minutes, closing out reports for the big banks. jobless jolt. estimates for initial jobless claims from last week range from 2 million to 8 million. and just covered in oil. opec releasing its monthly report as some crude sales were single digits in the u.s. welcome to "bloomberg daybreak: americas" on this thursday, april 16. in the market, one of the headlines in the last couple of hours was christine lagarde's own whatever it takes policy. take a look at euro-dollar. you can see the lows of the session, as she says the governing council is committed to doing everything necessary within its mandate to assist through the crisis. in other asset, feels like what was gone tomorrow is here yesterday, whatever you want to

call it. netflix yesterday closing at an all-time record high. oil a little higher as well, but still around an 18 year low. still brutal for the market. just checking in one more time they comec had before out. time now for bloomberg first take. here to discuss from our in-house team of wall street veterans and insiders, michael mckee, and damian sassower. mike, we know that jobless claims are going to be bad. we don't know how bad. i think the question is, how do markets actually respond to this, when sometimes they want to respond to bad data, sometimes they don't? michael: i'm not even going to go there. yesterday we had dismal numbers on industrial and retail sales. we thought they were priced in, but apparently they weren't. you've got to wonder if we've

priced in jobless claims because we've talked about it so much over the past three weeks, but we are expecting 5,500,000 as a consensus. if you get that number or even a little bit below it, we will have wiped out in one month all of the jobs that were created since the great financial crisis. this is a staggering number. it is almost impossible to comprehend. there's just no way to know how the markets will react. damian, i've got to ask you at this point, how are we seeing markets in terms of their overall worth, how they are thinking these days? you look at what happened yesterday with the reaction to the numbers. you've got christine lagarde out this morning from the ecb, repeating basically we will do whatever it takes. the imf is sending money to emerging markets now.

gotwe satisfied that we've a low, and these are just volatility moves on an infrequent basis, depending on what the feeling of the moment is? damian: i think emerging markets, and certainly central banks are indeed doing anything they possibly can. that means taking inflation-adjusted nominal rates into negative territory, so real rates, as it were. we are seeing the philippines overnight surprise cut by 50 basis points. we saw south africa cut by 100 basis points early in the week. these are the high yield is, and we expect more cuts coming. we expect malaysia, indonesia, a lot of others to retest that. this means that em currencies are going to we get because -- are going to weaken because they are putting a focus on growth. the jp morgan em currency index down there team percent year-to-date. that is now down 6.5% per year

over the last five years, a cumulative return of down 30%. with em vol at literally two sigmas above their g7 counterparts, we need to see that normalize in order for risktakers and foreign investors to return to the market. this was a highlight in the imf meetings all week long. they have been accelerating. we need to do something to make them more attractive to foreign investors. damian?at is that, the only thing i can think of is higher yield. i agree withn: you. they are doing everything they can to drive yields lower, but that is not going to help in terms of getting foreign investors back into the market. the one thing overnight i am focused on, we see a lot of earnings coming up, but we emerging-market guys like to focus on things like taiwan semiconductor come of the third-largest em equity member.

qualcomm,s for apple, you name it. but beneath the surface, where i live and breathe, they have revised lower all of their forward estimates. i am talking for the foundry industry, made-to-order chips, growth, which was expect it to be 20% just three months ago. you really see some forward guidance coming off, and that does not bode well for emerging markets writ large. alix: let's pivot off of that because volkswagen is coming out , withdrawing its 2020 outlook as well. the economic perspective if you are in investors, i wonder how much we care about those headlines right now. we obviously care from a long-term perspective, especially with how quickly you can ramp up supply chains, but we seem to be digesting that kind of news relatively ok. michael: it is hard to react when everybody is withdrawing their guidance because you don't know exactly where things are going to come out.

. i think where you will see more reaction in the markets is when we start getting governors or others telling us what their plans are going to be to restart. any real disappointments, anything that pushes is back into the summertime, is probably going to have a reaction because you're are building your earnings profile on the idea that we will be back to work sometime in may, or at least companies will start producing again sometime in may. i'm watching a company called spirit aerosystems. they make 70% of the boeing 737. we talked about problems with that airplane. this is a company that fell into the fallen angel category after the fed's deadline, so in theory, they are eligible for loans, but stock is down 71% in the last couple of months. if boeing can't get up and running, if the public doesn't return to flying, this is a company that will be in real trouble, so how do you price something like that? alix: good question.

i don't think the market really knows how to price volatility off of that. interesting stat out from blackrock. they saw net inflows further invest in products for the first time in five years, about $31 billion in the first quarter. back, or iss coming there just a lot of cash? damian: when you think about blackrock's long-term investment products, i don't know if these are retail products, what have you, but when i think long-term come i am thinking engine funds, insurance companies. the government is now allowing pensioners to tap these funds for emergency cash. so what are these funds going to do? they are going to obviously have to turn inward. that means there's less demand for them, so you may actually see output. i don't know if that is what is driving larry fink's comments, but that is definitely a risk. if these guys aren't able to

meet their now higher funding costs, all bets are off. so a lot of these products aren't equipped to deal with the rates they need in order to survive. alix: here's what i find really interesting, though. oil price is trading around $20. if there is stabilization, maybe it is at. . $20 then you have the gulf nations -- maybe it is at $20. then you have the gulf nations raising cash. how do you think about that? damian: it makes my stomach hurt. it is like indigestion. saudi arabia raised $7 billion. israel, on andr, on area these are all high-grade em issuers. issuance forof emerging market dollar debt funds and credit funds to take in, and with the outflows we have been seeing for many of these funds, it just adds to the

stress and the pressure on them. it is definitely something to watch. as it comesally with higher rates. my question to you, just to piggyback off of that, six flags issued in the high-yield market with seven point 75%. marriott is selling bonds. we are talking about how some covenants might not be activated. does the fed want to do stuff like that? michael: i think that is the good news here. obviously, yields are going to be extraordinarily high, especially for the high-yield group. we saw that was carnival, paying an enormous amount just to get some bonds out there. that's the thing the fed wanted to do. that is the real reason they are even talking about buying in the junk market, which they haven't done yet, but they could do. the idea is there is a secondary market. we are a buyer of last resort. if you want to come to market, there will be a secondary market. those things can get traded one

way or the other. these companies are finding the pipelines open. whether you want to risk that kind of security in your portfolio is up to you, but at least you can if you want to. thanks, guys. super appreciate it. thanks very much. stay with bloomberg. we have an exclusive interview with robert kaplan, dallas said president, coming up at 12:30 p.m.. . here in new york. one other story i want to talk tsmc, semiconducting maker sticking with plans for aggressive capital spending this year. tech bellwether because it plays such a big role in the supply chain. it provides chips for apple as well as huawei. one to watch there. lots of big banks out was first quarter results. we will break down those morgan

stanley numbers for you. this is bloomberg. ♪

alix: we are waiting for morgan stanley results to come out within the next few minutes. joining me our bloomberg's sonali basak and alison williams. what are we going to be paying attention to? sonali: for morgan stanley, the one thing very different about them is their massive wealth management unit. how did that fair in the quarter? where there outflows or asset levels lower? and what is the net interest income expectation? on trading, morgan stanley is the number one trading house. huge electronic capabilities. were they able to keep pace with

rivals at jp morgan and, including any fixed income business, which they have been trying to expand? alix: what is going to be the standout? alison: two things. one, equity trading. we have big expectations now that we have seen the results across peers. derivatives has been a huge part of that. two, the pretax wealth margin, as sonali said. that has been a big business for them. they've made huge progress on that market over the years, but there has been some market help. we will lose a little bit of that market help this quarter in terms of asset prices and rates. how does that margin hold up? yesterday, we saw that goldman was able to trade is rates got hit. his morgan stanley able to do the same thing? alison: my guess is that, coming

out of this quarter, morgan stanley and goldman sachs, their credit risk is going to be seen as a support in this uncertain environment. the big question relates to loan loss provisions in the lending businesses. i think the important thing this cycle versus the prior cycle, there was a lot of balance sheet risk that brokers typically didn't take, that showed up as the prices went along. alix: alison, the earnings are out, so i am going to interrupt you. earnings coming in at one dollar and one cent -- coming in at $1.01 per share. revenue coming in at about $4 billion, sequentially a little bit lighter. in ated earnings coming $0.99. at interest income coming in $1.63 billion. equity sales and trading stronger than estimated, but million, $2.4

billion. at $2.2 billion. investment banking, $1.63 billion, also moderately better than estimated. the stock is down by almost 2% in premarket. there pretax margin in wealth atagement also delivering 26.61%. that is where we are at. strong equities, strong investment banking. both management sequentially lower for morgan stanley. what is your initial reaction here? sonali:sonali: wealth management revenue is a little bit before expectations. analysts are going to want some color around why exactly that is and what the expectation is for the end of the year. during this quarter, morgan stanley also announced that massive e*trade acquisition. so the question is, are they

going to be able to sustain the growth they see in that? , you haveer hand cc numbersnd fi well above that. jp morgan is the biggest ficc shop on wall street. will they be able to maintain that market share? alix: just in absolute terms, j.p. morgan equities trading coming in at $2.4 billion, but we don't know what the percentage is yet unless you have really fast percentage gains in your head. how about that wealth management number? alison: it is a little light, but a lot of the impacts we are seeing in wealth right now relate to the asset price moves,

so i think what we are going to want to know is more what were the flows in the quarter, how is that holding up. it looks like equities up maybe 20%, so on a percentagewise basis on a year-over-year basis, a little bit below some of their peers, but again, the important context in terms of the client base of the big corporate banks, how that is a lead-in to the corporations and all of the haveatives activities may been why morgan stanley and goldman are trailing in that business this quarter. . that's what we want to hear more about. alix: the pretax margin for wealth management, 26.1%. do you like that number? alison: i think, given the circumstances, i looks like it is holding up well. we are going to want to look and see was there more of a lien towards transaction revenue in

the business in the quarter, and really, i think the flows help us understand a little bit better the health of the business is more flows going towards less risky assets, people holding things more in cash, so i think that's what we will be looking for there. alix: i'm also interested in this headline. i think goldman had the same note, morgan stanley says over 90% of employees are working from home. his been a lot of chatter and some great reports out in terms of what the different banks are doing, and which is having more stress on their traders to come in and make that money. i think it is interesting that certain ceos are highlighting that. alix: dce -- sonali: the ceos are trying to show they are doing everything they can in this era to make sure living standards are good for their employees, as well as doing the most they can for clients. at goldman and morgan stanley, equities and electronic trading

is a big deal, so they want to show the their electronic capabilities are paying off. , interestingly, costs are up at both firms. expense ratios are higher. there volumes are up. some of these are volumes driven expenses. morgan stanley said they would retain employees through the net the year -- through the end of the year, and keeping those costs in line through the end of the year without job cuts is going to be in as well -- going to be a question as well. alix: morgan stanley ceo james gorman saying capital liquidity remains strong, etc. what is going to be your biggest question for him on the call today? what would be? alison: i would probably focus more on exactly what they are seeing in terms of clients, what they think will be necessary in terms of executing some of their pipeline. also what they are doing in

terms of execution. is there any change to the way that they are thinking about the e*trade deal? and on the cost side of things, obviously there's some stickiness to the costs this time around. what are they thinking about in terms of investment spending? will they continue to charge ahead on those expenses, or will they re-examine as some other banks are doing? alix: and also to that point, talking about what their client activity is, you made the argument that this would help goldman yesterday because their client activity was so good, and they had less card and lending exposure to individuals, and that is what morgan stanley can also see. then they need to keep delivering that. it also exposes the banks to more gyrations and more negative volatility. sonali: right, i double-edged sword. flocking to the wealth management business, but where they stand on expanding that lending business while also doing it was possibly?

we tend to seem risk more on the consumer, and folks are more willing to lend to corporations. another interesting point in this earnings release is investment management because, again, they were not helped by the market. asset management revenues lower due to asset prices, but you do have inflows. their assets under management are now at $584 billion. wanted to point that out because that is aces you get area -- that is a strategic area that morgan stanley does want to grow. alix: also want to highlight a icctle anecdote about the f revenue at $1.2 billion. they said it could be a little stronger, but you could make the argument that that could be in reverse now. forward,, what is the most important guidance that these banks can give right now, considering the unknown circumstances>

-- the unknown circumstances? alix: most important --alison: most important is what they are singing about in terms of cost. ,he big question is more credit which is outside of the main concern for morgan stanley, although we do have some marks there. the costs or something they control, so understanding how they are thinking about that, for the lenders who want to know their revision assumptions. that is a smaller issue for morgan stanley. a lot of the risk really just relates to capital markets and asset prices, which they don't have control over. are therequestion is opportunities and some of the business isassets where they can raise money and take advantage of the price declines, and see some growth with that? sulla -- right, thank

thanks a lot. tuning later this morning. we will be speaking to james gorman, morgan stanley ceo. any charts we use throughout the show, go to gtv under terminal. browse the features, check it out. gtv . this is bloomberg. ♪

alix: just to recap morgan stanley earnings, adjusted earnings coming in at $0.99 per share. the wealth margin business, $4 billion, a little bit like. that is what the market seems to be focusing on. no doubt a question for james gorman as we interview him at the 10:00 hour. this is bloomberg. ♪ you doing okay?

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a risk off day in u.s. equities. euro-dollar is still a relatively strong dollar story in the g10 space, particularly against the euro. ecb president christine lagarde basically saying her own "whatever it takes," also talking about euro liquidity. btp yields today lower than 15 basis points. doesn't access the esm and get some support, that means higher yields for the country. that is what we have been seeing play out. potentially why christine lagarde is in the market discussing it. oil pretty much flat. the new thing is maybe we will pay u.s. producers to keep oil in the ground. that came out from the u.s. government. we are breaking that down later in the hour. joining me now is julian emanuel , btig chief equity and derivatives strategist.

good to catch up with you. we are coming off of the morgan stanley earnings and all of the big banks reporting. how do you think about earnings season this time around? julian: you really don't trade earnings season for the most part. when you think about it, with the vix at 40, there is just so much noise from day-to-day that you really need to focus on the bigger picture. that having been said, we acknowledge that the price reactions to the earnings in financials the last couple of days have really been somewhat disappointing, and from that point of view, when you look at the next several weeks and look at the world making this transition from focus on the case counts of the virus to the economy,reopening the we think there's the case to be made for a little bit of profit taking after one of the most serious rallies of all time. alix: yes, and i feel like that

is what we, and some ways, learned from the banks, that you sell the rally. julian: well, it's not quite that cut and dry because actually, if you look at it, there is this very pronounced tendency going back 30 years worth of bear markets for the stocks that led to the downside during the bear market space, the biggest underperformers, once the bear market can conclusively said to be over, they become the leaders. from that perspective, what to us was meaningful was off that march 23 bottom, financials actually led. i think that surprised a lot of people, but it was one of the sectors that led. what the last couple of days is telling us is that, with these building uncertainties around the reopened, we've probably gotten just a bit too far ahead of ourselves. alix: it also raises the question of how do you play a reopening event. from all indications, it is not

going to be binary. it is going to be a slow grind. so how do you then deal with that, when on an idiosyncratic basis, it is going to create winners and losers, but on a macro basis, it is going to be slower growth, central banks heavily involved? julian: no question about it. when you look at it, it is absolutely astounding when you measure the total dollar value of fiscal and monetary stimulus into the system. by our estimates, enacted and pending gets you to over 45% of u.s. gdp, and that is clearly -- i mean, the intent was to build the bigger boat to do that very quickly. it's been deployed. from that perspective, we think that is part of the narrative of the bottom building process. so on balance, if you are a long-term investor, you should be adding to your positions on what we think will be pullbacks,

carefully and slowly. if you are taking a training perspective, we think this is a great time for a lot of the stocks that have won over the last several weeks, and there are stocks that are up versus the broad market top in mid-february. those names are levered to the shelter-in-place economy to a greater extent. we think it is a great time to sell upside call options against those names. ,lix:alix: in terms of sectors which sectors are we talking about? julian: you actually see it across a slew of sectors. a lot in the consumer discretionary and consumer staples, technology. we think of the sellers of bleach, the sellers of packaged goods, the package delivery service that we all know is the biggest behemoth. they've had tremendous runs on the assumption that we are

making this transition to a more stay-at-home economy, and that could well be the case, but in the short term, the imperative is to get the economy reopened, and those stocks have probably come even further than the broad market and we think could be dead money for the next several weeks to a month or two. alix: what do you do with small caps? julian: that is the real question. very distressing that small caps continue to underperform, particularly within the context of the fact that the majority of government emphasis has been on really trying to make a robust lifeline to not just the small caps, main street businesses themselves, but more importantly, the employees of those businesses. we think that ultimately, if

this is all going to be successful, that you are going to have to have a point where you are going to want to dip your toe back into small caps. that may not be today, but our suspicion is that it is going to be more likely perhaps with a little bit more uncertainty, may be going back more into the low we madee high- over the last several weeks. that could open up particularly as we expect to get the further stimulus of phase four. isx: with the vix at 41, that appropriately priced for the scenario that you are laying out for me? isian: we really do think it , and generally if you are in options professional, you're thinking about strategies where, for the most part, you are going to take advantage of that kind of number. we say if you're going to buy an option, you probably want to

figure out an option to sell as well. our point of view is that you really are likely in a range of higher volatility for quite some time. call it roughly 35 to 55 on the vix. but given the fact that there is the hope of the economy reopening and how that is going to unfold set against the uncertainty of how that is going to happen, we think in the low 40's is probably very appropriate. alix: so do you also feel like technology is going to be one of the winners? i brought this up earlier, netflix hitting a record high. john authers is loving this point, bloomberg opinion columnist, that we are not getting new subscriptions to netflix. we are just watching a lot of it. so it may be a misnomer. julian: technology, from our point of view, there are a slew of technology companies that, as we all know, our cash generating

machines. to the extent that we get a retest of the lows, where there is a bit more fear that comes into the market, as was the case in march, those kind of names, low debt, high cash, will absolutely be places to hide. they will definitely outperform on the downside. but i go back to the work we have done, that we think it is a matter of when we can conclusively come out of this bear market phase. the stocks that held up the best tend to be underperformers. technology hasn't been a market outperformer until the last several days. thatrt of see it in line you can definitely make the case for technology. alix: to round it all out for me, how do you hedge any downside? what is the best way? julian: the way you are going to do that when the vix is this high is, for the most part, we think you are actually selling

call options against your holdings because, when you think about it, the premiums are so rich right now that essentially, you are hedging for percent, 5%, 6% of your downside, but really, the way to think about that is if you are thinking long term, and we think the market does go higher long-term, you just have a little bit more cash on hand and your position sizes are smaller. alix: always good to catch up with. thank you julian emanuel of btig. we want to give you an update on headlines outside the business world. viviana hurtado is here with first word news. viviana: president trump will unveil plans to relax stay-at-home guidelines. he suggests the pandemic is plateauing in parts of the country. yesterday, he spoke with more than 200 business leaders. finance executives telling him more testing needs to be in place before people feel comfortable coming to work.

he warned he may use an untested power to make both houses of congress adjourned. his goal, to make appointments to government jobs without senate approval. the president complaining senate democrats are holding up nominees for jobs that, according to "the washington post," are open because no one has been nominated to fill them. the u.k. is expected today to extend its nationwide lockdown. british foreign secretary dominic raab will make the call. he is standing in for prime minister boris johnson, who is recovering from the coronavirus. health officials say there are signs the u.k. may soon be past the worst of the pandemic. 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. coming up, oil holding mirror in 18 year low on the supply glut. what does it mean for the u.s. energy industry? we will speak to adam waterous.

you have a bloomberg terminal, check out tv . rewatch anything you may have missed. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, sheryl palmer, taylor morrison ceo. ♪ viviana: this is "bloomberg daybreak."

amazon ceo jeff bezos wants to test all employees for coronavirus. that includes those with no symptoms. mr. bezos laying out the steps letters to shareholders. now to the price of gold. it could hit $2000, this from the world's biggest gold miner. the ceo saying the level of stimulus injected into the economy underpins gold prices. gold hitting a seven-year high and trading at more than $1700. the trump administration may pay oil producers to leave crude in the ground. the proposal from the energy department would effectively make a part of the u.s. emergency stockpile up to 365 million barrels of oil reserves. the plan is aimed at easing a

glut that could push some into bankruptcy. that is your bloomberg business flash. alix: let's stay with that. oil hovering around $20 a barrel. joining me is adam waterous, waterous energy fund ceo and managing partner. the u.s.ou think of government potentially paying oil drillers to keep oil in the ground? adam: good morning, alix. it actually could be a reasonably constructive thing for both the industry and for the government. it is good for the industry for liquidity, a cash injection to stave off some potential bankruptcies. it is likely a good trade for the government. they are buying oil obviously at 18 plus year lows, and have the validity to store it for some period of time and potentially

resell it for a much higher price. for those two parties, it could work out reasonably well. unfortunately, the timing is not great for investors in that, from an investor perspective, what should have happened is the government should have really been paying the industry to stop drilling and lay down their tools five years ago. if they had done that, they would have saved investors about $500 billion. to give you a quick sense on that, between 2015 and 2019, the industry, the u.s. oil industry ,pent about $100 billion a year and throughout that time, only about 15% of the companies earned for cost of capital, meaning 85% or so of the industry was just burning capital in the last five years. so it is not going to do anything to save those investors

, but in the short-term, it could be helpful. perspective, does it create more or less opportunities for you? on the one hand, it may help keep highly indebted companies alive when otherwise they would fold, which may create more opportunities on the flipside, but you have more companies that shouldn't be there still there. adam: potentially. i don't know if it is going to be enough to fundamentally change the underlying economics of the industry and what is going to change. to give you a sense, we think , tops, one in five u.s. shale companies can meet cost of .apital above $55 a barrel when you and i last visited in early february, that is why we

are talking about peak permian. capital was being withdrawn from the industry, and the industry , were this covid-19 crisis already saw it heading to decline in production. happenedly, what has with this crisis is that the peak permian was just being sped up. it turns that production decline, the slope of it from a green run to a double black diamond, to use a skiing analogy. but as far as an investing , you can go to what is likely going to happen as a result of this, and that is going to be quite rapid industry consolidation.

the reason being we have falling production, and combination with lower prices. you are of course having increasing leverage, see you will have a lot of financial gives stressed -- a lot of financially distressed companies. very few of these companies are going to be able to find buyers. the vast majority are going to be restructured, meaning sincerely -- meaning essentially swap debt for equities , and these former debt holders are going to sell. the delivered environment, there's going to be few cash buyers, so most m&a is going to be share swaps to cut costs and gain scale. to give you the scale of risk u.s. oilon, and the 30 companies, we think maybe half a

dozen were earning their cost of capital at $55 before this. dozen areaining two all targets for consolidation on that. based on that, usually i would ask you where you see opportunities. i think the question now is when you see opportunities. adam: we start seeing opportunities over the next six months quite quickly. you've already seen some financially distressed companies either entering bankruptcy, or thers higher debt restructuring advisors. the fractured state of the u.s. oil business can't be overstated. to give you a quick sense on warng, the market share

on march 6,nitiated we are going to increase production from 9.5 to 12 million barrels a day to try to go to war with the u.s. shale business, to give you a sense of the direction of that war, by the following -- the duration of following tuesday, the vast majority of the u.s. shale business had all really announced cuts to capital expenditures. the war was over in a long weekend. it was shorter than the seven days war, longer than reagan invading crimea, but not much longer than that. to your point, it was going to be a problem anyway. we've got to leave it there, but i really appreciate your

perspective today. adam waterous of waterous energy fund, thank you very much. in today's wall street beat, the firm cofounded by howard marks looks to be the biggest distressed fund ever. oaktree would buy up debt in struggling companies in some cases and see control of businesses and restructuring. and chief investment officer scott minor deployed about $7 billion in distressed credit markets last month, almost three times as much as private equity giant kkr. coming up, g7 versus em currencies. we are going to get to it and look at what volatility is telling us in today's trader's take. this is bloomberg. ♪

alix: time now for trader's take. joining me is bloomberg intelligence.

what if you got today -- joining me is damian sassower of bloomberg intelligence. what have you got today? em implieddamian: currency volatility is not declining at the same place we are seeing for g7 nations. central banks across em are cutting rates aggressively, turning real rates into negative territory, and this is keeping fx implied vol elevated. alix: so how do you trade something like that? damian: what you do is basically say, we are not going to trade it because the uncertainty is too high. you must remember, the jp morgan em currency index is down 13% year to date. that is 30% over the last five years, and average per animal return of -6.5%. you must see volatility levels normalize to be able to convert dollars into local

emerging-market currencies. but at this stage, it seems a bit premature. alix: absolutely. plus, real yields on local currencies are basically in negative territory. to your point, you need that much more incentive. always good to catch up with you. thanks very much. coming up on the program, more on morgan stanley results and the bank earnings with marty mosby, vining-sparks analyst for equity strategy. that stock is now up by about 0.8%. this is bloomberg. ♪ because you can't get to the theater, we're bringing

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thursday,on this april 16. i'm alix steel. let's take it from the top. goldman sachs ceo david solomon says they see 6% contraction in the u.s. this year as all banks struggle to assess how much to set aside for losses on loans. sonali: initial reaction is that wealth management number, where revenue is a little bit below expectations. onlysts will want some color why exactly that is and what the expectation is for the end of the year. alix: meanwhile, all banks see solid revenue. president trump talks with business leaders on plans to reopen the u.s. economy as initial jobless claims mount. expectinge are 5,500,000 as the consensus. if we get that number or just a

little bit below it, we will all wiped out in one month of the jobs created since the great financial crisis. alix: now the market waits for first quarter gdp, industrial production and retail sales from china. >> we cannot expect the same amount of stimulus in china. alix: the imf says growth in asia will likely slow to a standstill in 2020, something that hasn't happened in 60 years. this comes while the g20 provides temporarily debt relief. >> they could only limit the damage. alix: the current oil price shock helps some economies, while pummeling others, as oil demand sinks. >> we expect this year global oil demand to decline 9 million barrels per day. is remarkable the size of the oil price shock you have. if you didn't have coronavirus, that would be the primary thing

we would be talking about. alix: opec follows suit as some oil cells for single digits. may pay tothe u.s. keep some oil in the ground. we are losing some steam here. the s&p basically trading at neutral. europe giving up most of its gains. you're still seeing some relief here within the european bond market as well. italy yields down just by nine. we were down by 15 basis points. christine lagarde coming out with her own "whatever it takes" statement. that is kind of losing a little bit of steam here. japan now declaring a full on state of emergency. the small business administration loans ran out of funding today as well, so those are all on the market. morgan stanley down by about 0.6%. let's get more into morgan stanley. wealth management revenue missing in the first quarter. joining me with more is

bloomberg's sonali basak, and marty mosby, vining-sparks director of bank and equity strategies. walk me through what we are learning on the media call. sonali: then come the questions. we see from the ceo, who spoke to my colleague, that trading revenues are down in april. tradingtion is if those numbers are sustainable, not to mention the percentage increase we saw was a little less than what there was at jp morgan in equities and ficc, and that goldman sachs. the market share question will also come into play in that analyst call. lending was up, deposits were up, but what is the expectation moving forward? morgan stanley did say in their release that they don't know whether these financial targets they set are sustainable if these trading figures don't hold up. so more clarity around their goals for the rest of the year will also be continuing to come up. alix: is that similar to what we

heard from goldman sachs, or is this a unique thing to morgan stanley? sonali: interestingly, james gorman tends to set goals that the bank tends to blow through, and he tends to account for all circumstances. so it is good for him to come out early and say we don't know where we stand in a tough environment. at goldman sachs, they said just yesterday they were also accounting for a normal operating environment. obviously, this is not a normal operating environment, but they are holding true to their medium to long-term goals. morgan stanley's long-term goal looks almost like a jp morgan overturn, so whether that is still achievable after this more immediate hit to the economy is a question. get anet's try and answer here. marty, what do you think? marty: really, we need to completely pit, and that is what the management -- completely pivot, and that is what the

management teams are trying to do. when you have these economic disruptions, especially one is uncertain and unprecedented is what we are dealing with now, it is really all about capital and dividends, and what are you being able to do in the sense of what are your shocks that are going to come through the system. instead of saying returns are down or we are not making our return goal, that is irrelevant. what you are really looking at is and you earn your dividend? that is the first thing. morgan stanley earned just over a dollar in earnings. they pay out just over $0.35. so they have a really strong cushion between those things. their tangible book value, the thing you are trying to defend on the backend, went up 7% in the first quarter. if you look at their stock price that was basically around $38, and their tangible book value just went up from $40 per share to $43 per share, you took that

discount from 4% to 11%. so it is a different parameter arekey success metrics just different under these circumstances. alix: let's take the dividend question. neel kashkari had an op-ed in "the ft" today. "the most patriotic things banks could do today is to stop paying dividends and raise equity capital to ensure they can sustain during a market downturn." if you are making a point that it is all about the cash on hand, that kind of makes sense. marty: well, you've got to look at what we set up with see car first. ccar was built so that banks could go through stress tests. what regulators have required is that they cannot pull down there dividend. the reason is that to create financial stability, you have to show some stability. the dividend is the one thing

that banks can do to show that there is not a panic, that there is some stability built into the system. so the patriotic thing is to take care of your employees and customers, which these banks, as you are seeing in announcements, are doing in major ways that they couldn't do in 2008. so building what we worked on with regulators over the last 10 years, banks are in much stronger positions to be able to do all of the things, defer payments, to be able to get in there and be able to lend as we go through this process. but when you look at the losses just for morgan stanley, the losses they actually would have at morgan stanley is $32.3 billion. that is the amount of losses they are expecting to have in a downturn of significant proportion. the worst-case they can come up with. this quarter, they only had $1 billion they put into that mix in the sense of the losses they

took. that is only 3%. if you have that much cushion and you have excess capital even after you take those losses, after experiencing 3% of those losses, we are going to all of a sudden throw in the towel and imagine that we now have to start going to the for coney and measures -- to the draconian measures? if this thing extends into the summer and fall, we have to think about other levels of reaction. but we built this so that we can sustain dividends. there's no reason to give up right off the bat. alix: are the banks getting questioned on this on the call? sonali: they are certainly getting questioned about the dividend, and most have said they want to maintain their dividend so far. jp morgan saying they rely on it. the other end of the coin is folks are talking about how much less regulation the banks need to be extending more credit. something i want to point out is these top five banks, they are focused on small businesses, but

some of them are less focused on small businesses. jp morgan said at of this -- said as of this week, $9 billion in small business loans were funded. there's $350 billion available, and almost done. maybe i am doing the math wrong here, but wherever -- but where is all of that money coming from? marty: can i answer that? alix: please, go ahead. marty: there is a army of community banks across the , ittry that small business is their primary business. the bigger banks you are hearing in the earnings and that we see on the news are much more focused on corporate institutional markets, financial markets. but the 4000 community banks around the country are the ones on the front lines in this particular program, so that is where that money is going.

it is going through the banking system. it is just not going through the bigger banks. it is going to the community banks, serving those particular customers. alix: what kind of bank is going to be best positioned? on the one hand, you can have concerns about those small and regional banks that are going to be exposed to small business lending. then you have banks like jp morgan, which has an extended credit card arm. then you have the goldman sachs and morgan stanleys that are more reliant in some ways on heavy trading, that could see gyrations. which is the best, which is the worst bucket? marty: what we look at, first thing, banks really move in a macro sense. there's very little differentiation amongst the group as they come down and up in these big macro events that we go through. 2018 really reflected that as we went through those compression years, and then the next years when he saw the

bounceback. what you need to look at is really not profitability in the sense of returns anymore. it is really about capital, which banks have the most capital to be able to burn through longer and be able to sustain themselves before they have to start giving up on dividends or raising more capital. that is where you start to look at where those cushions are built and how much earnings power they have in the first line of defense to offset that. so far we have seen, across the board, banks being able to pay for what they needed to do this particular quarter, pay for their dividends. the only one that didn't was wells fargo, who came in already hampered on their earnings power. if you look at their capital, because of their constraint on growth in their assets, their excess capital had grown to a point that even just that breakeven, they can pay their dividend for over seven years. we look at it so far, this is a pass fail, and in the first

quarter out of the gate, we have seen passes across the line with all of the banks that have reported so far. that is really what we are watching. second quarter is going to get worse because the uncertainty around the shut down and what the economic impact is. it is not like we are out of the woods here. we have to go through the second quarter, assess where we are at, but so far we have gone through the thresholds we needed to stay on. alix: really appreciate the conversation. andy mosby of vining-sparks sonali basak, thank you. tune in later for our interview with james gorman, ceo of morgan stanley. coming up on this program, u.s. stock futures paring some gains. we are waiting for initial jobless claims 8:30. they will be bad. how bad? jonesichardson, edward strategist, will join us next. this is bloomberg. ♪

alix: some economists are seeing the u.s. unlimited rate surging this month as we wait for initial jobless claims later this morning. joining me now is nela richardson, edward jones investment strategist. the ranges for this week are crazy, 2 million to 8 million people unemployed. when do we hit the peak initial jobless rate? you can't lose the same job twice. nela: that's a good question. coming.that we are it is going to be bad. that peak rate should head around april. in the height of

jobless claims in the last recession was in january of 2009. that was two months before we saw the bull market in march of 2009. once we hit that peak, it is going to be a lot of uncertainty around when that timing is, we can start taking a sigh of relief, not that the worst is over, but that we are at the beginning of a slow recovery in the economy. alix: does it stop there, or do we see second-round effects? we have the initial round of layoffs, then we start to reopen certain sectors. and maybe we have second-round effects of the virus and have to close different areas again. how do you model it? nela: you can't. you can't model it because this is unprecedented. you can make some assumptions and guesses, but history tells you what can happen, not what will happen, and this is

unprecedented. a lot of the commentary i've heard has been the economy reopens like a light switch. we just turn it back on. as you've noted, it is more like a dimmer, that we slowly start to brighten certain pockets that we are comfortable with a structure of testing because this is a health care crisis, not an economic one. that can support a rebound and a back to normal of economic activity, and that is when you see a slow process. alix: what is your base case that you feel confident in right now when it comes to growth, the unemployed and rate, etc.? anyone who feels confident in a base case is probably not looking hard enough at the impact of the economy. what we do know is that this is a health crisis. we know that the initial conditions going into this downturn, which will be

significant, particularly in april, the initial conditions were solid. we had solid consumer spending, unemployment near record lows, home equity at record highs. those initial conditions will help the eventual recovery, amplified by this unprecedented amount of monetary and fiscal stimulus. in terms of what i feel confident or comfortable in, i am comfortable that the fed has thrown every kitchen sink in the existence of the world at this problem to keep the flow of credit to households, and i think we will see, hopefully in the second half of the year, the beginning of a recovery. alix: today we are just learning small business loans are maxed out. they are pretty much at capacity. how much more do you think we

are going to have to expand that , maybe even the small and medium-sized business bailout as well? analysis andnefit how you implement and execute is part and parcel with that role. this first-come, first-served approach to giving small business loans might need to be reevaluated. it is not just how much the government is lending to small business. who is getting the loans and at what time are they getting them? i think the program will be expanded. i hope it will be expanded in such a way that is more aiming for those businesses that are most in need now in terms of their cash flow, and then building on those businesses that are the job creators into the recovery. alix: you mentioned the fed doing everything they can. a few more things have been floated, buying junk bonds, and

yield curve control. do you think we will see any of those things, and should we see any of those things? nela: we might. the fed's approach is very different this time around then in 2008. they pretty much opened their toolbox and started throwing things at this problem in early march, and in everything you can think of, they've tried to do. yes, they can go further. yield curve control has been used in japan. one redline they said they wouldn't step over is negative interest rates, so i don't think they will go that far. but yes, they could go further in other dimensions and securing that that credit flow continues. beyond the credit market, if the fed were to move into equity purchasing, equity instruments, they would need an act of congress. that is another hard stop in terms of monetary stimulus.

alix: always great to catch up with you, nela richardson of edward jones. coming up, it is oil's collapse. we are waiting for opec's monthly report. we will look at the impact on u.s. all your producers, next. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." united airlines and long-term airlines-- united warning employees of bleak times and long-term job cuts. united plans to further cut its flight schedule to roughly 10% of capacity. that is the plan for 2020. royal dutch shell is setting a

bold target on cleaner energy. it plans to cut net emissions and get rid of the bulk of greenhouse gases. stepsfollowing similar taken by bp. bloomberg has learned of a proposal from the u.s. energy department that would effectively make a part of the u.s. emergency stockpile up to 360 5 million barrels of oil reserves. the plan is aimed at easing the glut that has pushed drillers into bankruptcy. that is your bloomberg business flash. alix: thanks so much. joining me now was more on oil, bloomberg's annmarie hordern. we are waiting on the opec oil report. at the same time, we are seeing single-digit pricing in the spot price market. annmarie: if you look at some of these swaps, especially the a very tightat is

market. sprites will continue to be very weak. especially when you look at things like jet fuel in the market, these are industries under serious pressure, so you are seeing demand destruction even more so in these parts of the market because they are hit by the global shutdown, similar to what we see in gasoline. just look at the physical market, what is impacting the gasoline market. we haven't seen how low gasoline has been since landing on the moon in the 1960's. it is very tight -- a very loose market at the moment. these opec+ production cuts don't come into effect until may, so what does that mean? right now, we are seeing some deep discounts to asia. i think the price war is technically over, but there is

serious market share war right now. alix: absolutely. great perspective. coming up on the program, stay-at-home orders are hitting housing markets. we will get the latest read from shale -- from sheryl palmer of taylor morrison. on the markets, the dow slipping into negative territory. s&p futures still holding onto again. we are minutes away from the latest read on jobless claims. this is bloomberg. ♪

alix: welcome back to "bloomberg daybreak: americas." i am alix steel. you are a heavier market.

s&p futures up six points. the dollar using a bit of steam. switch up the board. you can see that reflected in btp. doistine lagarde seems to her version of whatever it takes today, and then you see a recovery in btp. down nine basis points. we were down 15. initial jobless claims coming in at 5.2 million. that brings the grand total to 21 million over the last four weeks. 5.2 million. i heard estimates from 2 million to 8 million, so right in the center. a huge amount of people filing for jobless claims. we are also getting other housing data which we will discuss. building permits down 6.8% in housing starts down as well. mckee joinsmichael me.

initial jobless claims, 5.2 million. i guess they are less than the week before, but these are tremendous numbers. michael: one of the problems is we do not know how many of these are being delayed. bloomberg has an interesting story on how aid workers are not getting observed into the system even though the organization now allows them to get unemployment claims because they have to update their software to include them. so many claims have come in. some states may be behind in processing them. we could see this lower level continue for some time. if you're taking the total number of claims to this point, we are looking at -- i am just basically weh -- have wiped out all of the jobs created since the great financial crisis, since the low

in employment during the great financial crisis in february of 2010, the economy created 22,088,000 jobs and we have lost in four mixed 22,025,000 jobs. weeks.our this is an astounding number. i have dad in a few more because the prior -- i have to add in a few more, because in the prior week when we saw 6.6 million it has been revised up. the numbers are so astounding you cannot keep up. housing starts down 22%. that just came to her crash again. the kind of thing we would have blamed on whether before, but you can see the impact of the home prices hitting all at once. the economy going 100 miles an hour down the highway, hit a brick wall. , and february housing

starts revised lower as well. one quick thing is i am seeing the dow futures up triple digits. s&p up 18. is this what we are seeing? the bad data and we will rally on bad data? how do you interpret that? michael: it is probably not the data. the data is probably priced in. it may be that the politics is intervening. the markets are looking what president trump said last night about coming out today with a plan to reopen the economy. obviously he cannot reopen the economy. a lot of people say whatever his plan is will not work, that it is up to the virus and the scientists. the markets are looking for hope, and if he does some sort of splashy presentation about getting the economy open, that may be contributing to some of the enthusiasm. now up 180, s&p

futures up 24. risk on front and center. i want to point out the philly -- nonmanufacturing index that was for march, let me get back to the data, the philly fed index was down 56.6. we saw the same thing reflected in empire manufacturing. bad numbers in terms of data and how the activity has crawled to a screeching halt. let's get to that. , housingpermits off 7% starts off 22%. joining us is sheryl palmer, taylor morrison chairman and ceo. taylor morrison is one of the largest homebuilders in the u.s.. i appreciate you coming on and talking to us about this. give us insight. how bad is it? sheryl: good morning. always good to be here. i am looking at the numbers along with you. i do not think we should be surprised by the numbers if you

think about what is happened in the last 45 days. march was a tale of four halves. we started with some of the strongest activity the industry has seen in years. we just prove released our q1 -- we just pre-released our q1 and our orders were up, tremendous momentum moving into march. by the end of march it was a different environment across the country. or like usre closed by appointment only. stay-at-home orders differed across the u.s. it is very disruptive as people are trying to find how to --rate in that normal municipalities more staffed at various degrees by market. the permit process -- i heard some permits were quarantined for days at a time. i think there are number of different factors of where we came into the month and how we

will come out over the next few weeks. give me some insight into regionally? we have seen different orders from different states in different counties on the stay-at-home and what to do. can you give me insight as to where there is still activity, where there is a pause versus a. ? stop?sus a full most markets have deemed construction essential activity. there are some states that have not. wehink about seattle, where have generally been closed down for most activity, parts of california, it is not even by market by state. it is municipalities specific on what the operating protocols are. i will tell you i think the operating under the safest protocols possible and being very creative on how they

operate with the municipalities on inspections, both with individual progress inspections as well as completing a house and delivering it to homeowners. it is very different. most parts of the country have been deemed as essential activity, which is good news. michael: if i could ask a question, you do not know of people will want to go out to movies or restaurants because they are concerned about a second round of infection or something like that. if you save money for a long time you're ready to move into a new house or you had plans to do so and it was put on hold, that might not be affected as much. are we seeing that in the fact that building permits while down or down a lot less than starts? the idea your industry might come back faster than others? sheryl: personally i agree with

that. i think our industry was as well-positioned as possible for such an unforeseen event. very different today than when you think back to the financial crisis, where homebuilding led the way. i would say construction and the mortgage industry today are more like collateral damage. i do believe we will see a rebound very differently. it is hard to know exactly how. we've never seen such a stop of our economy, but i like to think that creates great potential as we get to the other side. environmentess today, working remotely is different. rangelver lining is the of options we are seeing. we are seeing a tremendous amount of activity. when i look at our online tours ,o our design center selection

our first week of virtual tours we registered more than 300 appointments for the first week of launching that new technology. we have written dozens of sales in our first few days, virtual sales were a customer never came into the sales office. we could have never seen that by year ago. think it speaks to the appetite of what consumers are looking for today. michael: with real estate, it is always location, location, location. in housing permits i see that while single-family permits were down, multi family were up. there was a lot of talk that this disease kills off the idea everybody in the millennial generation wants to live in apartments in big cities. do you see a trend change? sheryl: i do. i think when you're looking at the data, you're looking at permits, special on -- especially on multi family that could come to fruition over many

months. when i think about what the stay-at-home is doing to consumers and the idea of what suburbia means compared to horizontal living, i think it is an opportunity. we recently introduced our bill to rent new business. that is a horizontal living but lifestyle community. i think home offices, i think we are going to see the need for technology very different in the home than what we have seen before. we have seen quite a surge in the first time buyer coming out of apartments saying i need more space, i'm not going up and down the elevator anymore. alix: final question. what kind of defaults do you expect or mortgage payments not coming in? do you have a read on that? sheryl: i think as you look at the care act and what that has done for a forbearance

standpoint, it is too early to know. you have seen the same reports i have. the folks requiring or asking for forbearance and how critical it will be for us to get some sort of liquidity structure in place for these companies to help these folks over the next 90 days to six months as we get people back into the jobs environment. i do not know, given where we are today and how different this event, i do not know if this necessarily equates to full default. i think this is more of a forbearance event and the sooner we get america open the quicker people will be able to get back to paying their mortgage again. thanks a lot. appreciate the candor. sheryl palmer, taylor morrison ceo, and bloombergs michael mckee. stay with bloomberg for another read of the economy for an interview with robert kaplan at 12:30.

for now we want to give you an update with what is making headlines outside the business world. here is viviana hurtado. viviana: not so fast from industry executives to donald trump. they say that before people feel more comfortable returning to work, more coronavirus testing has to be in place. the president has consulted business leaders about reopening the economy. he says today the administration will come out with guidelines. president trump warns he may use an untested power to make both houses of congress adjourned to make approvals -- to make appointments without senate approval. the president complaining democrats are holding up nominees for jobs, but according to the washington post most of those jobs are open because no one has been nominated to fill them. spain is reporting the largest number of coronavirus cases in a week in the last 24 hours. they're almost 5200 new infections plus 551 fatalities. that is slightly higher than yesterday's number. the government says it has

already overcome the peak of the virus. 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. am viviana hurtado. this is bloomberg. much, appreciate that. coming up, how work from home is weighing on the internet infrastructure. we will talk to a man overseeing part of that infrastructure, equal makes president and ceo. peoplep, 5.2 million filed for initial jobless claims , basically erasing all of the job gains since the financial crisis. permits down, housing starts down. bloomberg users, interact with the charts we show throughout the program on gtv on your terminal. this is bloomberg. ♪

viviana: i am viviana hurtado and you're looking at the principal room. coming up later today on "bloomberg markets," james gorman, morgan stanley ceo. ♪ viviana: you're watching "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. ceo jeff bezos wants to test all employees for coronavirus. that includes those with no symptoms. he is spelling out the steps amazon is taking in his annual letter to shareholders. he says the company already has a team of scientists, managers, and software engineers. they hope to build a testing lab soon. hitprice of gold could

$2000. the world's biggest gold miner ceo says the level of stimulus injected into the economy underpins gold prices. it is trading at more than $1700. i'm viviana hurtado and that is your bloomberg business flash. alix: thank you so much. time for bottom line. we look at the companies in sectors worth watching. today our focus is on digital infrastructure. the virus outbreak is forcing many to stay home and businesses are learning to adapt to a remote working environment, as are my kid and my husband. charles meyer, equinix ceo joins us now. great to catch up with you. give me a perspective on how your business has changed in the last four weeks. obviously due to the work from home situation as well , demanded implications

on our platform has surged. where we a position manage a number of the exchange points for the internet around the world. we have a unique vantage point on internet scaling and we see a search on our platform of 25% to 30% in the last 30 to 45 days. that is typically the level of growth we would see over nine months to a year, typically. how is it for you? i bring up zoom when they had so many people on they have security and privacy issues. how has the stress been on your business ability? charles: we are built to respond to these types of things. data centers are mission critical infrastructure that need to be able to respond to all kinds of things, whether those be natural disasters. this is unprecedented in many ways. we put process in place to make

sure our customers can get in and scale their infrastructure and we can help them do that and business has responded quite well. we are in a complete work from home environment except for our frontline personnel inside the data centers helping customers every day. businesses responded well, and we are seeing that we are relying on a variety of digital tools to manage the business day today. well and weis doing are continuing to see the infrastructure scale nicely. do a lot ofe you international you have a good lens of what is happening globally. do you have a sense of how re-openings are going in china, how companies are responding, and how they are thinking about opening up? charles: we are a very global business operating 55 markets around the world with 200 data centers. we have seen this begin to move across the globe.

we do operate in china. we are continuing in a work from home setting in china, attracting things as they begin to move back to work and back to some more state of normal. we are also in korea. we are tracking that and seeing how they are doing with that. early signs seem to be good. we will continue to monitor that. how do you expect business profiles to stay after the -- to change after this? are there different ways to integrate streaming or working from home even when you are in the office? charles: i think that is absolutely true. people talk about this in terms of post 9/11 we saw certain things change in our lives that do not go back to the way they were before, and that will be the case here. people are being forced into a situation where work from home is so prominent and

required that they are needing to adapt the processes and tools they need to do that. i think people are seeing they can be effective with that and we will see a search in that. they will balance it with a more traditional work at the office setting. listen to the- i prior cast as i was waiting to come on and she was talking about how they are thinking about the impact of digital on their business. i think that is a big affect. havee are saying i have to a full digital strategy. she was talking about virtual tours for housing and construction and all the other ways digital is used. every business has to have a strategy to engage their customers and engage their employees with a range of digital tools. i think that is fueling the business. i do just to be clear, want to comment into the office. i do not want to work from home

every day. i really appreciate it. that was a great insight into that part of the universe for working at home. coming up, morgan stanley shares trading lower. the analyst call is underway. we will get the highlights, next. this is bloomberg. ♪

alix: we are also following morgan stanley earnings out. the analyst call is underway. the bank delivered on trading but missed on wealth management. sonali basak has been listening to the call. what are the standouts? sonali: one of the baker standouts is james gorman addressing financial targets, saying it could take them longer to hit the targets. another area i want to highlight is the trading and hedge fund performance. morgan stanley is the biggest brokerage on wall street.

low ins fell to a record the last few months, with trading volumes down 30%. it is hard to predict where trading will go from here. uncertainty clouded into the coming months. alix: what are some of the bigger questions you have not -- that have not been addressed? any elephants in the room? sonali: the big question nobody can answer -- how will this impact how people behave? we know what we have seen from the consumer from the rivals of morgan stanley, but the institutions in the first quarter have held up. that type of uncertainty as well as whether we will see more ipo underwriting, debt underwriting, high-yield market starting to open up more. that creates a glimmer of hope. who knows when it comes to the rest of underwriting, especially for ipo and investment banking activity and m&a. the stock now down at the

lows of the session. thanks a lot. bloombergs sonali basak joins us. coming up on "the open" with jonathan ferro, kristin bitterly will be joining him. you did have 5.2 million people filing for initial jobless claims. housing permits and housing starts falling off a cliff. futures managing to eke out a gain of 85 points. s&p off 13. this is bloomberg. ♪

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jonathan: from new york city for our audience worldwide, good morning. the countdown to the open starts right now. 30 minutes away from the opening bell. here is your thursday morning price action. equity futures positive on the s&p 500 by around 13 points. we gain .5%. in the bond market, the treasury market as follows. yields in two basis points on the 10 year to 0.6%. wti and crude set up as follows. wti $20 and $.22. opec sees demand for crude dropping to the lowest in 30 years. more on that later. let's start with things as we see them right now. it is almost embarrassing to talk about the equity market in a moment like the one we are in right now. 22 million jobless claims in four weeks. that is a decade of jobs growth gone in a single month. that speaks to the