glimmer, less on the proverbial light at the end of the tunnel. assembled medical experts and political nonexperts consider how to get back to normal. it will become a welcome every hospital -- it looks like every nation for itself. april oil just craters. we will give you no update on that. as they ever lower guesstimate when oil demand will return. you know what works, supply follows demand. at least, that is what the textbooks say. mr. mnuchin and pelosi, they craft a new deal for small business and hospitals. seven republicans. -- senate republicans. where in washington are the senate republicans? i am tom keene with francine lacqua. we thank our technical staff for trying to make this work day after day. francine lacqua in london.

i have to go to the gossip of london. we will get to oil with jim caron in a moment. why does the sunday times go after the prime minister of the united kingdom when he is just out of the hospital bed? that is a very good question. first of all, let's remember "the sunday times" and of good the times" were huge supporters of mr. johnson. there is a feeling that the fact the prime minister got sick maybe gave him a free pass in how he handled the situation. there are two schools of thought. one thing, we just need to get through the crisis and need to try to work together. and then those who say we need to hold our leaders accountable for what they have done because there's the change of course. yesterday we found out the critical number of personal protection equipment that was data for the nhs will not arrive

in time. this after the scathing article that is basically saying boris johnson was pretty much thinking of other things instead of dealing with the crisis in february and march. i don't know if you change the trajectory, but as a member of the press, i think it is right to give people into account whether they have been sick or not. tom: a little bit of light, folks. of look at the statistics these diseases and i guess there is improvement on this monday morning. we have an improvement and that is our news. from new york city. >> we begin with white house next atic leaders on the bill that includes more money for the small business loan program plus funding for hospitals and testing. the trump administration's trend of free up cash for businesses hit hard by the coronavirus. it will allow importers and manufacturers to delay tariff

payments for 90 days i many overseas products. but the move does not stop ongoing punitive tariffs. they are the centerpiece of current u.s. trade policy. the worst mass shooting in canada's history, authorities in nova scotia sing a man dressed as a police officer went on a shooting rampage and shy people in their homes. he also set fires. 16 people were killed. the gunman is dead. the price of oil fallen to its lowest in 21 years. tom and francine will have more on that. there is concern the world is running out of places to store oil. those output cuts have not been enough to cope with plunging demand. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. tom: thank you so much.

i went to get to the data pretty quick. futures deteriorate. the vix goes back to about a 41 level. a little bit of angst in the last 20 minutes. you see with the yields coming in. oil is nothing but spectacular. on the hour mark, west texas plunges another level, seller -- a solid 13 handle. francine? francine: as wti futures have tumbled, it is basically opened up almost nine dollars a barrel to the june contract which with most trading has now transferred. the features changing. fires in texas offering as little as two dollars a barrel for some of the oil. raising the possibility that american producers would soon have to pay customers to take root off their hands. that is the story of the day. oute trying to figure earnings. european stocks that were off but are pretty much flat slightly in the red, tom. enoughreally can't say about the bloomberg terminal on

the cell phone. i love, love, love this views. -- love the speed of use. the june futures coming in as well i believe with a 22 handle on it right now. with jim caron working in fixed income at morgan stanley, we would start with the bigger view but because of oil, i can do that today. i have to go right to the morgan stanley view linking debt into hydrocarbons as well. jim, you're just old enough to remember midland, texas, and the collapse of the 1980's. there up and other issues on oil over the years. this time seems to really be different. how difficult will it be for the debt of oil? be very it is going to difficult. that is what the high-yield records are effectively reflecting. .e are seeing that that justproblem

continues to get worse. we know the origin of a clearly, it is a global demand story. demand is falling. there was a spat between the saudis in the russians and that made things worse. but this also puts into context inflation. if you look at breakeven, tenure breakevens for example, those plummeted. last week they were up 130 basis points. about 102.are that means people's inflation expectations have fallen on average over the next 10 years by about 0.3% because of this. some is technical and some is fundamental. the other technical out there is they are running out of storage. you're running out of storage just or oil. you have what you need right now, might have missed -- have less demand and that drives prices down. but as you pointed out, tom, this has far-reaching applications to fixed income. high-yield is not going to do so

well with this today. investment-grade energy sectors are not going to do so well with this today. this has been a soft spot for the last year to 18 months. it will just make matters worse. tom: right. one of your great terms is not only do you look at the strategy of this and the management of portfolios, but you look at the supply coming on. very few do that. how will this of let -- affect the supply of fixed income? it really becomes very idiosyncratic. if you look at supply a fixed income -- if i just look at investment-grade supply it is running a very strong levels ahead of even 2000, 2000 19 levels. yields are low. there was an opportunity to issue in january and february but even more recently right now is the markets have started to heal themselves a little bit, there is been plenty of need to issue. so low interest rates helps

people issue. here's the problem. you're helping all the wrong people in the wrong places. the people that need the help our in the energy sectors, the more stressed sectors, not the structures that are healthy. sectors are getting the benefit of low interest rates. spreads are wide, but still. the money is not going where it needs to go to really support the more troubled sectors. is it right, jim, are we going to see bankruptcies because of this? andld we support companies sectors that were in trouble before coronavirus? are we going to end up with a bunch of zombie companies? >> this is a really good question. i want to discuss the difference between bankruptcies and insolvencies. will we have bankruptcies? are there some companies that just cannot stand this at this point and are just bad

operations that are just operating it way too high of a cost? yes. yes, there will be some failed companies along the lines. what is more important to think about our the insolvencies. these are still ongoing concerns that are going through a rough patch and really just need a line of credit to get through this period of time. sort of like having a credit line. this is where the fed could be helpful. this is where central-bank policies could be helpful. insolvency is your ability to not make good on your debt for the time being. the problem is a lot of these companies in the energy sector have already gone through their lines of credit. where you going to find a bank that is going to lend a lot of money? what we maybe need to start to think about are some of the better companies in the energy sector that the fed and central-bank policy might need to start to address to say, look, just like they are doing with the investment-grade market is to say, we will give you a bridge loan to the other side but only for the companies that

as of march 22, that is the line they draw in the sand, you know, better orng of x or whatever metric they want to use. but that is the kind of thing we need to start to think about. look, oil is in a freefall. these companies are not profitable at these prices of oil. the longer they stay here come the longer the pain will be. that could create other financial problems. francine: jim, is there worry that we are letting some of the weaker companies go, that leads to a spike of about 100 in four or five years? are we creating this crisis? boom-bustalways a business. the oil -- the whole problem with opec was to try to smooth that out. opec is not working very well anymore. i like where you're going with this in the sense that before opec, that is exactly what you

had come oil would run up to really high prices and a lot of people would come in and somebody -- the mask produce or the major producer of oil would produce a lot and they would drive prices really down and people would go bust. oil has always been a bit of a boom-bust type of a product when you did not have a governor effectively like open that was running efficiently. right now it does not seem like we have the school monitor on duty at this point. it is running amok. we have to get used to that. future,continues in the having oil go hundred $10 a barrel, to $50, $60, 70 -- then come back down. it is a boom-bus business. withine: we will be back jim caron of morgan stanley investment management. also coming up at 3:00 p.m., london time, conversation with larry kudlow on how to get americans back to work. he is national economic council

director. that is 10:00 a.m. new york, 3:00 p.m., london. this is "bloomberg." ♪

francine: this is "bloomberg surveillance." we were having a great conversation with jim caron about some of the oil companies, maybe some of the funding crunches that they will face, what this means for banks. and ask yougo wider in general, do we understand once the economy is open again, once we have a handle on this health crisis, with a lasting legacy of the 2020 recession will be? of the things that has become very clear and we are already seeing the wheels

in motion is the use of technology, working remotely. i think these are obvious. this is something we are all doing currently right now. as it turns out, people are pretty good at understanding their systems and getting things to work and i don't think a lot of productivity is being lost. but i also do think when we think from a macro perspective is it is going to be a pretty big change in terms of supply lines, in terms of where things are produced, and also wages and labor costs. there are two ways to go on this. one is to say the initial impact is at -- we're printing a lot of money, during all kinds of quantitative easing, neck rates a lot of money and might create a lot of inflation into the future. others might think, no, there's going to be a lot of demand disruption over a period of time where you're not really going to have inflation but disinflation or even a deflationary period before you resume. this is the battlefield. we don't know from a bond perspective in terms of where

should the long end of the yield curve go, how much inflation should we be discounting or not. that is the big question mark in the bond market. where i start to lean towards this is, as i look at not only the amount of physical deficit spending that is been going on not just in the u.s. but around the world, but if i take the u.s., for example, and see what we have been spending just for the virus, at that too -- don't forget, this deck it is the decade the baby boomers all become 100% eligible for social security. the deficit was going to rise anyway. not only do we have this big deficit spend which was very unexpected, but we have another one coming in the years 2024, 2026 that will add even more to the debt. the question then becomes, the dollar, which in bond yields that have been in the secular decline for 40 years, does the very high levels of deficit -- i'm talking eight percent, 9%, maybe higher -- does that start

to matter or do we start to think differently about deficit because other countries are going to be the same position as well? these are key questions that we need to wrestle with. them foreems like a 2020. we will do that withe him karen. thank you so much for joining us today, jim caron. for those working at home, particularly those with the terminal, i cannot say enough about tv . us.se stay with this is "bloomberg." ♪

tom: "bloomberg surveillance." let's get right to it. this is too important of a conversation. there is a lot of confusion, joining us now senior vice president hydrocarbon confusion from bloomberg, julian lee. we are thrilled he could join us. writing brilliantly on the dynamics of oil. physical you don't buy oil when you get those price quotes, particularly within etf's, you buy a may contract, which is rolling into june. thursday,ce of oil $13, $40 a barrel, or is the price of june contract $22 or

$23 a barrel? where will that be thursday or friday? >> i think thursday or friday we're going to see it somewhere probably between the two, but i think it will be closer to where the june contract is now. barrel is the $22, $23 a level. a lot of what we are saying in the headline price right now is because the may contract expires tomorrow. i think that is pushing the price down because if you're holding paper, either have to offload it or you take delivery of the crude and nobody wants the crude at the moment. tom: this is so important. we're talking about physical versus financial contracts and agreements. own an etf and i mortgage the house because oil 14 dollars, $15 a barrel, am i going or profit mightily from the future shift?

well if you've got a rollover on that contract ended june. this is part of the issue that we are seeing at the moment and some of the big-time spreads that we are saying. by -- who are buoyant theng oil now, selling crude forward on the futures market, locking in profit and that is allowing them to store the crude or to move the crude if you physical crude, to move that around the world, locking in a profit as you go. tom: one final question, julian. away from the dynamics of futures is just the bet on demand-supply demand of oil. how far out do you perceive this

demand crisis of oil? h, june-ish, or unimaginable? >> i think there's is a real fear that it is unimaginable. but that may be too strong. i think there's a real fear it is beyond june. i wrote a column over the weekend looking at traffic congestion. what we're saying even in china were some of the restrictions are being eased, we're seeing a pickup in traffic close daring peak weekday hours. people going to and from work. but what we are still seeing is that outside of those hours, at the weekend, during off-peak weekday times, traffic flows are really, really low. discretionary recreational going to the shops kind of driving is not coming back -- or at least, not yet.

flying may be the same. francine: thank you so much, julian lee. tom, as he was saying, it is very important to look at what is been going on with the futures contract and some of the conundrums as we try to understand the oil market and much more. this is what wti is doing now, i believe it is below $15 a barrel. a lot of volatility today. there may be volatility tomorrow because of the change of futures contracts will stop are also looking at earnings. this may give us that are idea of what we do next in terms of exit ease. european stocks were getting some 1% at the open. they are now down 0.4%, following asia lower and following futures in the u.s., tom. tom: very, very interesting. a lot of the earnings are industrial away from the bank earnings we saw yesterday in

that important interview with mr. gorman. right now we want to drive forward to what we're going to be doing for the rest of this hour. gideon rose, foreign affairs magazine. onir new issue is very much climate change, be pushed to the side but i'm sure gideon rose to the essays we have seen in foreign affairs have some terrific perspective on the international relations of this pandemic. please stay with us. historic day for oil. this is "bloomberg." ♪

viviana let's get your first word news. we begin with the deal that is close on the coronavirus.

president trump has joined democratic leaders and some members in his administration working on a new package that will provide up to $500 billion. more money would go to the loan program for small businesses plus hospitals and testing. now to china, the nation adding stimulus after the economy shrank for the first time in decades. thanks cutting borrowing costs. the government promising to sell another $141 billion in bonds for infrastructure spending. vice president mike pence will discuss today testing shortages with u.s. governors. president donald trump says some governors are relying strictly on state laboratories. he says they should also turn to large commercial and academic labs. governors above parties are calling for more widespread testing. they say without it, they cannot start to reopen the u.s. economy. in germany come the last 24 hours, the number of coronavirus cases rising this month by the least. since april, -- since april 1,

the number of for tallies is also the lowest. germany will begin allowing smaller shops to resume regular business and schools will gradually reopen. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you so much. greatly appreciate that. i should point out again oil is south come even further. contemplating a 12 handle on west texas intermediate, 13 and change right now with no sign of a bid. what you need to know stuck at home is you are bored, run out of things to read. this is what you need. i can't say enough the value of foreign affairs magazine. their new issue is on climate change, clearly done before the pandemic set in. i've already read the wonderful article by professor pei of claremont, his article on china.

all i can say is if you go to their website, you will get the new issue, which is an app endemic. leton rose, ambassador hoss off your many essays on the pandemic. what is the thrust you see from the council on foreign relations and from foreign affairs on this great pandemic? always, forom, as the kind words. the first thing the council does not take any particular positions or have an official view, just like most experts in general don't have a particular uniform view, they just approach your particular lens. right now the interesting thing, the debate going on is just how much the coronavirus is going to change things. how much the pandemic is going to alter stuff. obviously, things are going haywire right now but the question is, when things have calmed down, will they look like they were before or some dramatically new thing?

a lot of people are suggesting that everything is going to be different. i don't particularly by those suggestions. the article you mentioned argued what is likely to happen is the trends that were already going on in the economy and the global system are likely to be accelerated and hasten. i think the thinker who got this time correctly in retrospect was the one who talked about liberal democracy in post-american world. coming out of the pandemic, the world looks like that. it is basically a world that no global leadership, the u.s. now particularly in charge and everybody fighting with everybody else and nobody particularly being constructive or democratic. it is not a pleasant picture where we are coming out of this. instead of bringing people together, it seems to be dividing countries and people. tom: the essay on china in your new issue, gideon, is absolutely

stunning on the grimness of presidentxi and the control or lack of control he has over the future of china -- grimness of president xi on the control or lack of control he has over the future of china. >> the author is a wonderful china's greate of experts. he makes the case that china, looked at objectively right now, xi jinping is at the end of a long political success story and it will be very hard for them to keep going forward on the same kind of track economically over the next several years. and if the economy doesn't keep moving forward, then the regime might prove much more brittle than people think because a lot of it has been driven by performance legitimacy of the economic success of chinese economy. if the crisis turns out not to be a big boost for china but an

increasing stress and if the u.s. sanctions and decoupling restricts china's ability to goingnto the world, xi is to find himself in a world of trouble. the argument is excellent stuff it is clear and straightforward in a lot like the argument that say this fear rally is dramatically overbought in the market is going to take now because here are the reasons why it go down. i have been hearing these arguments about china being unable to survive in the system breaking down and falling into crisis when it can't the expectations of citizens for 20 or 30 years, just like the last month everybody in the market has been hearing, the market is going to drop again quickly but it hasn't. china has gone from success to success 2. going forward, are you bearish or bullish on china? they're are good reasons to think that china is actually going to face problems. on the other hand right now, the's response to the crisis has been so pathetic that china

looks good in comparison. the question will be when things settle down, after the dust is settled, who looks more competent at the end of the day. francine: at the same time, we hearing from president trump that china hasn't given us the full picture of debt or how they have been dealing with it. are we going to see a trade war like post-virus phase? and theation in china u.s., is it going to get worse because of the virus? >> great question. there is a functional logic to cooperation. obviously, everyone can see it. just like one state cannot go policy on the bars and have the next state screw it up by taking the opposite policy. that works for countries, too, especially when he of transnational or global systems like trade and other systems. you can't just opt out. china and the was are so bound together. the question is, -- china and

the u.s. are so bound together. the question is, given how much everybody wants to play a blame game and focus on exculpate in themselves from responsibility and blaming the next garb other than try to constructively solve the crisis, the question is, will the emotions driven by the pandemic make people get into a pissing were with their opponents rather than work constructively? organizationhealth during the middle of it -- defunding the world health organization during the middle of a pandemic is the opposite reaction. the question should be, how to recover from everybody's poor mistakes, cooperate better, and develop a functioning global mechanism to respond to these global crises. this demonstrates you can't have an america first for america only foreign policy because the

entire world is interconnected. our problems come from outside and need to be solved with the other people outside. gideon rose, thank you. coming up later today ed hammond, ever core come at 10:00 a.m. in new york. 3:00 p.m., london. this is "bloomberg." ♪

this is "bloomberg surveillance." we are working from home. i think we are in week four or five. i can't count the days or the weeks.

gideon rose with foreign affairs magazine. when you look at some of the focus that we have been talking about, how does this pandemic change the relationship between governments and the social contract, it is a change more in your or the u.s.? are we going to talk more about a safety net? are we going to see much more intervention of governments around the world? >> this is a great question. inward, blame somebody for the crisis, try to protect yourself by removing yourself and hunkering down. is toher possible trend recognize and interconnected world, we need more connection with others, with neighbors, with even opponents because what happens to the guy in the next house can affect up. you can imagine on the one hand, hunkering down an increase in

tensions, turn inward policy. but you can also see a functional logic in which all birxs of thed world are working together and a lot of ordinary citizens read people. you could see a kumbaya-ish surge of not just human feelings with the 7:00 shot out to the health workers in new york, recognition that we are all together and equal in situations like this and that we all deserve health care, we all deserve good treatment, and governments that respond effectively to the needs and security and interest to their citizens. this could produce ultimately a demand for better government when people see what actually happens. the real question is, when the public at large in its various capacities response to the obvious failures, domestically and internationally and the cost and problems this pandemic has revealed, will they respond by trying to make things better or just blaming somebody else and

trying to move on with her all lives? we just don't know yet. it will be interesting to see. i think the long-term results will be moving counterintuitively toward a more connected world because the real answer here is we should have stopped this earlier. china should not have lied. the u.s. should have responded quickly. we should've all gotten together early. that is not the message everyone wants to hear right now, but it is the way to prevent the next time. francine: what does that mean for brexit and the u.k.? first, there is a little bit of a shift. there was a pretty scathing article over the weekend but you also have an article in this edition called "britain adrift." >> yes, and another one on europe. the challenge here i think really -- european union has

proceeded over the decades through crises toward new evolution. ever hear for years, something bad happens. -- every few years, something bad happens. eventually, things got tighter and better. the question now is in the last several years, it hasn't been working. now it is undermining. basically, europe has not done well as an institution with the pandemic. it has broken down all sorts of things that have gone the wrong direction. results of that be, oh, yes, the project was a mistake? or does that mean, we have to be better at doing europe them we have been? we just don't know yet. it is anybody's guess, just like the market. everybody thinks they know what is going to happen in politics and everyone is much more humble about the markets. predict stop tom:

gideon rose, thank you so much. i cannot say enough. currently looking at the pandemic in their new issue on climate change, some important essays, particularly on china. secretary baker and secretary schulz with a timely essay as well. gideon rose. coming up an update on the virus. as francine mentioned, things looking a little bit better in the united kingdom and a little better in the united states. stay with us. this is "bloomberg." ♪

with returning his entire $10 million loan from the u.s. government. the loans are designed for small businesses heard by the coronavirus. plaster, shake shack had sales of $595 million. bloomberg has learned more than a dozen publicly traded

companies with revenue topping $100 million received these loans. not to speculation come the three biggest u.s. airlines make up more than 100,000 jobs under the terms of a government bailout, american, united, and delta cannot/jobs before september 30 but they have been warning employees cuts are almost inevitable. face2020 one, the airlines a bleak future of depressed traffic and volatile revenue. we end with casino operator wynn resorts calling for parts of the nevada economy to start reopening in may. the ceo saying the las vegas strip should be open in the middle or the end of the month. wynn has released a 23 page proposal on how it will keep its casinos, tell rooms, and guess say. guests safe.s, and tom: thank you. in a quieter time and place, professor shar stein of the

bloomberg school of public health at johns hopkins university would write essays like "influenza vaccination immigration at the u.s. southern border." right now he is focused on the pandemic in hospitals in baltimore. we are grateful for dr. sharfstein to join us this morning. joshua, wonderful to catch up with you again. the theme of the week that francine and i have seen is a really -- beginning to see some constructive news of getting over the hump. translate that into real-world medicine. are we anywhere near over the hump? are we anywhere near a glimmer of hope? seen recently in the united states is a plateau.

that is good news because we clearly were worried about having so many people with this disease from covid that it would overwhelm the health care system. there is no question that the health care system in several places such as new york city has been pushed to the brink but there has been an amazing medical response and extra beds and ventilators and staff coming in. it looks like the line is more or less holding in these hospitals are not getting overwhelmed. that is very good news. however, it does not mean that it is all over. it means that the long-term battle is beginning. it is very important that not only the current restrictions continue long enough for cases to really decline, but also that we have a strategy for slowly

reopening the economy. tom: i had a family member over the weekend, professor sharfstein, who took the information of a nurse of about age 40 dying. why are nurses dying? why are doctors dying? >> well, this has been seen all around the world, including in china and italy and spain. it may have to do with the fact that they were exposed to a very large amount of virus, perhaps before it was known that there was coronavirus in their area or when they were unable to get adequate protective equipment. our someone is exposed to generally can influence how will people can fight off the infection.

so that is one possible reason. the other reason is that there's a certain randomness to this virus. there are people in the community who seem completely at low risk based on what we know but nonetheless, they get seriously ill or even die. a guaranteed harmless infection for anyone. prancing coke could this be -- francine: could this be genetic? there have been studies that you could ever predisposition for the virus to get worse. where are we on this? >> it is possible. i've not seen any compelling data specifying which genes. sometimes there are variations in the immune system that can predict vulnerabilities to infection. i think that would be very interesting if it is uncovered. know you were saying

we need to be vigilant against a new surge of cases as we start to lift restrictions. what would be the right way to do this? you take a state and a state reopens any see what happens or do you look at another country or countries and states the lot that how has been in the number of deaths and infections? >> there are two things. there been a couple of very good reports that have been put out, .ncluding a johns hopkins the first thing is you have to think about what are the conditions for reopening? what do you want to have in place before reopening? the second thing is, how to go about it? in the first category, what you want to have in place, adequate testing -- which we don't really have to be able to test people who are sick, even mildly ill as well as enough testing for high-risk places like nursing homes. you certainly want to see cases of -- declining substantially

for 14 days. you need the public-health capacity to respond to cases. you need to make sure that health care system that has been pushed to the brink in some areas has bounced back so you're able if things get worse, to handle the challenge. then you have to think about how you're going to open up. it is not going to be flipping the switch back on. it will be slowly turning the dial. you need to really think through what comes first, what comes second, what comes third. in between these states, waiting to make sure you're not sparking a surge in cases. there are things that are going to come later like the big indoor concerts that come latest of all. you need to be thoughtful about that. i think we will start to see in the united states framework being discussed by governors and i think that will be the roadmap

that people follow. francine: thank you so much, josh sharfstein. oil plunging below. tom: west texas intermediate right now, 13.06. that is extraordinary. stay with us through the day. lawrence kudlow later this morning. this is "bloomberg." ♪

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cratering demand, storage increase put pressure on oil. the white house and democrats inched towards a deal expanding the payroll protection program is business. is claimer for more funding ecb program as-- businesses clamber for more funding. welcome to "bloomberg daybreak: americas." it is monday, april 20. i'm alix steel. in the markets, oil is at $13. in about an hour, it erased a dollar of its value. a lot of it is technical, but it will put stress on other markets. euro-dollar going pretty much nowhere. a lot of questions as to what eu leaders can do and. what they should be doing all of that putting pressure -- can do and what they should be doing.