building reserves. that only tells us what estimate credit losses will be. we will see that across sectors. scarlet: and there you have the closing bell. we are looking at u.s. stocks closing the day higher, five week highs in fact, for the s&p. above the 2800 level. close. the preliminary we will wait for the numbers to settle a bit. 22 out of the 24 green, on the downside, you have banks, jp theyn, wells fargo after began reporting earnings. energy stocks down half of 1%. thatne: you look at where

optimism is. we used to joke a lot about a month ago about the rally we saw in virgin galactic. today those shares up 23%. names that maybe did not have a lot going on around them but maybe they hope and a prayer. -- carvana,at was up 80% or so in the past week and a half. there was some industry data overnight that seemed to suggest that, at least for carvana, that might not be the case. are notes trends that as bad as feared. chief equity advancement officer. eddie, what is your general outlook here once you get beyond equities at start to connect it with some of the other asset classes.

>> a large floating rate bank loan business, so we are in close contact with our counterparts in both the bank loan and high-yield areas. the interesting to look at treasury market and see if very depressed area of interest rate. the bond market telling you there could be things to concerned about. when you get into individual stockpicking, individual industry selection. i think for the rally to continue in a meaningful way, you will have to see value stocks participate more meaningfully -- more meaningfully. you will need to see participation from that part of the market for this to continue, i believe. scarlet: interesting. not just value stocks but also small caps.

what is the case to perhaps start looking at small caps as an area that is underappreciated and undervalued by the market. like small caps a lot but we think you have to be very selective. even before the recent troubles, roughly one third of the russell index, one third of those companies were not making a profit is bite being 10 years into an economic recovery. we don't think the small-cap risk premium is there anymore. only true if is you isolate yourself to high quality profitable companies with good balance sheet. if you do that, i think you will do very well with small caps from here. romaine: on that same note, there were a lot of balance sheet concerns with those companies prior to the health crisis. the idea that the fed is

providing a backstop, the idea that some of the junk rated debt might get that cover from the fed. does that change it anyway the way you look at some of these companies, or is it still just go for the high quality names and don't worry about what the fed is doing? eddie: the expression "don't fight the fed" is still very much intact. it was not like small-cap companies that were indebted. not necessarily that interest rates were too high. in many ways, the businesses were of questionable quality. you want to stick with businesses that can win over the long run and have good balance sheets. one of the things i think we will see coming out of this, and we had questions early on about the changing nature of capital

structures for business, you will see companies want to carry less debt in the future than they have. they will want to have a more secure balance sheet. the companies that already have good balance sheet's i think will be relatively well positioned within their industries. withet: as we move forward earnings season, are there still stocks are companies that represent what the broader sector can bring to the table when it comes to process or results, or does every company have their own idiosyncrasies and you have to judge covey -- judge company by company? eddie: you still have that. we will be hearing from company managements over the next few weeks. sometimes, we put too much faith in what they know about how the economy will unfold.

they are trying to figure it out like the rest of us. i think putting too much faith in what one ceo or company says, i think, would be a mistake. you want to really stick with the company's managing through this crisis well because they will be the ones that come out stronger on the other side. scarlet: stuff. chiefvance management equity investment director eddie perkin joining us. coming up next, we will look at the numbers and legitimacy of some of the covid-19 data out there. this is bloomberg. ♪

romaine: broadcasting live from new york to our viewers worldwide, this is "what'd you miss? " into how theapshot outbreak is possibly stabilizing and even improving. speaking of earnings season, there is a reality check on the profit outlooks at the biggest u.s. banks today. j.p. morgan chase posted their highest low loss provisions in a toade, setting aside money cover defaults across the economy. the wells fargo senior executive vice president to get some insight.

provisions taking center stage here. investors looking past first quarter revenues and earnings numbers. clearly, a lot of things have changed since then. what you can show us is the amount of damage the banks could see in the months to come. wells set aside $4 billion. give us some insight into how you came to that number. there is a new accounting rule that requires banks to set aside money earlier in a cycle. how much of that is due to damage you estimate is coming down the pike? >> thank you for having me. when it comes to loan losses, there is a new accounting standard this quarter. of loan estimation, allowancelyzed our

under the old gap and under the new cap. ,he difference in this quarter and to get to the heart of your question, you are estimating via assumptions about the path of gdp growth, things like unemployment, commercial real atate valuation, the s&p, variety of things. for the front end loading, what if loss content might be those scenarios pay out. the facts really changed on the ground in march and even in the latter half of march as banks were closing their books. best tore doing their estimate, create scenarios, run that through models, and set

aside the right amount. separately, because there were also some industries that were directly in acted from the march and april change in economic activity. i put transportation like airlines, retailers, leisure, , lesliees, a handful things like entertainment, etc. we are also thinking about our exposures in those industries. , the forget oil and gas slowdown in aggregate demand. a tendency to slightly overestimate we don't know how long the economy will be locked down. but that is what is going on here. about thehen we talk

idea of all of us getting back to work and hopefully back to play as well, we did see in your earnings and j.p. morgan earnings that sort of decline in credit card volume growth. thatyou take a look at trick and volatility, how to those two line-up into the future? drastically changed in the last two weeks of march as it relates to consumer spending. we have seen overall spending from april onward. week from thever prior year. as you would expect, grocery stores and major online retailers seem to be doing better in this environment, in the neighborhood of 40%. stores,nts, clothing

, this average of about down 40%. if you areday, comparing the same day to a year earlier. people are not going to make up for missed restaurant visits, but there are some delayed purchases that folks will go out and act on when the time presents itself. which industries do better or worse? where sales turned back on really matters. obviouslyxpenses are a big sticking point for investors. it was a big focus for wells fargo before the coronavirus. how much of this effort is being put on hold right now? mortgage borrowers offering

workers extra pay, pausing new job cuts during the crisis. can you do both at the same time? john: you really can't do both at the same time. the focus right now is on our team numbers and customers. we told our folks during the call today, it is just as important as it ever was. right now, it is about making sure that employees are taking takenf -- employees are care of, people stay in their jobs, and our customers are served. romaine: we appreciate you taking time to talk with us. john shrewsberry, wells fargo ceo. dalio, bridgewater associates cochairman and cio, he will join us at 10:00 a.m. new york time. we will be back in a moment. this is bloomberg. ♪

romaine: keeping an eye on rising a little bit after hours. dow jones headline saying that the treasury department in the u.s. and airlines have agreed on principle to some kind of aid package. so here itt 2% or after hours trading. care andn to health johnson & johnson. bloomberg spoke a little bit earlier with the cfo of johnson & johnson about the outlook. >> with respect to the vaccine,

thing continue to progress. identify a lead candidate with two backups. we are now doing lead research. byhope to be inhuman september, with a readout by late september, with the hopes of producing a billion vaccines by the early part of next year. we are simultaneously ramping up manufacturing capabilities across the globe. czar very much on track to what you heard a couple of weeks ago. it's understanding, vaccines take years. what makes this different? joseph: what we are able to do is rely on a platform that we have used in a number of other trials. zika, we were able to use

the same platform, which has a higher yield. that also gives us a great degree of confidence in terms of the safety as well. that the vaccine would be sold at cost. it is just for this pandemic, for the duration, or forever? joseph: our announcement was to provide this at cost during the emergency. we are simply seeking to capture manufacturing and distribution costs. we realize the pandemic is something johnson & johnson can utilize its expertise and ability to make this available. whenat does that mean for we returned to normal and people still need the vaccine? joseph: right now, the statement

of johnson & johnson does not intend to make a profit on this particular vaccine during the pandemic. our came out with transparency report just last week. in oured prices pharmaceutical sector. we will act responsibly as we always do. >> we really appreciate -- as a human, i really appreciate that. talk about the consumer health products versus medical devices. you sigh drop in revenue because of covid in the first quarter. is your ability to grow products going to offset medical devices? would say our consumer

as well as our pharmaceutical units will be in line with our expectations from january when we initially gave guidance for 2020. i think we saw a little bit of frontloading for the first quarter. listerine,trin, band-aids, maybe a little bit of pantry loading. in pharmaceuticals, you saw changing of cycles in terms of refills. the fronte of that in end loading. it won't offset the medical device impact we expect to see in the second and third quarter. the recovery for the elective surgeries, does that imply some sort of v-shaped recovery or back to normal? joseph: i would say somewhat back to normal with probably a little bit of an improvement, improved capacity from hospital

systems. we have had a chance to speak with a number of ceos. one of the things they are struggling with is just the financial challenges to be unable to perform elective surgery. responsible,g very very prepared for covid-19. they are very much underutilized this point in time. of --t: that was the ceo the cfo of j and j, joseph wolk. every day, we get new data on the coronavirus. how much of it can we really trust? let's bring in bloomberg opinion columnist max neeson. there are lots of different numbers to choose from, but first and foremost, the daily death count by state, by country. it all depends on testing.

despite improvements in testing availability in the u.s., we are still far away from where we .hould be especiallyn testing, in the united states shows that we are only beginning to understand the scale of the outbreak. it will be months before we are at a scale that gives us a sense of how many people are or were infected on any given day. is not so simple anymore as just scaling up the platforms that exist. we are at the point where we will have to start building new machines. difficult much more than the first part.

understanding what the situation is on any given day. romaine: when we talk about that lag and the idea that there is a lot of undercounting in this situation, not just in terms of the people affected but also the deaths. how much does that set us back in getting to a stage where we either have a vaccine or at least some sort of measures in place that allows us to go back to our daily lives and have some measure of protection? max: it is likely going to take, and till there is a vaccine or therapeutic, a very slow, measured approach. unless you are doing extremely broad, frequent testing, you will not catch renewed out rakes until they get into the thousands.

do contact tracing and catch individual cases before they get to multiple cases. being kinddition to of a sustained reduction in case counts, is kind of what you have to get to. see that means, you will parts of the population come back to work, then different segments, people who are more vulnerable, being asked to take more precautions. scarlet: clearly, data collection is flawed, but we know it is flawed when you look at the official data that comes out day in and day out, is there value in looking at it? there is some narrative we can extract from it, right? yes, the broad trends to

tell you something on a day-to-day basis. that does have some underlying effect. you just have to acknowledge the limitation. that is something that i think we will be able to improve over time. the american health care system in particular is great at transmitting and protecting the type of data that makes people money. referrals, that sort of thing. to collect public-health data so you get a better real worldview of what is happening on the ground. romaine: really appreciate it. coming on this network, david rubenstein has a new segment, leadership live. feature theto marriott ceo. stated for that. this is bloomberg. ♪ -- stay tuned for that. this is bloomberg. ♪

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>> there's almost 70 vaccines we are now tracing. one went into human beings, the and there isne, the feeling that if it was successful, they might be able to produce it in larger quantities in september or october. however, the issue of cure is first going to occur with control. the effort to control the virus first, track those who have had