it, beating fixed income and trading revenues. wells fargo now on deck. france prolonging the shutdown, sees abysmal contraction this year. advanced economies will fall 35% this quarter. e.m. stress. south africa cuts rates. imf and world bank are set to release their economic outlook. welcome to "bloomberg daybreak: americas" on this tuesday, april 14. i'm alix steel. welcome to the beginning of earnings season. equities in the u.s. a little stronger. j&j cutting its forecast, but boosting its dividend. jp morgan a priest -- jp morgan appears to be strong on all counts. the dollar losing a little bit, bouncing off its lows of the session on the morning. you're seeing some buying in the treasury market, but not so much

in europe. european stocks hitting a 20% bounce up from the bear market in 2020. a little bit of selling on the bond market as growth questions continue and oil takes another leg lower. let's get right to the bank numbers. jp morgan shares up by about 2%. they reported blowout fixed income and trading revenue. with us now is alison williams -- is sonali basak. sonali: provisions for loan losses are really skyrocketing here, more than $8 billion expected. a lot of it is coming from the consumer business, where those provisions are more than $5 billion. on the other end of the loan but, we are expecting lower net interest income this year. also, as one would expect with lower interest rates, that would come into about $55 billion,

lower than the 57 billion dollars initially estimated. on the bright side, we saw net interest income for the quarter come in pretty healthy, and fixed income revenue beat by almost $1 billion. trading was able to hold up. the question is, wasn't able to hold up well in advance of all of its peers? alix: we sort of assumed that fixed income and equity trading was going to be really good. just how good was it in relation to what we saw? it makes sense, volatility picks up, people trade, but that hasn't always happened. sonali: it has to do with the health of the clients, where they are positioning and how they are hedging. this quarter, we did see deleveraging among the hedge fund community, but volumes were skyrocketing, and you see the banks wanting to make sure they gain more share. when it comes to jp morgan, they are right behind morgan stanley when it comes to equity trading. the question is, are they able

to inch ahead of morgan stanley when it comes to equity trading? morgan stanley is still the number one house on the block that business. even with trading showing these numbers, are they sustainable is the question. and wall street cannot take their eye off the consumer because that is really what drove results last year. it gave jp morgan a record year last year. headwind, where is jp morgan into 2020? alix: it's a great point. , can you walk us through what you have so far on provisions for credit losses, the loan loss reserve numbers we are seeing that are just huge? alison: the loan loss reserve number going up more than expected, a big jump in loan , so itas we expected does look like a significant increase in the reserve ratio. the great thing about trading, as you said, the worrisome thing

is it is not sustainable, but the great thing is we have this huge upside, 56 percent year-over-year growth in trading. that allows the banks to be conservative on provisions, keeping in mind that no one really knows how this cycle will play out. one concern is the fact that we are going to see a lot of delayed payments, and it will really be the length of the global recession, specifically in the u.s. for jp morgan, that determines how much of the pain is temporary versus permanent. the fact that you got much better than expected trading numbers allowed them to do a much bigger provision. we are going to want to hear more on the call in terms of what are the assumptions in there. jamie dimon obviously talking about the recession. he seems to be a little more negative than some of the commentators you had on your program recently. think, conservatives of

playing out within the provisions, helping to protect them if things go bad, and if things get better, perhaps there is some upside to come back into the income statement. jpx: some other results, morgan lead with over $500 inlion to small businesses march and credit extensions for companies in crisis. do we want this to be the case? do we want to see jp morgan lend a lot and set aside a lot for little reserves, or do we not want to see that? alison: i think that is a concern of investors. we did expect to see a big jump in commercial loans just based on what we were seeing in the industry data. that is a question, how much of this is good, healthy lending, and how much of it is distressed. when we look at the aggregate balance sheet for the industry, what we have seen is a huge jump in commercial and industrial,

especially in the last months of march. it is significant if you go back in the very long-term history. that is mayt of companies that are healthy, but sort of pulling down things in advance, being a little more defensive, not actually using the cash. those are the two things we are tracking through this cycle. those are the things we want to hear more about from jp morgan. we've seen consumer discretionary in the more distressed sector pulling down their lines. where is all of the new lending taking place for jp morgan? we also want to hear about what they are seeing across clients in different industries. energy is another sector we are watching and what the trends are there. alix: sonali, and your reporting, do you have a read on what industries are pulling on jp morgan? sonali: some of the reserve impacts were in oil and gas, where we can expect to see some pressure for a while, and is

separate put apart from the covid pandemic. see retail industries also impacting the reserve. let's see how the long that lasts for. on small business lending, it is a huge business for jp morgan. to alison point, we want to see healthy loan growth, but consumers will also want to remember who was there when it came to the banks that were going to help them through the tough times. the banks are really trying to put their best foot forward as they have so much aid from the government. the banks want to look really good coming out of this crisis, and jp morgan will want to look good there, given its size and stature. alix: one headline here for j.p. up $1000ase is giving special payment for some employees. i'd's wanted to check in with you on efficiency ratio because last quarter -- i just wanted to check in with you on efficiency ratio because last quarter,

that's what it was about for all the banks. what are we going to hear about this time? unique to's sort of both of your points in terms of the staff supporting cost. the one thing we have been looking at for this cycle is that costs may be less flexible because of the staffing support cost. companies talkme about pausing any potential layoffs, other companies doing cuts early in the year, according to some great reporting from sonali and her peers. they put on a hiring freeze, but we will want to hear more about what is happening on the staffing side. the expense outlook, $65 billion, so that is down a bit. but the question is what is happening on the support side for consumers and employees, and how is that impacting cost?

the bigger question for us is what is happening on the investment side of things. obviously, investors do want companies to be managing the bottom line prudently, but also continuing to invest for the long term because that has really helped with some of the share gains sonali alluded to earlier in both the trading and the branch business. any word on the investment banking concerning credit underwriting? do we have any color yet? sonali: the advisory business was a little short, but jp morgan was on some of the deals that were announced this year. they had a record quarter for investment grade issuance, and jamie dimon did point that out last week. so, pretty strong. we will see those businesses pressured for some time. but when it comes to investment banking, you have a little -- you have a lot of folks in the market waiting for a sense of when things are easing out.

jp morgan does tend to work with private equity firms, they lend a lot, so are people willing to put that dry powder to work in the coming quarter? alix: it's a great question. the last headline crossing here, net interest income coming in at $14.4 billion, better than estimated. the stoxx now trading flat in premarket. really appreciate it. thanks very much. i want to stay on financials for a second. take a look at china. it is now aiming to compete against wall street. the company may merge its two biggest brokerage firms. they have started their due diligence. they are also looking at how to structure a deal. the merger would create an investment bank of $67 billion, more than the market cap of goldman sachs. talk about serious competition. coming up, more of your morning news, trade and analysis on the markets in today's first take.

this is bloomberg. ♪

alix: time now for bloomberg first take. joining me from our in-house team of wall street veterans and insiders, michael mckee, bloomberg international economics and policy correspondent, and damian sassower, bloomberg intelligence chief emerging market credit strategist. walk us through what we should know. michael: at 8:30 this morning, we get the world economic outlook from the imf. that is probably the most

interesting, if not the most important for traders. we already have a range of predictions for major economies like the united states. goldman sachs out with new numbers today. but the key thing is what is the rest of the world going to do. those are the countries that are going to influence us, some of them behind us in terms of the virus impact. are we going to see trade start to pick up? we will be looking for those numbers. there was interesting develop -- overnight in the imf interesting developments overnight. the international community is beginning to stir and help some of the smaller countries in the world. that leads you perfectly to damian. what is most on your radar today? damian: i think redemptions are

going to be in focus for the imf. that is going to be the primary driver. that is the primary driver of the 20 countries who have approached the imf via the catastrophe containment relief trust, but we are seeing central banks across the whole of emerging-market sticking measures aimed at stimulating their domestic economies. we saw south africa cut 100 basis points overnight. that was a surprise. indonesia, they cut the bank reserve ratio by nearly 200 basis points. that is a pretty big cut, allowing them to extend more loans domestically. real rates into negative territory, but i think domestic growth is going to be the focus for a lot of nations going forward. alix: to piggyback off of what mike was talking about, debtor relief for a few months is great , but whenever going to be talking about wiping out the debt altogether?

where are we going to get the money for any of these countries to pay it back? damian: that's a pretty big statement. definitely a very touchy subject. we had someone on yesterday talking about getting closer to a distressed exchange agreement with argentina, which would be a very good thing considering the size of dollar debt they have outstanding, and the fact that it is in most institutional portfolios. i don't know what debt relief, when it is coming, what it is going to look like. what i can say is the imf is doing everything it can within reason, and even the fed come up with the central backstop lines in the fema repo support, it seems like you are getting a little bit of alleviation from some of the funding stress that has kind of hit a lot of nations over the recent weeks. alix: which really sets us up for the broader discussion of it really will come down to the fact of how and when

countries can reopen. we are seeing france extend lockdown. here in the u.s., president trump trying to speed up the reopen. michael: the u.k. said today they would extend their lockdown, so i think what we are going to come up with is a lot slower process than people anticipated, or that people hoped. there was a lot of talk about a v-shaped recovery when we first went into this. that is not going to happen. we will see a very slow rollout. people start to go back to go -- people start to go back to work. or junee until may until you get employees going back to offices, and maybe this summer we will get back to normality, but you've got to keep your fingers crossed about another rebound in the disease in the fall. so at this point, don't expect a reopening in the classic sense, or at least in the way donald trump once it. and i've got to point out one thing to you. do you know what today is? it is a day we have been waiting

for forever. today is the day the federal reserve finally starts its commercial paper lending facility. it's been out there is a deal for three or four weeks now. it's finally going into operation today, although commercial paper rates have come way down because people anticipated it was going to happen. alix: such a good point. i was like, what is it? is it siblings day? i don't know. that is something we have been talking about in the lot -- they that is something we have been talking about a lot, the commercial paper market. it feels like liquidity strains we've been looking at have been really eased. damian: how about this one? for mid-march, the bloomberg barclays investment grade dollar bond index is down nearly 10.5%. it is now positive today. positive zero point 2% year-to-date. that really speaks to the spread tightening we have seen across the whole of u.s. financial

markets on the back of some of these measures the fed are taking, including the commercial paper facility. think you kind of have to take stock of where we are, where we were. high-yield has come in quite a bit. a lot of the measures taken by the fed have nothing to do with em. i think that is the real canary in the coal mine here. the imf meetings are going to go along long way to giving us some clarity as to how developed markets are going to address emerging markets, whether it is debt relief, liquidity lines. i think that is the last stone to drop and really should be in focus for most investors today. alix: and i want to tie in this with jp morgan, and also cash. let me see if i can do it. you have a bank of america fund managers survey saying you've seen cash increases by five times over april, so definitely a rush to safety. jp morgan says they had a 20% rise in deposits, something like $343 million in deposits.

so put on your trading hat again. if there is all that cash in the system, where does it go? where does it make its way out to? damian: i'm not want to comment on bank earnings, but did you see some of those fixed trading numbers? even the equity trading numbers out of jp morgan. it leads me to believe that a lot of this has to do with the fact that these new programs by the fed, a lot of it is being intermediate by jp morgan and the large u.s. banks, and that is providing support to their bottom line via the trading side. kudos to jp morgan. they were able to stay in business and keep things moving on the commercial side in a tough quarter. whether things get better or worse from here on out remains to be seen. we've seen mixed results. sidee sort of industrial and amongst health-care and retail and all of the other sectors within the u.s. equity market, the verdict is still out on what to expect next.

alix: mike, to you? michael: i would agree with everything damian said. jamie dimon says he expects a fairly severe recession. they've got their fortress balance sheet. they are an outlier from the rest of the country. interesting earnings for me as an economist today, fastenal. they are and $18 billion company that makes construction supplies , the fasteners and things like that used throughout industry. they are cutting their capital spending for the year .ignificantly they don't see the economy coming back quickly. that is the kind of thing i would look for in these earnings done in not something the previous quarter. looking forward, what do we think it's going to happen? i'm expecting more fastenals than jp morgans. alix: really great conversation,

guys. thanks a lot. tune into bloomberg television later today for an extrusive interview with alan greenspan, former federal reserve chairman. that's at 1:00 p.m. eastern time. any charts we used throughout the show, go to gtv under terminal. browse the features, check it out. just to recap some of these numbers from jp morgan, they built reserves by $6.8 billion. the majority of that coming to their credit card business. $2.4 billion of that was for companies, primarily oil and gas. you had clients drawing down $50 billion on existing deposits. all of that giving you a window into what people and companies are doing in the middle of the virus. this is bloomberg. ♪

♪ viviana: you are watching "bloomberg daybreak."

straight risen for six sessions, capping a 43% gain. the rally was triggered by the electric carmaker's first quarter delivery report earlier this month. wedbush says china production and demand for tesla appear poised for a significant rebound. bankruptcyseeking loan that would keep the satellite service afloat. the company is waiting for aliens in proceeds from the government spectrum auction later this year. chase is shopping into institutional investors. the u.s. government stepping into help homeowners during the coronavirus crisis. that could have a huge impact on the mortgage industry. if you have a federally backed mortgage, you can stop making payments per year if you face hardship because of the coronavirus, but servicers of those mortgages are still on the hook to their investors.

that is your bloomberg business flash. alix: thanks so much. one other story that caught everyone's eye this morning, norwegian air. the stock plunging at one point as much as 60% today. it was the first day of trading after the discount airliner announced a last-ditch plan to to equity.t that would mean government terms for the airline to gain a rescue package. it wasn't so promising today. coming up, how to trade volatility with amy wu silverman of rbc. this is bloomberg. ♪ w?w?uhió'ñó

alix: welcome to "bloomberg daybreak: americas." u.s. equities managing to grind

higher here. earnings are going to be front and center. j&j raising its dividend, but cutting its outlook. jp morgan delivered solid results, but profit shrank by 69%. it is really all of the loan loss reserves and how much it will be shelling out for loans. and of america says you have about 5.3% increase in cash deposits now, so there is some fear within the market. if you switch of the board, on the bond market, some of that fear going to u.s. treasuries. european bonds not really seeing a lot of buying at all. i did want to highlight oil. you have a regulator meeting in texas, some ceos talking about production cuts. but gold at the highest level at a 2012, now looking seven-year high. looking at the price on my $1800 is now what we are talking about.

feels like just a stones throw away. for more, i want to bring in amy wu silverman, rbc capital markets equity derivatives strategist. what do you do now in this market? .my: good morning, alix frankly, there's a lot to do when the market is back to june 2019 levels, but volatility is still higher across the board. it has obviously come in a lot. the one thing i always think is funny, i always get the most questions on hedging when we are spiking down, and now we've had a really large parallel shift down and volatility. as far as i can tell, there is still a lot of uncertainty around the execution of what happens when we reopen the economy. i still think a tail hedge here makes sense in the longer-term. alix: what is the best structure for that? a few things.

term structure right now is inverted. much more expensive than if you had initiated this in january or early february, you had such a large put down by the fed. the second thing i would say is there are two ways to dig about this. is still extremely expensive and a historical context, but we came into this market underpricing a tail, and there still is enormous tail in terms of what happens with this pandemic. it really is a question of can you afford not to hedge still, and whether or not we are able to execute properly, to make the economy a-ok in another year or

so. alix: that's a great point. maybe expensive, but that doesn't mean you don't buy it at the end of the day. when you talk to your clients, what is the timing of something like this? when we were talking a month ago about elections, it was easier to create a hedge around that. how do you do that on a timeframe now? amy: it's a really good question. i think it brings in a lot of things. the first thing i think is there has been, to some degree, a put entered into the market because of the fed's announcement on thursday. that said, there are still key milestones i would look for. the first is earnings. everyone knows it is going to be bad, but there still is some context around how bad. the other thing i think is interesting to remember is for a long time, this market had the benefit of buybacks across the board. you are going to see that taken

away from the markets. to some degree, you already have. the reason that matters for volatility is buybacks tend to be a support level. if the company continues to buy back shares, you artificially have a put from the treasury of the company on that stock. if that gets removed, i think that single name volatility, you have to watch it. we are going to be more dispersed in how we trade, meaning it is not going to be as correlated as we see earnings, but the fact that this buyback is going to be removed going forward is one to watch for volatility. the other is that dividends are suspended. i think all of these things are slowly being priced in, but still not to the degree that we could see. if that wave hits and people are not prepared for it, that single day volatility could continue to spite from here. alix: is that something that feeds on itself because we have a lot of market participants who weren't around in 2008 or 2001, so they don't know what i

different volatility regime looks like? if you take away the buybacks and start playing with the dividends, that is consistent volatility we are up against. amy: i would say one thing, i remember 2008 quite clearly, unfortunately. i think that for the last 12 years, apart from the covid situation, we have been in a very low volatility regime. so a lot of people argue that with the vix where it is right now, we are still far too high. is, is concern i have the vix too high, or is it that we have entered a bear market volatility regime? i do think it is something we are going to switch to soon. the question of if volatility is at the fair value it should be really depends on that because backward looking, we've had 12 years of extremely low volatility regime, also coupled with a bull market. i think the economy is just

permanently coming out of this quite differently. sub 30long-term vix be or 25? i really don't know anymore. it is that nuance that makes it that volatility could still catch a bid from here. alix: it is a really great question, as everyone is contemplating what i new normal looks like. that also leads me to individual sectors. are there sectors where you would still by any volatility, and/or sectors you have to hedge no matter what? amy: on a sector level, essentially we have had a large rise in correlation. obviously when the markets bikes -- theverything becomes market is not reading the fine print, so to speak. one thing i would say is interesting is people have been thinking about this in terms of,

for instance, consumer staples should do well from a performance basis ursus something like consumer discretionary should do poorly. just given the coronavirus. however, another way to think about it is because correlation was so high, the volatilities have moved together, when in reality, they shouldn't have. one way to trade this situation is through different kinds of pears. we are seeing -- through different kinds of pairs. we are seeing things lineup where volatilities haven't been differentiated, but they probably should have because everyone is still braving the walk to the grocery store, but no one is going to restaurants, and yet those volatilities in the last month have been trading more together than they have apart. alix: a quick follow on that, does that mean on earnings season we will finally see

dispersion? amy: i think earnings is a good opportunity to see that dispersion. there's three key things i would watch for from a volatility perspective. the first is anymore of these buybacks. the second is anything they say on dividends because i think that is something the market has been slow in the u.s. to price as the potential to be cut or not. the third is how those correlations break down, the speed to which they break down. right now we are coming off of the post easter weekend, where was up on positivity and optimism from the fed. now jp morgan better than expected, but i think we will see a number of companies where even with covid baked in, it is far worse than expected. just another thing i would add, typically when we go into earnings season from a volatility perspective, we use the option implied moves to help us gauge what our expectations

are. i think those this season are fairly meaningless, especially to historical averages on supplied moves. they just mean nothing in terms of the brave new world, and i think most investors are looking to what a company is saying about 2021 versus what they are saying about this year. alix: totally right on. thanks a lot, amy wu silverman. really appreciate catching up with you. she joins us from rbc cap markets. onwant to give you an update news outside the business world. here's viviana hurtado. the president says the administration will soon release guidelines for states to reopen. now to capitol hill and big differences between republicans and democrats, as the u.s.

congress is under pressure to provide another stimulus package. republicans want to quickly add $250 billion to the small business lending program. democrats also want the package to include aid to hospitals, plus state and local governments. we end in the u.k.. the nation is likely to announce this week it is extending the nationwide lockdown. a law passed last month requires the government to decide by thursday if it will renew the three-week shutdown period. british scientists warning in the coming days, coronavirus deaths there will accelerate. 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. alix: thanks so much, viviana. here's an industry i'm keeping my eye on, the steel industry. it hasn't been this low since the last recession a decade ago. the use of steel plants now

plunging to just over half capacity. steelmakers and customers are shutting down factories because of the coronavirus pandemic. meanwhile, the biggest ironwork producer in the u.s. is halting two of its mining operations. all of that a good indicator of where the economy is right now. coming up, johnson & johnson cutting its 2020 outlook, but boosting its dividend. ,e will speak to joseph wolk the cfo. to check the charts and interact with us directly, go to tv on your terminal. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, raj -- coming up in the next

en, sullivan &oh cromwell senior chairman. ♪ viviana: i'm viviana hurtado with your bloomberg business flash. ab inbev of cut its proposed dividend in half. that will save about $1.1 billion. the coronavirus outbreak leading to a drop in consumption. the maker of budweiser has been struggling to reduce its $96 billion debt. johnson & johnson is the latest company to shift gears because of coronavirus. the health product maker dialing back its outlook for the year. at the same time, for the quarter, j&j post stronger sales and earnings. the company also boosted its dividend. that is your bloomberg business flash. alix: thank you so much. for more on j&j's results, the company's cfo joins me now. joseph, really great to talk to

you. the one thing everyone is going to want to know is how is the development of a vaccine for the coronavirus developing. joseph: good morning. thanks for having me today. before we get into the vaccine, on behalf of johnson & johnson and myself, i want to send out our well wishes to those people who have been impacted by the coronavirus. they are certainly in our thoughts and in our hearts. things continue to progress. as early as late january and we found out the sequence of the coronavirus, we were able to identify a lead candidate with two backups. we are now doing clinical research. inhope to be first human by september, which should lead to a readout of the data in late december, with the hopes of producing about one billion vaccines in the early part of next year. we are simultaneously ramping up manufacturing capabilities across the globe so we can

handle that demand. things are very much on track in the way you heard a couple of weeks ago. alix: how are you able to ramp up so quickly when my understanding is that vaccines take years? what makes this a little different? joseph: what we are able to do is rely on a platform that we have used in a number of other vaccine trials. so, for ebola, for hiv, for , wee he can -- for the zika are able to use a manufacturing line that has a higher yield, and that is enabling our abilities to ramp up to such higher volumes. it also gives us a great degree of confidence in terms of the safety, as well. alix: previously, you guys said that the vaccine was going to be -- to cost. is that just for the pandemic duration, or forever? joseph: our announcement was to provide this at cost during the

emergency. we are some plea seeking to recapture manufacturing and distribution costs. we realize that the pandemic is something that johnson & johnson can utilize its expertise, as well as financial stability, to make this available, so that is our plan right now. alix: what does that mean for when we returned to normal, but people still need the vaccine? do you have any clarity on that? joseph: right now, we have come out with the statement of not-for-profit, so johnson & johnson does not intend to make a profit on this particular vaccine during the pandemic. that is where we are focused. certainly, we are very responsible in our pricing. we just came out with a transparency report last week, and for the fourth year in a row, we have decreased prices in our pharmaceutical sector. we will act responsibly, as we always do. we want to make sure we get through the clinical trials and get a vaccine that is widely used across the globe to prevent any further impact from the pandemic.

i reallya human, appreciate that. talk about the different consumer health products versus your medical devices that saw a drop in revenue because of covid in the first quarter. is your ability to grow your consumer health products going to be enough to offset medical devices? how do you see that going forward? joseph: i would say our consumer, as well as our pharmaceutical units, they are pretty much going to be in-line with expectations that we had in january when we initially issued guidance for 2020. i think you saw a little bit of frontloading in the first quarter as people, at least for the consumer products, tylenol, motrin, listerine, band-aids, and pharmaceuticals, you saw 's change cycles from 30 day to 90 day scripts. we had some of that in the front end loading. it won't offset entirely the

pact we expect in the second and third quarter. then we anticipate recovery of elective surgeries in the fourth quarter. that is how we are looking at things right now. alix: and recovery for the fourth quarter for surgeries, does that imply some kind of u or v-shaped recovery, or somewhat back to normal? joseph: i would say somewhat back to normal, was probably a bit of an improvement, and improved capacity from hospital systems. we have had a chance to speak with a number of ceos, and one of the things they are struggling with is the financial challenge of being unable to perform elective surgery. that is very important to their financial equation. ,hey are being very responsible being prepared for covid-19, but many hospitals outside the hotspots are not seeing that type of activity come through their hospitals, so they are very underutilized at this point in time. alix: looking forward, what are they longer-term implications of

covid, for example, like clinical trial recruitment? is that going to be slower?, tougher or other opportunities -- to be slower, tougher? for other opportunities for m&a? just walk me through how j&j is looking at the good and bad implications. joseph: we have four major filings planned for this year for prostate cancer, multiple asloma, lung cancer, as well ms. those are still very much on track. we connect with the regulatory authorities throughout the last couple of weeks, and things are very much on track. you could see some slowdown in new patient recruitment for new trials that are longer-term in nature, but right now, things are very much on track, which bodes well for 2021. in terms of m&a, we do think it could present some opportunities . i think i would say there's

another side to that coin. there's a devastator gain planned for 2020. -- there's a divestiture gain planned for 2020. we are not in a position where we need to be a distressed seller, so we will forgo that until value is much more commits are -- is much more commits writ with the value we possess. alix: can you give me insight into where in the biotech realm there may be interest for j&j? joseph: we look across all three sectors of our business to add to our current business or enhance our portfolio. there's a number of opportunities out there. we look back to 2008 and 2009, when valuations did come down and there was an increase in volatility. as we come out of the crisis, we expect there could be some thing like that here. alix: i really appreciate your candor. thank you very much. we wish you luck on the vaccine. thank you for all of that work,

joseph wolk, j&j cfo. wells fargo breaking this a little earlier. they are taking a provision for loans and debt in the first quarter of $4 billion. that is almost double what we had been expecting for credit losses. taking a look at this basic at -- lookingg in at this -- taking a look at this, basic earnings coming in at one cent per share. their efficiency ratio year, upg versus the about 10%. we will get more details in just a moment. wells fargo up and premarket. this is bloomberg. ♪

alix: wells fargo coming out with earnings a bit early. stock up in premarket. actually erasing some of its

gains, now flat. sonali basak has more. sonali: this is about half of what we saw over at j.p. morgan. athave net interest income $11.3 billion, higher than analysts expected. a little bit of good news for wells fargo. that efficiency ratio is a bit high, especially relative to what we saw at its rival j.p. morgan this morning. we are going to expect that to inch higher for the period. the question is what do they expect when it comes to net interest income for the rest of the year. alix: and average loans were coming in just about 0.9% higher. do we expect that to now change really quickly come another thing can actually expand their balance sheet for the fed? sonali: i wouldn't get too excited because there are limitations on how much they can extend their balance sheet, but it is something to look out for, how much they will take advantage of that opportunity. we see a page turning here, with

charlie scharf taking over as ceo of this firm. it seems that initial reactions are good when it comes to this income print. j.p. morgan really ramped up mortgage lending here. it seems wells fargo did the same. alix: yes, with the credit provisions like $8 million. thank you very much. sonali will join us in the next hour. wells fargo coming out relatively strong. loans and debt credit losses, though. we will break that all down. this is bloomberg. ♪

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alix: j.p. morgan profit falls to the lowest since 2013, but beating on fixed income and equities trading. ceo jb diamond says they are well-capitalized -- ceo jamie dimon says they are well-capitalized and highly liquid. france prolonging be shut down and sees a dismal 8% gdp contraction this year, while goldman sachs says advanced economies will shrink 35% this quarter. south africa cuts rates by 100 basis points. indonesia frees up money. the imf and world bank are set to release their economic outlook. welcome to "bloomberg daybreak" on this tuesday, april 14. i'm alix steel. welcome to earnings season. s&p futures are still in positive territory, up by 34 points. j&j raising its dividend while cutting its outlook. j.p. morgan to leave the -- j.p.

morgan delivering for solid results. if you take a look at other asset classes like the dollar, bouncing back from its lows of the session. oil continuing to roll over just a bit. let's get right to wells fargo and j.p. morgan, both flipping into flat or negative territory after reporting earnings. we want to start on wells fargo. here toasak his help us break down the results. sonali: we were talking about these provisions for loan losses, at $4 billion, and more than $8 million for j.p. morgan. see where those provisions come from and what consumers are going to be hurt during this crisis. we are waiting for wells fargo's read on where of my love -- on where a lot of these losses may be coming from. we are going to want to see this is ting the ability of the numbers we saw at j.p. morgan. the media call starting with

journalists right now as we speak, so we will get a little bit more of a sense on what we will see through the rest of the year because the second quarter expectations look pretty bleak as well. alix: fairpoint. can you set me up as well for , digesting it for an hour? sonali: the fixed income was one of the best we saw. the $6 billion in loan losses provisions are staggering. remember, this drove profits down to the lowest level you've seen in years, and this is coming from the fortress j.p. morgan, where a year ago we saw a return on tangible equity figure at 19%. that has dropped now to 5%. so what is the story for j.p. morgan a tough environment? where does it stand relative to the rest of the banking industry? tomorrow we have bank of america as well, also highly exposed to the consumer, also highly

exposed to interest rates. alix: thank you very much. really appreciate you helping break down those numbers. 1.3 morgan is now up by percent, and wells fargo slipping into negative territory. letting me now is david george, baird senior research analyst. rating onegative wells fargo-- on and a neutral rating on j.p. morgan. into j.p.l down more morgan. obviously, the highlight was the provision for losses jumping to $8 billion. the reserve build overall, 6.8

billion dollars. most of that coming from credit cards. what did you make of some of these numbers? david: it is hard to know exec he would everyone was expecting, but we expected a very big provision for jp to try to get in front of the credit challenges related to covid-19 as soon as possible, and they did that. unfortunately, they had a very strong trading in capital markets quarter. they also had a very strong loan growth, so the fact that they threw up an $8 billion provision fromtill made $.75 was, our perspective, kind of demonstrates the power that j.p. morgan franchise bradley. i am of -- j.p. morgan franchise broadly. i am of the opinion that they will be ok with the numbers this morning. alix: can it continue putting up these kind of numbers with that type of loan loss provision? because i amyes

not of the view that an $8 billion provision each quarter is what i would consider to be normal or sustainable, even though credit is going to clearly remain a headwind for jp as well as the banks broadly. we would expect that provisions will be less than what we saw in ,he first quarter, albeit still i would expect them to continue to build loan losses as the year progresses, but probably not to the degree we saw this morning. alix: i guess that is a good way of phrasing it. for how long can j.p. morgan sustain these kind of loan loss reserves in addition to being able to turn out really strong numbers on trading and equities? six months? two quarters? what do you think? david: i think this quarter shows clearly, trading is probably not sustainable.

but what this quarter does show is that j.p. morgan has gotten very significant pre-provision or pre-credit earnings power, which gives them significant ability to earn through very $8h credit costs, and billion a quarter on a normalized basis is probably going to be closer to $2 billion. they've got a ton of financial earnings power, and they should be able to maintain very strong capital levels and still very solid earnings, even in the face of this challenging environment that we are in at the moment. alix: can you make the same statement for wells fargo, where earnings came in better come about loan loss provisions were about half of what j.p. morgan was? david: i think the wells numbers were similar with responsys to

the provision they took. j.p. morgan has a little bit soe credit card exposure, given the vast increase in unemployment claims, that was probably the big driver of the card related provision, so it got less card exposure compared to taking morgan. pre-provisioned profitability is not quite as strong, which is why you did not see much profitability. they essentially broke even on a gap faces in this most recent -- on a gap basis in this most recent quarter. they have not been able to grow the balance sheet, so that has had an impact on profitability. there's also been a lot of litigation and investments they've had to make in order to satisfy some of these regulatory requirements they are going through. -- therepre-credit

pre-credit profitability is not nearly as profitable on a pre-credit basis than j.p. morgan's. alix: j.p. morgan media call starting now. the cfo saying j.p. morgan is committed to maintaining dividend payments. in europe, dividend buybacks are a no go to free up loans. is there a breaking point where you see if this crisis goes on for x amount of months, these banks need to rethink their programs? hasd: buybacks basically been tabled for the moment, as you know. in terms of cash dividends, from our perspective, if we are still sitting here in december or january, looking up fourth-quarter earnings, and provisioned numbers are at similar levels as today, then i think dividends will be considered as a potential draw on capital for the banking industry, but we are not of that

opinion, that bank dividends are particularly vulnerable. we don't think you will see this high a level of provisions over the next three to four quarters. kind of a broader question, but to shareholders want banks to take on more risk to help support the economy? do they want them to, say, pay employees who don't come into work? do they want a higher efficiency ratio? do shareholders look and value banks differently in this kind of crisis? i am trying to kind of understand the question. i think where you are going with this, and our interpretation is that unlike the last crisis, where the banks were really basically the problem, to some extent, and our opinion, banks are now part of the solution. liquidity providing

to consumers and businesses of all ranges of sizes that need it , but obviously, that needs to be done in a responsible way. in addition to providing credit, there's a significant amount of forbearance and leeway that banks are providing during this time. with a balance of working customers, serving their function in the market, but doing so in a responsible way. alix: fair. that pretty much answered my question. thanks a lot. really appreciate david george of baird. later today, we will have an interview with the cfo of wells fargo. stay tuned for that at 4:00 eastern. coming up, a shareholder's perspective on big banks. cole smead, smead capital

management president and portfolio manager. this is bloomberg. ♪

♪ alix: still on this morning's top stories is earnings from big banks. wells fargo coming out earning one dollar a share, seeing loss provisions of about $4 billion. fixedorgan crushing it on and equity trading. going me now is cole smead, smead capital management president and portfolio manager. he owns both j.p. morgan and wells fargo banks. banks make up 40% of his portfolio. are you happy with the

allocation you have now? how do you look at your allocation over the next six months? cole: great question. j.p. morgan, as i got to see more from their earnings statement, they took about $6 billion reserves for losses. you are going to go through situations where you reserve. what you have seen in prior quarters, how many of those reserves are going to be realized in hand, or how many are going to be released? you just can't know that right now because of how things sit. it paints a big picture of the where we have come in the last 13 years. at this time in 2007, as we were coming to the midpoint of the year, banks were in the worst position they'd in in u.s. history. in comparison, we are dealing with a nightmare scenario in the u.s. economy, and these banks are able to reserve this amount of earnings in the quarter. that could go on for another

quarter or two, but think of the earnings power they are able to is a near-terme calamity in the u.s. economy. alix: i was asking an analyst earlier, how do you look at the trade-off? on the one hand, the ratio of loans to deposits is just in the mid-50's, so they have much more deposits than they have loans. on the other hand, you could say that is good because they have a good balance sheet, they got the cash reserves. on the flipside, the loans they are going to make are pivotal to the economy stabilizing and having any kind of recovery. as a shareholder, how do you look at that trade-off? cole: it's a great question. if you are the government right now, the banks are your arm forgetting many things done. i think that is a wonderful position for the banks to be in verses where they were. they were the problem, or part of the problem, as we dealt with

10 plus years ago. this environment has also, like you pointed out, the deposits are going to stay high because people are scared. cashning to people hoard is just a good picture of that. in this environment, what they are reserving for right now is things more tied to small business and consumer. i think what will be more interesting in their earnings is to go a couple of quarters out. you mentioned the investment banking aspect. the corporate market is going to take time to sort out. there may not be the same level of corporate bond deals going on that we saw because the bond market is going to have to differentiate who the winners and losers are for that gets going at a higher level, and they also benefited from the fixed income trading in the interim. so the trading desks are doing better, which had been a sore spot for a while. they have different letters in their business -- different levers in their business.

but overall, the position they are in as we come out of this, we think it is wonderful. j.p. morgan also was the more popular of really the beauty pageant in the last two to three years, and jb nyman -- and jamie dimon was the leading role in that. the only problem is with more positivity, in comparison, wells fargo has been the dog of the dogs in this world, for some reasons on their own, for some just the pure sentiment, and we think that looks far more attractive because people don't want to touch wells in this environment coming out of what they just came out of. alix: fair. wouldp. morgan, though, you be willing to have a lower dividend in order for the company to still make these loans and do their job? toe: well, let's go back

when the fed restricted the dividend. it was actually a blessing because the fed didn't allow higher dividend payouts because they didn't want to let retail investors into the dividends of those stocks. at what the buyback prices were that the fed acquired to release capital. those are just major blessings. whether this comes through the dividend or the buyback, we really don't care. but the dividend is a notable feature on these stocks relative to the s&p 500. in other words, returns are not likely to be good in dividend and dividend growth. on the margin, i'd say i like it because it is just something people can see to show how cheap these stocks are. alix: you do have a lot of exposure on the financial side to consumers. you on bank of america, amex,

discovery, as well as wells fargo and jp morgan. this is going to be a hard-hit .ector for some of these names . how are you looking at where the risk potential is for them? cole: we are a glutton for punishment. we are getting more involved in this space. we are getting involved in places we haven't before. it is some subprime spaces. there are wonderful that may avail because of the price. the question is, based on what is going on, just the price mirror at the risk you are taking. i think that's where people the trades. everyone can say here's what's happening in the interim, but what price is the market giving you for the future of these businesses is what we are really excited about. there's going to be a lot of

people that have credit worthiness that drop in consumers, and guess what? there will only be certain people that serve those arenas. right now, think of the jumbo loan market, really only being done on a home lending basis by the big banks. certain markets are being left to these big financial institutions. think of the non-bank lenders right now. they are essentially being told to take a hike, so this is the largest source of liquidity in the united states. and we think people don't understand what kind of power that should demand in prices. alix: really great perspective. thanks a lot, cole smead of smead capital. he will stick around and talk glutton forr punishment, and that is energy stocks. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." johnson & johnson the latest company to shift gears because of the coronavirus, dialing back its outlook for the year. at the same time, for the first quarter, j&j posted stronger sales and earnings. the company also boosted its dividend. the price of oil is down today from on planned outputs the world's biggest producers, outweighed by the demand destruction caused by the coronavirus. that is your bloomberg business flash. alix: thanks so much. cole smead of smead capital still with me. 7% of your portfolio is in energy. last time we talked, you still

liked occidental. how are you rejiggering this? this really, a lot of has to do in the interim with supply cuts. but what is demand going to look like? most people have been very negative on the subject. for the last 10 years, investors haven't really made money. buffettwas a space that and peter lynch were out talking about come our view right now is really two things. one, we could be dead wrong about the space. two, we could just be early. when i say early in this process, we don't get to see what demand looks like coming back, and the most positive thing we saw in the last couple of weeks about the energy declaringas bankruptcy, but that is what

takes place during this kind of environment. it is the supply cut that you don't do through a government mandate or a highly political situation. we will see those role for a while because there are quite a few producers that can't produce at these prices. just to get a sense, 80% of the american production of oil is done by 50 producers. the other 20% is done by thousands of companies. the question is, between the private markets and the public markets, among those producers, who will get weeded out? i mentioned in corporate land, incorporate debt, that is really where those things are going to get weeded out, but he was going to get capital and great finance? who's not? who's got to go to bankruptcy court to get bought by someone them?thatp to buy differentiation process, price regulates price. price goes too low, people don't produce.

you weed out the higher cost producers. i think the area that we will see the most interesting bankruptcies will be the institutional investors that did all of the private projects between 2011 and 2015. my own on the modern, whitman college in washington, has a ton of private projects. the question is which one of those are going to be winners and losers. in a google study which tracks all of those institutions says that they are all loaded, lock, stock and barrel, and this is not the environment to be holding those portfolios. alix: really great to catch up with you, cole smead of smead capital. of moody's will join me. this is bloomberg. ♪

alix: this is "bloomberg daybreak: americas." waiting for eco-data.

buystory is by equities, u.s. bonds. you're seeing money into the bottom market here. in europe it is dicier. the dollar at now around the lows of the session. the other performer in the g10 space. crude down another 3%. the imf releases the report right now seeing world gdp shrinking 3% in 2020. in 2021,grow 5% definitely signals some kind of recovery. they are looking at china's economy still growing in 2020, whereas the u.s. will contract almost 6%. that is the imf quick blush readout. in terms of the eco-data here, this is a check in of where we see pricing pressure or not in march, and it seems like not is the take away.

import prices down over 4% and export price index down 3.6%. that lower-priced scenario playing out, although richard clarida did seem to think we will avoid any deflationary scenario. joints me now. what stood out to you from what we saw from the imf? michael: the fact that the world will have a recession in 2020, we knew that, they are putting a number on it. they are expecting something of a v-shaped recession for 2021. the problem is you do not know exactly what the quarterly breakdown is. these are year averages. at this point, saying the world yearmy will grow 5.8% next , that is from a lower base. we cannot compare that to the 3% decline. it is hard to know when that happens. it could be on the last quarter

of the year. 2.9% was the growth rate last year. they do see extreme uncertainty over the global growth forecast. they are not saying this is exactly what will happen. it is their best guess. when you live country by country , the u.s., they see as contracting 5.9% this year with a 4.7% growth rate. unemployment in the u.s. will average 10.4% over the course of the year. 3.7% andnto march at in 2021 we will still be at 9.1%. that would not be a good political outcome for the president. -7.3% thisrowth of year, 4.7% next year. the u.k. down 4.5%. in china, everybody is keeping an eye on that. positive growth 1.2%. that is so close to zero you do not know. country -- the imf

thinks 9.2%. you will see significant contraction in all of the major economies of the world before a rebound that will not be quite as strong next year. the euro area probably shrinking 7.5% in 2020. we also got estimates from goldman sachs, looking at a 35% decrease in the first quarter of this year. the negative numbers keep getting worse. i also wonder, and we can dig into this later, is what kind of policy support and fiscal support all of this is calculated on. michael: they are looking at what we have got so far. i have not read the entire world economic outlook, but most analysts think we are going to need more. in the u.s. they are already talking about it and in europe they are just coming up with a plan. we know the chinese have been doing a lot. the world is trying to stimulate but we are not at the point

where stimulation matters. we are putting a floor under things. it is not an easy thing to say where we will be next year. or just right now. zandi,ining me is mark movies economics chief economist. you've been hearing mike and i break down what the imf has been talking about. what are some of your takeaways? you agree with that? mark: it sound similar to our forecast, with the u.s. we are down 6% gdp for 2020. , smallas a flat year positive, small negative. global growth at 3.5%. that sounds very consistent. his on would push back the bounce back 2021. i would expect the economy to grow next year because this year

businesses are shut down by the end of the year into next they will reopen and that would add to growth. i would expect that growth to be relatively muted and modest. we will not take off until we have some kind of vaccine or effective treatment for the virus. a lot depends on that and the timing of that that will determine what 2021 looks like. alix: we talk a lot about that in terms of the recovery. when it was just in china it was a v-shaped recovery, then the conversation became a u. are you putting a letter on it? do not mean to be cheeky, but how do you imagine what the recovery will look like? mark: i expect it will be a muted recovery. i cannot imagine us kicking into gear until we have a vaccine or a therapy. in addition to the fact that people will remain cautious, they will not travel, global borders will not be open, at least not to the degree we see

the kind of trade we need to get growth. also in this dark time, you mentioned big negative numbers. we'll see a lot of business failures and bankruptcies and that will diminish the ability of the global economy to regain traction, even when things start to reopen. there will be fewer businesses around people who have lost jobs and do not have businesses to go back to. historically in a recession, you typically have one part of the and turns is doing ok out to be the engine that drives the global economy lower. china play that role in the financial crisis. there is nobody that will do that this go around. everyone is struggling with this. i do not see the global economy, the u.s. economy kicking into high gear until we have that vaccine. alix: mike? michael: i think mark has the point exactly correct. people are not going to want to go out until we see a vaccine.

that will keep the economy much lower. the important thing to remember about the percentages we are talking about is if you are looking at a 5.9% decline in u.s. gdp of $20 trillion, you will be looking at a much bigger drop then you are at 4.7% increase. even if we do get people coming back a little bit over the course of 2021, it will not bring us anywhere near coming close to replacing what was lost. you can see some of the forecasts coming there. the unemployment rate will also be interesting. the imf does not see -- if we get to 15% or 16%, they do not see it staying there. it will average 10.4%, but in 2021 it does not go down that much. whoever the president is in 2021 will have a task ahead of him trying to get people back to work. good point.s such a

mark, when you're trying to look at 2021, what kind of economy are you imagining? thee was a great article in "journal" yesterday that detailed steps companies were taking to make it safer workers to get back. we are dealing with a whole new world, whether restaurant does not come back, whether waiters do not have jobs, or if we are looking at a whole different system of health care. mark: we will see lots of changes. i cannot imagine we come out of this without fundamental changes in the way we live and work. 2021 will be a tough year to get back into gear. it will take a bit. as you pointed out earlier, it will take policy support. the fed will have to remain aggressive and keep credit --kets operating while

operating well, and lawmakers will have to come up with more support. so far, the support to the economy has been about putting a floor under the economy and making sure we do not fall into the negative numbers more deeply. it is not about stimulating the economy and getting us back to a stronger rate of growth. that is the kind of support that needs to come. i suspect it will. that is key to 2021 as well. how much support we get and how fast we get it. alix: great perspective, thanks a lot. i appreciate that. as well asof moody's bloombergs michael mckee. we want to give you update on what is making headlines outside the business world. viviana hurtado is here. viviana: president donald trump hopes to reopen the u.s. ahead of schedule. u.s.ys within days the will issue guidance for state

-- heors who want to open says the guidelines will give americans the confidence they need to return to a normal life. now to capitol hill and big differences between republicans and democrats as the u.s. congress is under pressure to provide another stimulus package. atublicans want to quickly $250 billion to the small business relief program. package toant that include hospitals as well as aid to state and local governments. we end in the u.k. that nation likely to announce it is extending the nationwide lockdown. a law passed last month requires the government to decide by thursday if it will renew the three week shutdown period. british scientists warning in the coming days coronavirus debts will accelerate. 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? alix: thanks so much.

banking sees a new type of stress with the coronavirus. we will speak to one of the country's top banking lawyers, rodgin cohen. bloomberg users, check out gtv . any charts we used throughout the program, gtv . this is bloomberg. ♪

viviana: this is "bluebird daybreak." i am viviana hurtado and you're looking at the principal room. coming up later, an exclusive interview with alan greenspan. ♪

viviana: you're watching "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. tesla has risen six straight sessions, capping a 43% gain triggered by the electric car makers first quarter delivery report earlier this month. wedbush saying production and demand for tesla up your poised for significant rebound. sat is seeking a loan that would keep the satellite company afloat. bloomberg has learned j.p. morgan chase it shopping the debt loan to institutional investors. we end with an upstart streaming service. ceo telling viewers -- telling bloomberg the option may be available in coming months.

quibi shows have big-name talent like steven spielberg and j-lo. alix: it is time for bottom line. we will focus on banking and regulations. joining me is rodgin cohen, sullivan & cromwell senior chairman. mosts been a key player in major bank failures in recent decades. it is such a privilege to talk to you. we are obviously in unprecedented times. the difference is banks are a conduit of hope. they will help stabilize the economy rather than be part of the problem. nevertheless, it will be difficult for some of the banks to weather the storm. who is going to fail? a pleasure as always to be here with you. premise.ight in your here the banks are the conduit not the- the hope,

source of the problem. , we see almost all of the banking systems in a pressuredbeit position in view of the covid-19 crisis. thanks to the banks and the regulators, the banks came into this crisis with very strong capital ratios. forced to accept a double burden -- higher loan losses and higher loan demands, both of which place pressure on capital ratios. the banks were very strongly capitalized. this gives them significant runway. there may be a small number who let their capital ratios slip. they will be under the most pressure. that means wehink

wind up saying more m&a, whether it is the smaller players in for a lot more strain or the big guys coming in and scooping up opportunities? can you give me an idea how you view that? rodgin: i do not see a lot of new m&a. with banks under stress in terms of personnel having to work remotely, the challenges of doing virtual due diligence without ever being able to meet insufferable but extremely high. banking is a people business. i think most bankers would be highly reluctant to engage in significant m&a than they have ever met the people they would be merging with. -- if they have never met the people they would be merging with.

alix: fairpoint. keep going. your point.s weakenedthen see banks, some more than others. u, v, r curve this is, or in between, at the top of the second leg there could be real opportunities for mergers then. alix: what we have seen with european banks is saying no buybacks. i was talking to daniel tarullo and i said you agree, he said yes, the fed should say no dividends until this is over. do you agree? rodgin: i do not. let me try and explain what i think is a crucial difference. largelypean banks have relied on dividends to return capital. u.s. banks have not relied on

dividends to return capital. ones usually only about third of their capital return. let -- the rest has been buybacks. those have been postponed at all of the larger banks. the pressure is less. until we see the time when dividends would outpace earnings for a couple quarters, i do not see the pressure on banks to restrict dividends. banksf the problem is if alone cannot pay dividends and other sectors of the industry can, the banks become very disfavored in a relative term. dan is an astute observer of the and he may ultimately prove to be right, i just think

not right now. alix: there. what -- fair. what we are were also seeing talking about wall street in the conduit to help the economy, the paycheck protection program, the small and medium-sized business program where banks to have to take on some of the rest. would you do anything different if you were in the administration to let the banks eight we are on board, we will lend, we will do this? rodgin: i think it turned out to be a necessity. you can always quarrel with this the massive i think and thethe response effort to use the banks was critical. i will come back to your word, conduit. you have to have a methodology for getting the loans out and making the assessments. , administratively,

have the capacity to do that. that is not the government's business. they do not have the people. i think that was a wise choice. different than the main street lending. grant because of the forgiveness element. the banks have no credit risk. , banksin street lending will be required to take a slight risk. both the concept and the implementation will necessarily be different. alix: do you think, looking at this crisis, that we will need more? we will need a different program to rely more on banks, more incentive for them to credit indebted companies? rodgin: we still have a fair

amount of firepower left. allocated under the so-called before program, some of which has been used for strictly federal reserve's programs. there is still quite a fair amount left. shouldlly, i think ppe billion, if $250 nothing else to quell concerns for small businesses and nonprofits that the money will run out. i think there is a reasonable chance that what has been done other than that will be sufficient. believer that you solve major problems at the outset, not afterwards. four, on themulus

balance, would make sense. now, merely the confidence that it is there should help the economy. alix: great to get your perspective. thanks so much. rodgin cohen of sullivan & cromwell, great to get that perspective. thanks a lot. coming up, jp morgan's analyst call is going on. we will bring you highlights. this is bloomberg. ♪

alix: j.p. morgan analyst call underway. sonali basak has the latest. sonali: we heard from the jp morgan cfo on the media call earlier. jp morgan's expectation is gdp and unemployment start to recover by the end of the year. in the near term, she set the provisions for loan losses can

be meaningfully higher in the coming quarters. with all of that said, we see jp morgan shares up a bit. if you look at their net interest income expectations, while lower than what they expected, it is still higher than what we will be seeing and what we have seen in 2018. lower, but not horrible. good idea point and on the outlook. thank you very much. that does it for me at "bloomberg daybreak: americas." coming up on the open with jonathan ferro, more bank earnings with gerard cassidy. this is bloomberg. ♪

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jonathan: from new york city our audience worldwide, good morning, good morning. the countdown to the open starts right now. 30 minutes away from the opening bell with equity futures elevated through much of the session so far. s&p 500 futures positive 1.6%. that is the equity market. there is the bond market. yields in three basis points to euro -- to .74%. in foreign-exchange, the dollar weaker against pretty much everything in g10, including the euro. euro-dollar up .5%. our big issue this morning and through much of the week, earnings season begins right now with jp morgan and wells fargo. if you asked many people in this market, the one thing they are laser focused on -- credit provisions, credit provisions, credit provisions. let's bring in sonali basak for more. sonali: you hit the nail on t