dollars last. it is called the storage effect. we are getting $17 for midland and $11 to $12 for delaware.

selling oil at that price is a waste and that is what the commission started in 1929, preventing waste is why they made their decision in 1932. isx: does this deal as prices?single-digit oil scott: i think it still could. i think the 9.7 million barrels will not be enough. it is late. sat we had to go through the last six to eight weeks since the meeting in vienna. we lost 10 to $15, and we need to take the next step. the g20 needs to come through on true cuts, in my opinion. can you give us insight into how quickly you can turn on and off production. tamari testify the texas road commission, everyone cuts 20%.

when does that come off the market? scott: we are looking to start may 1. i would also tie it to the health -- it is important to tie to brazil, tied to canada, asked further g20 health. i would hate to see texas do it by itself. tie it to the g20. let's get a bigger cut, let's get the price of oil backup. we need $30 oil to save the industry, not $23. alix: if you take a look at the curve, many analyst see short-term prices out of luck, but if you go down the curve, this cut could mean higher prices later, 2021, 2022. if you get $30 or $40 oil, do you turn production back on? at $30 oil you will turn on most of your margin

wells. that is coming off at $16 oil, most of it. if you get back to $30, you turn most of the production on, a lot of the small and medium producers that have the wells, it saves their lives, it saves those companies. the $30 oil is so much more important than $20 to $23. that is why it is important to continue the cuts and get a true cut out of the g20. stark has has been so been the relationship of president trump to this deal. have you talked to him? what is your relationship like? give me insight to how he turned around from we like low oil prices to intervening in the deal. scott: i have not talked to him but we have sent several messengers. the industry has, both through treasury, through d.o.e.,

through our senators. we sent several messages about how important it is for him to get involved in this industry. it would be nice if it happened three or four weeks ago, but the cut of 9.7 will not help the situation in the gulf coast. it will fill up by may 15 and we will see low prices, at least for the next 90 days. alix: good to catch up with you. thanks for the insight. , ceo of pioneer natural resources. we want to get you caught up on what is happening outside the business world. here is ritika gupta with first word news. ritika: there are now 70 coronavirus vaccines in development and some are being tested on human trials. is onethest along developed by the beijing institute of biotechnology. two american companies are testing vaccines.

it could be a make or break moment for international economic policymakers. the imf and world bank hold videoconference meetings this week. they are under the gun to ease the impact of the worst peacetime recession since the great depression. the lack of force could set the stage for damaging debt default. in germany, there are signs the infection curve may be flattening according to data from johns hopkins university. coronavirus cases would increase this month. angela merkel is scheduled to meet with regional officials on wednesday to discuss how restrictions can be eased. there has never been a deal like this in the oil industry. the world's biggest producers have agreed to cut output by almost 10%. it took a week of negotiations involving the opec-plus coalition and the group of 20. there is still question of whether the deal will be enough to shrink the worldwide glut of oil.

global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. am ritika gupta. this is bloomberg. ♪

vonnie: breaking news. deaths in new york from the coronavirus have passed 10,000. 10,056 dead in new york state from the coronavirus pandemic. perhaps better news is fewer people passed away in the last 24 hours. nonetheless, a horde of thick 671 -- a horrific 671 passing away on easter according to governor cuomo. 671 deaths in the 24 hours since this morning.

totalbts bring new york's to 10,056. let's get more insight on the coronavirus pandemic. earlier today, bloombergs tom a doctor at the johns hopkins bloomberg school of public health. we asked why some people with a virus take a sharp turn for the worse. there is aeard moment midway in the illness where some people get quite sick comment at that point can proceed to death. -- that is scary for the medical team. it is a terrible tragedy in every case it happens. i think what people are wondering is if there is something that can be done to focus on that moment in terms of their unix -- in terms of therapeutic to prevent an overwhelming immune reaction that is leading to that second decline.

tom: help us with the idea of a secondary or reinfection. this is something out of the influenza of 100 years ago. you think it is a valid worry for our listeners and our viewers, the idea there is a virus and we reengage with society and we come up against the same virus a second or a third time? dr. sharfstein: there is a lot we do not know about this virus, but in general as someone who has fought the virus often recovered is unlikely to get that infection again. it would be unusual for that to be the case. even the reports of people who may have recoverable virus later are not quite the same as saying people can get sick twice. i think we will have to see what the data is, but it is probably a reasonable assumption at this point that people who were reasonably sick and got better

are unlikely to get that sick again. : the prime minister was exceptionally eloquent about the nurse from new zealand, and i believe the nurse from portugal, who he literally said kept him alive. give us an update on what you see at johns hopkins among the staff, and the nurses and all of the others assisting the doctors. dr. sharfstein: it is an incredible dedication at johns hopkins and elsewhere. have felt this is their calling, this is their responsibility, the medical center has been very supportive in terms of making sure their protective equipment and all kinds of other mental health staff, it ispport not just the doctors and the nurses. there is a sense of purpose for everybody working there. way many moment in a

people have been training for, even if they did not realize that at the time. tom: one final question. the great fear is that things in new york have been quite horrific. what is the ability of this virus to spread to secondary cities and tertiary locations across the nation? dr. sharfstein: what is remarkable to me is how so many people believe that what is happening there somewhere else will not happen here, where i live. nobody should have that kind of confidence. it was in china so it cannot come to italy, because it was in italy it cannot come to the u.s. it can go anywhere. any city could be affected. letting your guard down is a terrible mistake.

in baltimore and washington and other cities are seeing increases in cases. they realize how much is at stake and i think we will be in touch with people in new york and learning a lot from new york's experience. the cities that think they cannot have this problem are risking a lot. vonnie: that was dr. joshua sharfstein of johns hopkins speaking with us earlier. i want to point out that according to governor cuomo in his daily news briefing, the death toll in new york is 10,056 after 671 people passed away easter sunday. , it is an improvement the first day under 700 in several days. this is bloomberg. ♪

erik: welcome back. with earnings season set to begin, investors have many questions about markets, credit, distressed investing. with me on the phone from los angeles's howard marks, the founder and cochairman of oaktree capital. in your lows -- in your most recent memo you said now is no time to be cautious or a time for investors to be defensive. how offense of should investors be? things are changing so fast nowadays, you are quoting from a memo that came out a week ago. when it starts with the word now, we are talking about then, not now. these change radically. clarify that what i was saying -- you had me on the

program many times in recent years. generally speaking, i've been arguing that investors should have been tilting towards defense. portfolio ise in a whether it is more defense of an iveense of or more offens then defenssive. the point of the memo was we need to adjust our expanse. those who were defensive no longer should be as defensive. a lot of response was howard marks says buy. i was to make it clear speaking expressly to people who had been defensive. i was not telling people who were aggressive to become more so. good pointake a very

about how quickly things are changing. 500 wass ago, the s&p down more than 30% on the year. today, the s&p 500 is down only 15% on the year and high-yield in more thancome 300 basis points from their highs. how has that changed the risk reward calculations? lows,: i thought that the ,hich were reached on march 23 had the risk reward ratio become significantly in favor of reward. the lower prices go, the more the potential for a rebound and the less the potential for further decline. theought at that point that

ratio had become very favorable. so.y, obviously less about half ofed, the 34% that the market have declined between february 19 and march 23 has been made up. by definition, half of the potential is gone, roughly. risk has returned. erik: is it possible the very best buying opportunities of this crisis are behind us? howard: it is possible. it would defy comparisons to the past. havehe most part, all we our comparisons to the past. we do not have knowledge of the future. knowledge of the future is the current working title for the memo i hope to get out today or

tomorrow. we do not know what will happen in the future. if we work from analogies in the past come in the past, compared to the past, this is a rally of record speed and proportion. , most look at the past rallies in the middle of bear markets have been followed by , usuallyt declines markets do not rally straight up. erik: it sounds to me as though if would not be surprised these levels did not hold and markets were to if not retest the march 23 lows, selloff from where we are right now. howard: i would not be surprised. believeaid that, i do we need be less defensive than

we were six months ago or so. since past rallies have always been interrupted by past thinkts, than i do not you can say i would be surprised if it happened this time. erik: you recount in your latest memo how aggressively oaktree bought debt in the first months of the financial crisis in 2008, before the ultimate lows were reached in march 2009. how much has oaktree put to work since this crisis began? i cannot give you a of a publicas part company i do not want to disclose information that has to be generally disclosed, but i will say we were strong buyers in the month of march, and in

the panic or the motivated selling that accompanied the good buys towere be had. erik: you know whether bruce , jay, werecochairman able to buy as much as they wanted. many securities were selling at deep discounts from where they had been weeks earlier. that's right. bruce did a great job and he was a substantial buyer. bruce way, back in 2008, and i were going at it all the time. i think we are going too fast, i think we are going too slow. of a cascade midst downward is always challenging

and always with mixed emotions. we try to calibrate. lot but be buy a disciplined so as to have money left for the next day and so forth. i think we are happy with the events of march. erik: the fed is now buying fallen angels along with a lot of nongovernment debt. i am almost getting confused by the scale and depth of the fed programs. what it makes me wonder is whether you ever thought you would be competing with the fed to buy junk rated debt? howard: i certainly never thought so. two months ago, it two months ago today i was at a dinner with one of the fed presidents and he told me directly that the fed would only by government securities. i am surprised.

i am not sure i understand the -- i should not say that. the reason is to restart the markets and get them headed north again. the trade-off is the introduction of what we call moral hazard, the bailing out of people to keep them from suffering the consequences of their behavior. the not persuaded about value of that trade-off. i'm afraid we have to run. we are running out of time. this is bloomberg. we will be right back. ♪

david: from new york to our tv and radio audiences worldwide, welcome to "balance of power," world the world of politics meets the world of business. i am david westin. we finally got the deal in oil production. it was easter sunday. our very own annmarie hordern was there every step of the way reporting. i know you had a long weekend. explain what does the deal do as far as we know. annmarie: good afternoon. it was a dramatic few days. we thought we would get the deal thursday because we heard russia and saudi were willing to go to production, their production to be 8.5 million barrels a day. there was a sticking point with mexico. it required them to cut 400,000 barrels a day. they wanted to cut at most 100,000 barrels. there was a lot of back-and-forth. president trump to get involved. there a lot of phone