the bank of england says it stands to do whatever is needed as it sees a slump in growth this year. trade negotiators will monitor progress as president trump threatens to terminate the deal. and blackrock's larry fink is the latest to predict higher taxes for companies to pay for the covid efforts. we will speak to the ceo of papa john's, rob lynch. we have a rally underway here. s&p futures catapulting higher, around the highs of the session. negative, now was trying to turn its way stronger. the norwegian currency is really outperforming as we had a surprise rate cut, but it is more of a one and done story. appetite.elping risk the big story of the morning is what happened with the doe,

signaling that it may need to do more to -- the boe, signaling that it may need to do more to combat lower growth. bloomberg's francine lacqua spoke to andrew bailey, the bank of england governor, following that policy decision. gov. bailey: we are keeping options open on that. i'm very clear on that. other members of the committee thought it was a sensible decision to take in our next meeting, when we may have more information. francine: are we any closer to negative rates, or is that not an option right now? gov. bailey: we are not ruling anything out because it would be unwise of us to rule anything out in terms of responses. i don't want to say we are nearer to negative rates, but we are not ruling anything out. . francine: under what circumstances will we get negative rates? gov. bailey: it's a complicated

question. you have to view it in the context of the times, also in the context of the financial structure we have, and what are the consequences of it. i just want to caution, we are nowhere near that. francine: you assume a recovery in 2021. why are you more optimistic than the ecb? gov. bailey: we are all using scenarios. i want to be quite clear that all of us are finding there's a much bigger gap between the judgments and decisions we are having to take and scenarios we is using, which is why it the first time in any inflation report we haven't published a forecast as such. these are very much scenarios to guide us. i was looking at the scenarios the ecb published earlier this our worldyou can cite economy scenario that underpins our forecast.

in theetty much sit middle ground of what the ecb published. francine: what does it do to your thinking if you have a slowdown that is not as severe this year, but then a much worse number in 2021? if there's a second lockdown, for example. gov. bailey: we obviously have to reevaluate. there's a new scenario we would use in that case. we have an assumption that will voluntarily be quite cautious about the way they reengage, so a degree of caution pushes the path of our recovery out into next year. obviously, if the whole disease he evolves in a different way, we will have to come back to that. francine: is there still a risk that this becomes a financial crisis? gov. bailey: if you go back into the middle and second half of march, we were looking at severely difficult conditions. very disorderly markets. we end the other central banks

had to step in. we all stepped in and very big ways. a lot of firepower has been brought to bear. and it has had an effect. but i would say this. we are still in very high alert because, i will give you the example of what happened in the oil price the other day, the west texas price. i got home to find the oil prices negative. you just think, how can this be? interestingly, of course, you have talked a lot about this, you can say all sorts of things about how this is idiosyncratic, but i would , we caution that history can always tell stories, but to dismiss this as just an aiosyncrasy, there is always canary in the coal mine that says actually, there are wider

fragility's here. that is certainly our view. it is not because we have a particularly different story about the oil story. it is because it points to the fact that we still got fragile markets. alix: that was bloomberg's francine lacqua speaking to bank of england governor andrew bailey. going me now from london is stephanie flanders, bloomberg senior executive editor for economics. what was your biggest take away from what the boe did today? stephanie: we weren't necessarily expecting policy to change, but there was recommendation from the bank of england that they may need to do more. that was one key message, quite a clear signal that if the economic data come in as we are expecting, that they could well announce more quantitative the meeting on june 18. i think the other one you have

to take away from it is that he that they-- is recognize monetary policy is not the biggest game in town right now. it is fiscal policy doing the heavy lifting right now, and they have to be thinking about the future trajectory for the economy. my question is, what is going to change between now and june that will allow them to expand their asset program -- their asset purchase way thatn a meaningful they didn't this time? stephanie: you can tell from the statement that there were more members who had perhaps been considering supporting more quantitative easing now. we asked the same question to the governor, and his argument was we already have quite a lot to do even just to emblem of the purchases we've announced -- to implement the purchases we've

announced. that would take them through to early july. they want to continue the same pace of purchases. but i think they also wanted to underscore that there is uncertainty, and they want to be able to have that kind of announcement power if it starts to look like the scenario is going to be worse than we currently expect. alix: and you saw what happened to gilts. part of the rhetoric is we have so much issuance coming down now in the u.k. that that is why you are getting that kind of pressure and the upward move on yields. can you talk me through the dynamic of issuance, and how much the boe is going to have to buy to absorb all of that? stephanie: i think every central bank is keen to avoid making the linkage you've just made. we have debt issuance pushing out more gilts than could

possibly imagine, and we had the governor saying that perhaps people could be doing that from home. that system has stood up pretty well, even with the enormous scale of purchases. back, wewhen we look can say a lot of those were paid for by the central banks in the short term. they don't want to be making that link explicit or talking about direct financing of those debts. so it is helpful for them to have these things talked about in a different way, and to be honest, they are supposed to be two different policies. debt is goingat into the market before. what is extreme areas we have ,een the demand by and large for gilts and government bonds,

generally has held up very justgly because it is not one country in this bind. it is everybody. so where are investors going to go? alix: totally fair point. looks like a duck, >> like a duck -- looks like a duck, quacks like a duck. stephanie flanders, thank you. earnings coming out this morning teva -- this morning. teva reaffirmed its outlook. via also topping estimates on the top and bottom line -- viacom also topping estimates on the top and bottom line. bristol-myers up about 3%. they reaffirmed their full-year earnings forecast. it does expect the peak impact of covid-19 to be in the second quarter. it is a continuing story of the health care sector and drugmakers holding up pretty well.

we will have an exclusive interview with rob lynch, papa john's ceo. for your market analysis in today's for stake -- today's first take. this is bloomberg. ♪

alix: time now for bloomberg first take. joining from our in-house team of altered veterans and insiders is michael mckee and damian sassower. mike, just want to start with you. we got a lot of central-bank action in the last 12 hours, with boe, the surprise cut in

norway, huge cut in brazil. what was your take away so far? michael: central banks are on the job, and they are reacting to numbers that are as bad or worse than the anticipated. norway certainly a surprise. they said they didn't think zero, and certainly negative rates, work. but the contraction in the norwegian economy is going to be so great, they have to do something. they are hit by the oil shock as well as the that was a surprise because they were leaning so strongly against it. brazil was kind of expected, except the government pushing back on the whole idea of the virus, so there's a little bit

of political tension going on there as well. alix: and you flagged this headline for us, the bbc saying that boris johnson going to announce a route out of lockdown at 7:00 p.m. sunday. i am really struck by the fact that we are rallying so much, and i can't quite tell why. do you have a better read on it than me? damian: rallying in what asset class? that is the real question. we had some fairly optimistic data out of china overnight with regards to the trade surplus and exports, but you can draw that down because it was really delayed shipments which boosted the shortfall. commodity prices obviously hit on imports, but beneath the surface, the real data point for me was reserves. reserves rose in china. they haven't been cutting as aggressively as some other central banks you are referring to, but rest assured, as china struggles to reopen its economy to levels we have seen previously, it may very well need to tap its reserves to defend its currency. alix: there's also some nuances in the export data as well. i feel like it was more about cleaning out old orders and getting new orders. it also sets us up for how we are going to look when we reopen. michael: a certain amount of the

export orders in china were ppe, ,he stuff we needed to buy manufacturing goods that are labor-intensive. that helps boost the manufacturing side of china. but the big collapse in import demand in china, now 14%, suggests there's no real domestic demand there yet. the reporting we have seen from wuhan is it is not really open. people can walk around, and they do, but nobody is really shopping and going to restaurants. that is going to be the real question everywhere. how quickly do people go back to what they were doing before, which is all about consumer confidence in the health system. that is all about testing and making sure we have some sort of at least treatment, if not a vaccine. it will be very hard for anybody to give you an accurate picture. all of these numbers we are getting from the central banks in terms of their forecast are a little better than guesses, but not a whole ledbetter. alix: which leads me -- not a

whole lot better. alix:alix: which leads me to the rally. what are we actually trading on right now, if we are not trading on the numbers or the data because we know it is going to be bad? damian. go ahead, [laughter] damian: it is really hard to say what has got equities' attention . i would say it is probably earnings. arend large, equity markets a beast unto themselves. if you look at options markets, particularly in rates and extend come, you've got option rates targeting -75 basis points. based in some of these poor numbers in germany overnight -- and in the u.s., you've got people calling for negative rates here. you've got euro-dollar options

trades that are basically targeting some of those levels that we never thought we would ever see before. the zero lower bound is still in place. the fed is going to do every thing it can to defend it. the markets have a tendency to pull on some of these threads until they snap. alix: mike, what were you going to say? michael: i was going to say it is a trade of hope over don't have an experience or accurate forecasts. but global wall street seems to be looking at what is going on in picking we are going to ca v and thinking we are going to see a v still, that we will get back to normal. but if we perhaps have a second round of this, we may realize we skis.t over our pe at this point, it is hard to say how much you are going to be able to make and how much profit there is going to be. there's a lot that goes into it.

we talked about this before. we don't know what energy prices are going to be, and that input into corporate expenses. we don't know what employee expenses are going to be because we don't know how any people are going to get hired back. we don't know what the cost of mitigating your office or factory is going to be. certainly when you get into the service sector, you're going to be able to serve a lot fewer customers at once, so can you make the kind of money that you need? owns arity chef who number of restaurants in new york says what is going to happen is when we reopen come all of the restaurants are going to reopen, and then find nobody comes, and then we have a second wave of businesses going out of business, declaring bankruptcy, and nobody's expecting that at this point. that is going to be a real shock to the system. alix: it is such a good point. the second round of layoffs. just because you furlough them now doesn't mean you will not fire them later.

our emerging markets taking a different kind of you than if you were developing in developed markets assets? damian: definitely. obviously we have seen some strength off of the back of some spread tightening in u.s. investment-grade and high-yield bonds, but the relentless march of foreign investors out of emerging markets on a local mean, record bond outflows in countries like indonesia, mexico, and south africa. many of these countries have never witnessed outflows of this magnitude before. i think its worst year was an inflow of $2.7 billion from four years -- from foreigners and its 10 year history. you can understand why a lot of these are resorting to unconventional measures such as quantitative easing in order to stimulate liquidity in their markets, but the rate cuts are coming. we saw brazil yesterday. we may even see peru tomorrow. at the end of the day, they all

fall back on what they know and what has worked in the past, and that is just straight rate cuts. yesterday,azil stimulus and rate cut at the same time. i don't want to let you go without asking about turkey. brazil has fx reserves. they have other options. turkey is literally running out. what do you do? damian: capital controls, come on. in turkey, what you're going to see is tighter capital controls. they are going to stop speculation on shorting the lira. they are going to just tighten the range as best they can, if they can. but you are absolutely right, the lira's plumbing to new lows. if you look at peers like brazil and mexico, mexico down 17% in march, it's worst single month on record since the 1994 peso crisis, so you can expect more weakness ahead for turkey for sure. alix:alix: mike, initial jobless

claims. how bad? michael: the forecast is for 3 million. it is hard to really, i don't want to say care, but to put it in perspective, we've gone over 30 million so far, and this is probably going to be a little catch-up for people who couldn't get through the system before. but expect a big number for may be another week or two, and then it sort of comes down. but we are so far above where we were, it is hard to even comprehend. folks are going to turn to the jobs numbers tomorrow, which are going to be insane. at this point, as of said before, may is all about finding out how bad april was. alix: it is going to be so brutal. guys, really appreciate it. mike's interview later today with mary daly, san francisco fed president, at 11 a clock a.m. here in new york. a reminder, any charts we use throughout the two hours, go to gtv on your terminal.

browse the features, check it out. gtv . this is bloomberg. ♪

viviana: --ritika: this is "bloomberg daybreak." the world's largest beer makers has the second quarter will be worse than the first. ab inbev says because of bars and restaurants closed due to the coronavirus outbreak, shipment's were down 9.3%. is cashing-- peloton in on the nationwide shutdown. quarterly revenue soared. peloton also raised its forecast. the coronavirus outbreak has led thousands to buy the company's stationary bike and work out at home. received $371 million, including money from spain.

iag has nearly 1.5 billion dollars in state-supported funding. first quarter revenue was down more than 14% from a year ago. that is your bloomberg business flash. alix: thanks so much. here's one other story we are watching today, and that is oil. oil is up because saudi arabia raised prices for refiners. brent crude went above $31 a barrel. it does signal potentially stronger demand. earlier this year, the saudis were dealing with a price war and offering big discounts. now they and opec-plus partners are promising a production cut to rebalance a glutted market. i don't know, i am still skeptical they are going to control the export market. we will see. coming up, the pound strengthening after the boe's unwavering pledge to support the economy. we will speak with jordan

rochester, nomura g10 fx strategist come on what it takes -- strategist, on what it takes. this is bloomberg. ♪

alix: welcome to "bloomberg daybreak." i'm alix steel. s&p futures continued to grind higher, right around the highs of the session.

similar story in europe as well. most equities up by 1%. in the bond market, the bear steepener was they were yesterday as we got a lot of issuance coming out from the treasury department, knowing they are going to push the tenor out along the back end of the curve. we will see how long that actually stays. you're seeing a little bit of selling in the gilt market as well, yields pushing higher. part of that story is issuance from the u.k. government. in the currency environment, the norwegian krone is most definitely the outperformer in the g10 space. they cut rates, but say they are not going below zero. let's stick with the bank of england and the policy moves today. we spoke to governor andrew the bank hasaid total and unwavering commitment to act. francine lacqua spoke to him

earlier today. gov. bailey: we've made a very strong commitment. two of my colleagues on the committee voted to do more qe now. other members thought it was an acceptable decision to take in our next meeting. we are not ruling anything out at the moment because it would be unwise of us to rule anything out, and terms of responses. so i don't want to say we are nearer to negative rates, but we are not ruling anything out. nomuraordan rochester, g10 fx strategist, joining me now. talk to me about the cable rate and what it means in light of the boe decision. jordan: when the decision came out to not expand the asset purchases at this meeting, you do see cable spike higher. 1.24.ke england -- we have to bear in mind, this is a new

format, 7:00 a.m. instead of a -- in there press conference, we thought we had ha bank of england not its t towards more information at the june meeting. so we expect it to be spend it upon -- to be expanded upon at the june meeting. it kind of runs out by july, and terms of what they've announced so far. so we will be looking for extension and expansion of qe by about 100 billion sterling in june, bearing in mind they have done 200 billion already. so you've got this big amount of central bank balance sheet expansion. i compare it to the fed and what is going on with the ecb. if you look at what they are doing, the fed really blew this out of the park if there expansion of the balance sheet, but they have slowed down the

rate of purchases. if you look at the weekly purchases, bank of england is actually doing a better job in terms of gdp. so, 1.2ing nearly 1% or percent per week of quantitative easing purchases in the gilt market. the fed at one point was doing nearly double that. it is now much bloomberg, around 40 basis points or so of gdp. so there's a big difference. the bank of england has really stepped up on qe. it didn't need to do much today, but overall, i expect a continued grind lower in the cable rate. alix: how does that translate if we look at rate differentials? yesterday we had the bear steepener. if we continue along that path and the boe is in the market every day, doing more than the fed, are we looking at a bear steepener in the u.s. and continued flattening in the u.k.? jordan: next week could be one of the first weeks where the

bank of england and the u.k. government have a slightly different dynamic. next week, we are going to also see issuance ramp up as well. there is the potential that, despite what the bank of england has been doing and how impressive it has been, it could see the curve start to move. you could see steepening. you could see yields go higher, and fact. is likethe u.s. story the u.k. story. you had increased issuance there as well, at the same time the fed is slowing down purchases. so yes, we could start to see steeper curves. the feedthrough to currency markets is a tricky one. for me, what happens with risk appetite in the market, i think overall, we had the peak response phase. we had the central banks step things up, we saw the s&p rally, and we looked pretty good. now we are going to see the economic rally continue to feed

into each data point, and meanwhile, central banks stepping up a little bit. overall, i think the dollar is still something to buy here. i think risk sentiment will be pretty shaky as well. i've just been talking about central banks and what is happening with china. t -- with china, too. alix: is the yen still a safe haven also? jordan: it has been trading a little bit more like it. if using about what happened with dollar-yen, we had the initial big risk off in march. dollar-yen was moving, but it didn't really follow the rest of the market. to correlation to equities, fixed income really broke down. it was doing its own thing. when that happens, it tends to be due to some type of structural flow taking place

consistently, sometimes for weeks, sometimes for months. i suspect it was something to do with what was happening with the government pension fund around the peak market crisis. we saw japan announce it was going to essentially buy more foreign equities and more fixed income products, and we are starting to see why now. it is not reached its target fully, but we had the flow feedthrough. dollar-yen is now trading more in line with what i will expect it to be. alix: just to wrap it all up, you clearly see the bias for the dollar to be higher on the safe haven bets, but how do you square that with the massive issuance we are going to see andy fed trying to pare -- to see and the fed trying to pare back purchases? jordan: that is essentially a

global phenomenon. it is really tricky for me to push the twin deficit view of trade inat a tradable the dollar right now because i can look at intercountry -- at any country and tell you how they are going to be starkly higher, too. everywhere is doing the same. for me, the driver of it is u.s. investment asset flows. so really watching the data for a very long time, as of february, it is a bit lagged. i am looking more towards the high frequency data such as the etf flows. what i have been seeing is u.s. investment repatriating in your area exposure during april, what repatriating in euro area isosure during april, which surprising. i think that repatriation could be a drive for the dollar as well. alix: interesting.

jordan rochester, always great to catch up with you, joining us from nomura. some breaking news here, hess coming out with earnings on an adjusted basis. they had lost per share of about $0.60, slightly better than estimated. of course, they are cutting their capital and exploratory spending to $1.9 billion. one interesting point they see about storage, they see commercial storage in the u.s. reaching capacity in the second quarter. the question becomes, can production cuts go faster than we reach storage capacity? that stock currently trading up about 1% in premarket. we want to give you an update now on what is making headlines outside the business world. ritika gupta is here with first word news. ritika: the world health organization considering a new mission to china, looking at what is called in connect trip to find the animal origins of n i coronavirus -- called a

could and mixed trip to find the animal origins of the coronavirus. the u.k. could start easing its lockdown on monday. prime minister boris johnson will unveil his plan the day before. johnson is under pressure to get the british economy moving again without another surge of deaths. more than 30,000 in the u.k. have died from the coronavirus, the highest number in europe. top u.s. and china trade negotiators will speak as soon as next week. they will try to make progress in implement in a phase i deal. president trump threatened to terminate the agreement if beijing wasn't sticking to the terms. the deal was signed in january, just before the coronavirus hampered the world's two biggest economies. 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 ritika gupta. this is bloomberg. alix: thanks so much. here's another story catching everyone's eye this morning.

it is a twitter battle featuring the lead singer of guns and roses and treasury secretary steven mnuchin, and it all began rose's tweets calling steven mnuchin a pretty nasty name. what he had doneed for the country. in the past, rose has expressed unhappiness with the playing of roses songs at president trump's events. isn't it a copyright thing related to that? john's biggest april ever. ceo rob lynch will join us next for an exclusive interview. if you have a terminal, go to tv . you can check out anything you missed. this is bloomberg. ♪

alix: papa john's says it saw ever asest april people ordered from home. joining me for an excuse of interview is rob lynch -- for an exclusive interview is rob lynch , papa john's ceo. thank you for joining us. can you sustain that kind of sales growth once people get back to work and start eating out? rob: we believe that we can. we have been working really hard over the last eight months to turn this company around, and we've built an infrastructure that we think is built to last,

and it is grounded in innovation. we've got a great pipeline of products that we are looking forward to ringing to the world over the next six to 12 months. our first launch of our innovation pipeline was in february, and we have seen amazing results that have exceeded our expectations. we believe that with those types of ideas, we will be able to thrive in this environment, where we are working really hard to take care of our communities and their time of need why they shelter-in-place, or when we get back to normal. alix: aside from menu innovation, what other steps can you take to help accelerate and capitalize on this sales trend? that there's a lot of consumer behavior being impacted right now. we believe that there's going to .e a tail on this

our business model is set up for that. we recently launched a new platform, which is a seamless execution of our delivery come all the way until the delivery driver shows up at our customers' homes. our customer service scores are up about 1000 basis points over the last six weeks, as we've implemented the no contact delivery platform. customers willg look for a long time. alix: how do you drive more margin expansion while you are also having to invest in contactless delivery? rob: we have a lot of productivity initiatives in place that we are still working before thee in place

pandemic hit. we just launched a new platform iscall papa call, which a customer service answering solution that allows people in our restaurants now to focus on making great pizza as opposed to answering the phones. that is obviously for labor efficiency, but also a big benefit to our customers and is improving our customer service. we've got a handful of initiatives like that at the restaurant level. we are also going to start working hard on our supply chain to start making sure we are as efficient and productive as we can be. we have been working with suppliers throughout the pen, to make sure our supply chain is set up for strong business continuity, regardless of how the situation changes. that is an outcome of a lot of the work we did before the pandemic to make sure we had redundancies in place and are

operating efficiently. alix:alix: can you give me some more insight into the supply chains and how you have shifted them, and what more you need to do to account for any changes or supply, assay, meat we are seeing in the headlines now? rob: sure. we are a vertically and a company. a lot of folks -- vertically integrated company. a lot of folks don't know we produce pretty much everything that goes into our restaurants. ingredients, but we make our dough fresh every day at facilities across the country. we have very close relationships with our suppliers. we saw the pandemic coming because we operate in the countries across the globe, and we saw it hit asia, and spread , so we took a lot of insight and learning from

those countries, and we got out in front of it and started working with our suppliers to procure inventories, excess inventories. we actually doubled the level of our core ingredients so we would be able to withstand and persevere through the challenging times if those ingredients became an invaluable. -- became unavailable. newlso worked to quantify suppliers in case some of our producers went down. a lot of work to make sure we have redundancies in the system and we have enough inventory to get through any of these unseen, unexpected challenges. alix: does all of that stay with you? are you going to have supply chain flex ability and built up inventory in the same way going forward? does it change the way you think about something like that? rob: i don't know that we will necessarily maintain the level

of inventory that we have on an ongoing basis. we want to be as productive as possible, but the relationships we have built through this situation with new suppliers, and our core suppliers that we've worked very closely with, i think are going to help us moving forward to a more flexible, more dependable supply chain. alix: yesterday, larry fink of blackrock saying he think we are going to see higher corporate taxes because we wind up paying for the rescue packages from covid. are you modeling in any way a higher corporate tax rate? you know, we are actually quite focused right now on making sure we are able to take care of the communities in need, focused on that. we have been a very fortunate brand. our business model is set up for this situation.

delivery, off premise delivery, is what we are built to do, so we've been allowed to operate as an essential business and performed a lot better than our restaurant peers. so there is -- so if there is recompense to make sure that we are repaying the programs that have gone in to help these communities in need, to help these entrepreneurs and small business owners that have really needed the government support, then we are willing to step up and help out. alix: fair enough. in terms of your own worker safety, do you have work from home staff at all? if so, when do you expect them to come back? how do you manage the liability questions that other companies are struggling with as they try to recall their workers? actually created a completely remote working

headquartersor our at office workers. i have to tell you, i am a little bit old-school when it comes to this, and would never have thought it could be this way, but we have been unbelievably productive working remotely. in fact, our field leadership and restaurant teams have been sending notes throughout the pandemic, just thanking the folks supporting them from headquarters, which is now a remote entity, if you will. productivity of has changed the way we are thinking about how we move forward and how we can operate as a company. that goes into some of our decision-making about when we are going to come back and what that is going to look like. so we are currently evaluating all of that. we have not brought anybody back. we don't have a plan to bring back people in the very near future.

the productivity we have seen allows us to bring people back when we feel comfortable having everybody back. and we may not bring everybody back. we are currently evaluating options on how we would create a more remote productive workforce. alix: really great insight. really appreciate your time today, rob lynch of papa john's. this is bloomberg. ♪

♪ alix: the top news of the morning with the bank of england leaving rates pat, but potentially signaling more stimulus down the road. francine lacqua of bloomberg interviewed andrew bailey, the bank of england governor. francine joins me now. it was a really interesting,

socially distant interview. what were some of your takeaways? francine: we tried to really understand from him whether anything changing with the lockdown of the u.k., it would completely change his forecast. went further than he did this morning, saying he is probably expecting more qe in june. i try to understand why juno not now. he said we have to wait for the lockdown and understand exactly when the end of the furloughs come, so it is all very critical, but what was also interesting is i asked why he was more optimistic, for example, compared to the ecb. the bank of england is in gdp this 4% drop year, but a quick recovery in 2021. we spent a bit of time trying to figure out exactly what would change his forecast and exactly his assumptions, given what he was saying. alix: any word on negative rates? francine: i tried to ask a

number of times whether negative rates were something he would rule out. he said we are not near negative rates, but said even the severity of the situation, he is not comfortable to rule anything out. his predecessor mark carney definitely ruled them out in the past, but again, with covid-19, we don't really know what kind of recession we will get and what patchy recovery, if there is a recovery at the end of this year. alix: francine lacqua, really appreciate that. fran will speak with ecb president christine lagarde, all coming up at 10:00 a.m. here in new york. this is bloomberg. ♪

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and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us. ♪ alix: welcome to "bloomberg thiseak: americas" on

thursday, may 7. i'm alix steel. let's take it right from the top. >> we are not ruling anything out because it would be unwise for us to rule anything out in terms of responses. alix: bank of england keeps without ruling out negative rates. we recognize that the monetary policy is not the big game in town right now. it is really the fiscal support for the economy that is doing the heavy lifting right now. alix: the promise comes as other central banks around the world slash rates. norway cuts rates to zero in a surprise move. german industrial production -- production declined 9.3%. >> should we see that the scale

of the stimulus is coming short of what is needed. >> i think the ecb will have to do more, if you compare their purchase program to that that we have seen from the fed or the bank of england. they look significantly smaller. alix: global data continues to redefine the word unprecedented. >> they have to buy, and if they don't, we will her make the deal. alix: president trump -- we will terminate the deal. alix: president trump threatens to end the deal with china as they continue to place the blame on coronavirus. >> it is clear that at the front end of this, the chinese coming this misled the world. >> sources tell us it will be the first time the chinese vice premier liu he and u.s. trade representative robert lighthizer have spoken since january. alix: president trump threatens

more tariffs as punishment. despite all of that, we are seeing a rally building here within the equity market. if you take a look at european equities, they are on the has of the session. s&p futures around the highs of the session. seriously a straight arrow up. some buying in the bond markets, but nothing to write home about. it was all about a bear steepener yesterday after the and essman from the treasury department, but kind of coming down from there. saudi arabia setting their oil price higher. that could signal more demand. it plays into the recovery story. when we open up, will things actually get better? joining me now is chris watling, longview economics ceo and chief market strategist. i have more nuanced questions for you, but the first one truly is why are we rallying? question.t a great i think we are still on the sugar high and the good news

feeding into the market, the idea of opening up economies, the infection rates peaking, and so on. the reality is the s&p has actually been in a range the last two weeks. we've been kind of flat as the market has been positing what next. i think the rally from the lows on march 23 through mid april are now pricing in the good news we are seeing in terms of infection rates and so on. but the real question is what happens beyond q3. once we open up the global economy, we are clearly going to get economic bounce, but q4 is what we are interested in, and 2021, what we call the reckoning, and how that plays out. alix: so let's get to it. there are. . multiple narratives about what happens what is your basic -- there are multiple narratives about what happens. what is your base case? chris: i think it is very troubling. what we have in q2 is an unprecedented stock.

it is pandemic induced, self-inflicted, if you like. what is interesting is how that then feeds into the global economy and how companies react. i thought it was fascinating what the fed put out over the last couple of days, looking at the conference calls in q1 earnings from the s&p 500. measuring how much they are cutting investment, cutting buybacks and dividends and so on. all of those numbers were considerably above the worst numbers in 2008. it creates feedback into the global economy, this sort of negative feedback loop. i think that negative feedback loop we will start seeing the on that sugar rush in q3. i am pretty nervous about the medium-term outlook. i think there's an awful lot of challenges out there, and the consensus is far too optimistic in my opinion. alix: on the one hand, predicting things like inflation, higher yield, etc., that was all supposed to happen

after 2008, 2009. here we are again with the words unprecedented stimulus and unprecedented prices. why is this different than 2008? chris: this is different for a couple of reasons. first of all, we've got inflation, bankruptcies over the next six to nine months, but beyond that, isaac we do have inflation because this is different than 2008. it was about austerity and printing money to shore up bank balance sheets and to ensure the sinking of banks we saw in 2009, 2010, 2011 didn't turn into deflation. this is more about printing money to fund government deficits. i think the consensus in markets is very much right in this respect, that governments are not going to go for austerity. there's too many populist politicians. there's too much desire to keep

spending on the government side. so i think it is going to continue. i think central-bank money creation is going to be funding fiscal deficits. added to that is the monetary side of things. you've also got this idea that really, there's going to be very significant damage to the supply side of the global economy. i think the supply-side support is not nearly as good as it seems. it sounds good in practice, but actually it is not getting through to all the places it is supposed to. there's going to be a lot of bankruptcies, a lot of damage to the supply side, and therefore withoutnd coming out supply to deliver it, and that is tied to inflation as well. there's a lot of inflation risk once you get beyond the deflation, but i think first of all, you've got bankruptcies and deflation to come. , how if that is the view do you structure a portfolio for that view and not miss out on

any sort of short-term returns in the meantime? chris: you've got to be nimble. you certainly got to trade the bear market rallies, which is what i think we are in. primarily, you've got to be underweight risk assets and underweight equities and equivalents, high-yield debt and so on, and defensive. i thick we are in a sustained bear market. it is easy to be buoyed by the bear markets and the price is a believer in the bear market. but if you think back to the last two big bear markets, after the initial high from the end of the bull market, both times we retested we were looking at july 2007 and october, when we retested that high again, or even in march 2011. normal, evolving into a bear market type behavior. we will see how it plays out from here. but i think you've got to be

underweight. you've got to be cautious and defensive, and my opinion. alix: on the flipside, the rhetoric, at least for the narrative for the fed, is central banks know how to deal with inflation. so let's just throw all the money you cannot this crisis. if inflation hits, they know what to do to be able to dial it back. why do you see that narrative not playing out? chris: because i think once you get beyond this recession and bear market, central banks have got to continue to finance the government deficits. going to havere government funding crises. if you look at the u.s. profile for government spending, it picks up quite sharply on the cbo forecast from january pre-pandemic, but if you get inflation in the system and the bond yield backs up, interest spending really starts to bite into government spending. so they need to cap it. you need yield curve control.

that is why i think you're going to get that situation playing out and continued money creation on the other side of it. so it becomes a different ballgame. alix: we take a look on the corporate level, what do corporations look like? what are some of the bigger changes we are going to see in certain sectors that disrupt your traditional thesis? if we get a recovery, go buy cyclicals. how is this going to look differently on a sector basis? chris: in the near term, people are way too optimistic on technology. it's become this narrative that tech is the great savior at time like this. we are all working from home, doing zoom calls and so on, and the tech companies are more resilient. but i think once we get into a more traditional bear market and recession, that will be exposed for what it is, and i think tech will struggle as well. i think the next leg down in

this market will be led by tech. these are theing, fifty-year views. if you take the really long view and look at value versus growth, on a relative price performance, we are at an extreme of growth relative to value. that has been accentuated by the last few months in the selloff we saw into march and the way the markets rallied as well. growth has had an extreme relative to value equivalent to tnt peak andn the the nifty 50 peak. i think that favors value. once we get beyond this deflationary bear market, i think that is an interesting 5, 10, 15 your trade, secular trade. and certainly completely contrary to healthy market is thinking at the moment. alix: 100%. chris, i super appreciate it.

chris watling of longview economics. coming up, what comes next as economies start opening up? we will speak to the ceo of blue apron on just how consumer behavior and preferences are evolving to the pandemic, and if they stay that way or change. this is bloomberg. ♪

♪ alix: lockdowns and restaurant closures boosted shares of the

milk at service blue apron. -- of the meal kit service blue apron. joining me now is the lou apron ceo linda kozlowski. good to chat with you. the rhetoric in the beginning of the crisis is it was going to be great for you guys. then it feels like investors were disappointed results, and said you didn't have good enough sales. what do you want to say to that? linda: we were actually happy that in q1, we did what we said we were going to do, which is we grew sequential quarter over coder -- quarter over quarter customers, as well as revenue, to boost sustainable growth in 2020. obviously the demand came very sharply at the end of q1 and moved into q2. what we are seeing in q2 is a significant increase in demand, but we were also focused on how we build and serve that demand as safely as possible, and scale into something that makes sense for the long-term of the company as well. alix: i guess the question is

when is the pivot. when you wind up investing enough that you can pivot and sales can accelerate? linda: we are in a unique position in that we have the physical capacity in order to it significantly higher over time. it is really about the labor force. .e started hiring in mid-march in the meantime, made a few modifications to try to streamline and deliver on that 27% month on month spike we saw from the first three weeks of march 2 the first wee weeks of april -- the first three weeks of april. we saw about a 27% spike in demand, and we needed to ramp up into that pretty quickly. we will see year-over-year growth in q2 rather than the later half of the year, and we

will go cash and even data -- and ebita positive. we know that we can manage all of the ebbs and flows and demand that we will see for the rest of this year. alix: what kind of people are you hiring? can you give me some numbers behind that. how hard or easy is it to higher now than it might've been six months ago? linda: we started hiring about free hundred people across our filaments until's -- our fulfillment centers in california and new jersey. we also have a third center in arlington, texas. those have been working together to continue to meet this demand. we started with 300, but then built in the flux ability to be able to hire more -- the flexibility to be able to hire see more demand. meantime, we are looking

at how we actually develop the timect and scale that over into getting back to healthier options and variety so we can retain those customers long-term. alix: what happens when people go back to work, when the economy reopens? what do you have to do to woo them to keep them? linda: we are already seeing our customers who are coming in have very similar characteristics to a lot of the existing loyal customers in the base. so we are attracting customers that might not have tried a meal kit before, and this will be their first experience with it, or maybe customers who have always been interested. they just didn't quite understand what to think about it. so we are seeing behaviors and reactions from those customers that are very encouraging when it comes to how they engage and understand that this is something that is less about am i going to the grocery store or not. it is more about how do i actually take the stress out of

meal planning. i think there's a myth that people are less busy at home know that they are working from home. i think most people juggling kids in every thing else, they are just as busy as they were when they were going into the office, and they still need solutions that remove a lot of that mental load. that all being said, what we are seeing from the data is that the expectation across a bunch of different third-party research has told us what we are seeing from our own customers is they continue to cook from home in larger numbers than they were before this started, even after things start to open up again. it is going to take a while for people to get comfortable with going to restaurants and going out again. alix: i can definitely say i am more exhausted working from home with a five-year-old then i am working 14 hour days, for sure. what we are seeing in the job market is potential concern for a second round of layoffs. first will be retail, restaurants, bars, etc.

then we see more white-collar job step assumedly -- white-collar jobs that are presumably more of your customers. how do you manage that? linda: we are seeing a very ourresting dynamic in customer base. we offered a premium offering with more complicated techniques and more interesting protein combinations. we were interested on how that would actually work in this process. one of the things we have seen is that people are looking and meal kits in some ways not just as a how do i provide meals at home, but also i can't go out or it is less expensive than necessarily going out to dinner, so they are appreciating having a variety of price points that they can approach and say this might be a night out versus this is a normal meal that i would have on a night in with any meal

kit. so i think you're going to see some of that behavior continue. we are already seeing transfers to people staying at home for coronavirus started and wanting to spend more time with their family, entertain at home. so we see some of that continuing as people will go out, but as i can i get -- as economic impacts continued to roll forward, we continue to provide value in a variety of situations where your behavior will have changed in a new economy. alix: to pivot off of something you said earlier about when you're going to be profitable, etc., can you give me a sense of your current cash burn, if you are going to need more funding? what are some of the plans were focused on if this doesn't happen, that kind of thing? linda: we announced earlier this year we were looking at strategic alternatives that could bolster the strength of the business for a long-term

growth strategy, including deeper investment in marketing through some of these strategic alternatives going forward, and we are still on that path and still focused as we were before on the strategies we laid out last year and the beginning of this year. none of that really actually changes for us, except for the fact that we are now in a different position as far as having a lot more flexibility as we go to adjusted ebita positive and cash positive in q2. alix: linda, thank you so much. it was really good to catch up with you. we really appreciate you coming on, linda kozlowski, blue apron ceo. for more on how executives are never getting this business environment, tune in later for david rubenstein speaking with the ceo of qualcomm. that is at 4:30 p.m. in new york. this is bloomberg. ♪

ritika: this is "bloomberg

daybreak." globalica and liberty will create the uk's largest phone and internet operator. and liberty's2 virgin mobile will unite. agriculture secretary sonny perdue expects u.s. meatpacking plants to fully resume operation within 10 days. more than half of workers at some american plants tested positive for coronavirus. that has slowed production, even as some plants reopen, and shortages have forced some grocery chains to limit meet purchases. the world's largest beer maker warns the second quarter will be much worse than the first. ab inbev says april shipment's fell 32% because of bars and restaurants being closed due to the coronavirus outbreak. first quarter shipments were down 9.3%. that is your bloomberg business flash.

alix: thanks so much. i want to stay on earnings for a second. here's how worried corporate executive's actually are, if you listen to their earnings calls. as the s&p 500 fell, executives talked more about payout cuts, investment cuts, and credit line drawdowns. the fed researchers found that about 42% of nonfinancial public companies are talking about cutting investments. at the peak of last recession, that was only 25%. is inchers say that trend line with 2008, and that won't normalize within a year. coming up, talking about some long-term effects. another estimated 3 million americans could file for unemployment claims last week. we will break down those initial jobless claims numbers with tiffany wilding, pimco economist. this is bloomberg. ♪

alix: welcome to "bloomberg daybreak: americas." i am alix steel. initial jobless claims just a few seconds. s&p futures around the highs of

the sessions. up 42 point. a straight arrow higher. a relative similar space in other areas. the cable rate trying to outperform as well. here you are seeing a little bit of a flatten or, you saw a bear steepener after the issuance. the numbers are out. initial jobless claims for last week 3.1 million. that is worse than estimated, but the numbers still coming down on a sequential basis. muchlabor cost coming in higher for the first quarter on asolumnar basis, 4.8%, productivity is down 2.5%. that is better than estimated but nonetheless an insight into what we will see tomorrow in terms of wages and hours worked. the productivity number down 2.5%. jobless claims 3.1 million. joining me is michael mckee,

bloomberg international economic and policy correspondent and also tiffany wilding, pimco u.s. economist. sees a hard date when you 3.1 million people having to file for initial jobless claims last week and it rolls off your back because it is less than before, but that is where we are. getting pretty gross to the forecast each week. -- getting pretty close to the forecast each week. there are a lot of people still stuck in the system because they cannot get processed quickly enough, and that is part of the reason we are still seeing the backlog. many people were laid off immediately when the various states closed down. one interesting aspect of this is if you take a look at the number of nonseasonally adjusted claims, that is 2.8 million, and they have been steadily lower. the new york fed is out with a note that says if you are trying to compute what claims mean for the payroll report tomorrow, you

should be using the unadjusted numbers, because the seasonal adjustment is based on normal patterns and this is not a normal pattern it would not ofount for an accurate count the number of people who are actually jobless. they are suggesting the number of people who are unemployed tomorrow could be 2 million lower than the figure that comes in if you use the unadjusted figures. maybe that is just nerd top for economist. it is something to keep in mind when we start forecasting 21 million jobs lost tomorrow. is a a fair -- alix: it fair point. let's ask tiffany. , or arejust nerd talk we in a situation where the underlying numbers may not be as bad as we would expect. tiffany: i do not know about the nerd talk. you live and breathe this stuff. the new york fed is right in terms of the seasonal adjustment .

it is probably not doing a great job because we are not in normal times. seasonal adjustments are more helpful when you have normal times. in terms of the new york fed conclusion that things might not be as bad, there is evidence on the others have that. that is what michael mckee suggested. you have an increase in backlog. the volume of claims of any of the states have been getting have made it more difficult for them to process all of them. the numbers we could be seeing an initial jobless claims could understate the amount of people who lost their jobs during the survey period. i thought there was an interesting bit of research from academic researchers from the virginia commonwealth as well as arizona state university. they basically estimate through an interim labor market survey, they are trying to replicate the household and the establishment surveys. they found that 34 million people, which is much higher than the 24 million people in the unadjusted claims, could

actually have lost their jobs in april. there is a broad range of outcomes. i think the consensus right now on bloomberg, which is 21 million, may be a little bit lower than what we are likely to get, but of course we will see with the data tomorrow. interested ino second and third round of facts. inknow the initial furlough the initial people that were laid off. as we restart the economy, you expect those workers to then be officially laid off for longer-term? how do you see the second round playing out? tiffany: i think that is what is key for markets these days. it is not necessarily the depth of the recession we are getting, but about the recovery once you start to have some of these mandated business closures removed, and we are starting to see some states do that.

to me, the extent to which people get rehired is a question about the extent to which you have bankruptcies or companies that are going out of business because of this kind of extended period of no revenue, but also there is another question. left thewhen we business closure mandates, how quickly will consumers actually start to rebound and go back to their "normal activities." one of the things where you worry about, because we are -- one of the things we worry about, because we are reopening the economy without many of the testing programs in place and without the surge capacity at hospitals any experts recommend, you will not actually have as weers rebounding a lot officially reopen. that matters for small and midsized companies, in

particular because they tend to be more fragile. they have revenue disruption long after that reopening, you could start to see bankruptcies which will impact the labor market on a longer-term basis. that is the scenario we worry about. michael: let me throw another thought about the numbers tomorrow. that will lead me to a question for tiffany. the unemployment rate may be somewhat misleading because the labor department said what should have been done last time was anybody who was out of work and not being paid because of the coronavirus should have been classified as not working, unemployed but on temporary layoff. there is a question about whether those people would be considered not in the labor force because they were not looking for jobs. the labor department says they should be considered in the labor force. there were mistakes made in the last issue, the last report because of this. we consider is, can

any of these numbers particularly accurate with all of the statistical problems with them? this leads me to the question with tiffany. they may be off. what is it you would look for in tomorrow's report that would tell you anything of use, particularly about the labor market going forward? tiffany: that is a great question and a great point. down towhat this boils is the unemployment rate rise we see tomorrow might be less, just because people are leaving the labor market, or at least they are reported on the survey is leaving the labor market. the participation rate falls. when you have the combination of those things, the metric you want to look at is the employment to population ratio. that will give you a better sense of how many people have moved from employment to something else. ratio is, we think

that could rise 10%. regardless of the unemployment rate, that is the thing we will be looking at. if the consensus is right for how many jobs are lost and you not have any rise in the participation rate, the on employment rate could be over 20% tomorrow. alix: that would be staggering. in which case, i would like to dig deeper into what you are expecting from wages and hours worked. the productivity number was pretty dismal for the first quarter. labor cost as well. where are we in productivity and how do we get out of all of this? tiffany: the productivity numbers were negative today, and it is interesting to contrast that with the speed and scope of the labor market disruption we have seen. as everybody knows, productivity numbers are calculated by looking at the output in the

first quarter, and then looking at how many hours it took people to create that output. what the negative productivity numbers suggest is that although companies were raising to fire workers even if it was temporary , they cannot do it fast enough given the massive decline in revenue and output they were seeing. those productivity numbers are pretty bad, they are not as bad as they could have been. tomorrow you will see hours worked decline within the labor market survey. on the average hourly earnings, i think you have to be careful. it is an average across all industries. what we are seeing is a change in the composition of the underlying employment base. that is because many of the people that are now unemployed are lower wage jobs. you actually could see a better

average hourly earnings number tomorrow because of that composition shift towards the people still working, are those people that are the higher end of the wage spectrum. i think you're seeing some of that today in the unit labor costs, which were higher. alix: interesting dynamic. tiffany wilding of pimco, thank you so much. pleasure chat with you. michael mckee, thank you so much. tune into my interview later on with mary daly, san francisco fed president coming up at 11:00. still on jobs, the pandemic appears to be hurting some groups of employees more heavily than others. check this out. the unemployment rates for black americans and hispanics felt to historic lows during a record long economic expansion and has changed. minority workers have been penalized by a last hired, first fire dynamic. the question is whether that will hold true when the jobs come back. a staggering chart as we delve into this complicated jobs picture.

filinglion unemployed for initial jobless claims last week. now let's give an update on what is making headlines outside the business world. here is ritika gupta with first word news. ika: china and u.s. negotiations will resume next week. president trump threatened to terminate the agreement if beijing was not sticking to the terms. agreement went into effect in january. the world health organization is considering a new trip to china to find the animal origins of the coronavirus. the trump administration has said it likely escape from aleppo oratory -- from aleppo work -- from a in wuhan. china has denied the claim. boris johnson is on predator to get the brick -- is under

pressure to get the british economy moving again. more than 30 that -- more than 30,000 people in the u.k. have died from the coronavirus, that is the highest number in europe. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. alix: thanks so much. crude is biking this morning. saudi arabia raised prices for refiners. we will break it down with janine way, barclays senior u.s. integrated oil analyst. that is next on today's bottom line. if you want to check out any charts we used throughout the show, go to gtv on your terminal. you can save them and check them out. this is bloomberg. ♪

ritika gupta this -- ritika: this is bloomberg daybreak. peloton is cashing in on the nationwide shutdown. the maker of the online exercise says -- balaton also raised its forecast. the coronavirus output -- outbreak has let thousand americans by the stationary bike to work out at home. the price of oil rose after saudi arabia raised prices. brent crude went above $31 a barrel earlier this year. the saudi's stopped the price war by offering massive discounts. now they and their opec partners are promising massive cuts. i am ritika gupta and that is your bloomberg business flash. alix: time for bottom line. we take a look at companies and sectors worth watching. we will stay on oil and look at the e&p industry. joining me is jeanine wai,

barclays u.s. senior integrated oil analyst. always great to have you on the program. when you see a rally underway, brent over 30, wti 25, winter producers say forget this production cut thing, i will produce oil? what is magic number we have been hearing on these earnings calls? jeanine: thanks for having me on. this is a question, and oil prices is a number people keep watching as a trigger. it was not too long ago we were at -$38. in terms of the price for getting back to work, it is tricky, it is not about the absolute price signal, it is about stability. we still have continued concerns on storage. we do not know the duration of demand destruction for covid-19. we think there could be more volatility on oil prices and not last. it is not efficient for emp activity up and down. we have heard high 20's and low

30's, but we think it is about stability and to get back to actual growth versus the anemic activity levels we are at now will take something closer to a sustained 40 or 45. alix: wow. that is a far cry from where we are. based on that, we are in the midst of e&p earnings season in the u.s.. who will make it? who are the good ones? jeanine: this earnings season has been exciting. we had a few good earnings prints where we see some winners. execution still matters in this space. the companies need to hit their numbers in order to instill confidence from investors, so in that case we highlight devon, who reported very strong numbers . they beat on cash flow, capex, oil production, and they continued us show a track record of execution. also oil prices are still low and cash is king.

free cash flow is king. and nowight this week another capex reduction, now the company expected to generate over $300 billion of free cash flow for the rest of the year, which is pretty impressive. we think there should be follow-through on that. alix: who doesn't make it? not making terms of it and bankruptcies and all of that, after selling a bunch of assets and repositioning portfolios on our large-cap emp side, we have decent balance sheets, so we do not see a lot of near-term risk for bankruptcies. what we are seeing is some companies are able to tap the debt market. with that said, the more higher liver names with debt majorities , we are watching those names because they could be more exposed, depending on of oil prices remain challenged and the markets are close to them.

occi has above average leverage and $64 billion of debt due next year and 12 billion over the next three years. that is a name we will watch on how oil prices do. that company still has options. they continue to work asset sales, they are lowering costs, they are lowering costs, they're trying to preserve the cash. really they need higher oil prices. alix: let's make that distinction. who can restructure their debt? who will be able to declare chapter 11 and who is doing chapter seven, fewer the keys, i am walking away? jeanine: we did not see much of that on the large-cap side. in terms of the companies able to restructure debt, we thought you g come to the market successfully, we saw exxon come to the market successfully. we think the debt markets will be open for the high quality companies. equity is another story. there are still options. alix: fairpoint. are there any other levers

companies can pull in terms of cost cutting, bringing out services costs, is there anything else they can do to help them survive? jeanine: yes. we are seeing tremendous savings that getsn to the more depressed. the companies are squeezing every efficiency they can because prices are so much more low. onhad surprises the upside companies being able to reduce operating expenses going forward. that is one thing they can do that we are seeing a lot of. alix: as we go forward, a lot of companies are drilling but not completing, they are drilling uncompleted wells. when oil prices go high enough they complete it and oil prices leave the market. what are we seeing in terms of that? that was an overhang in the last downturn of 2015. jeanine: true. it is funny how things change.

this idea about building the duct you are talking about is a huge theme we have seen out of earnings. ducts layer the building will be a big tailwind of capital efficiency for 2021. that will be a direct benefit to cash flow for the producers. we can argue from a balance sheet perspective whether it is a good idea or not to drill the well and spend the capex and not bring them online. either way it will be a positive for 2021 and so we are calling 2021 the year of the duct and saying thank you. alix: i love it. jeanine wai of barclays. love chatting with you. for more, tune into my oil crisis"called "crude in tomorrow night at 9:00 in new york. coming up on this program, the trend is your friend when it comes to gold and bitcoin. that is coming up on today's technically speaking.

this is bloomberg. ♪

alix: time for technically speaking. joining me is mike mcglone, bloomberg intelligence commodity strategist. you're looking at the trend in gold. mike: yes, looking at the trend in gold and a market that is more likely to continue appreciating on the back of significant federal reserve easing. what you see in the first chart is the fed balance sheet as a percentage of gdp jumped to an all-time high, above 30%, overlaid with gold. this is a monthly chart of gold. the big difference from the last time we started to eat, gold had made it -- we started

quantitative easing, bold had just made it all-time high, now it is well below the all-time high. i think is a matter of time before takes out the all-time high of 1900. alix: walk me through what that means for the s&p as well as bitcoin. mike: let's focus on a simple technical trend. 50 week average for the year higher for bitcoin and goal. look pretty strong. they have turned down the s&p 500 but note the levels. s&p 500 around 3000. we are still below that level yet bitcoin at gold trending higher and markets are above those levels. that is what you're supposed to do. by dips around the 50 year average -- around the 50 week average. as they grind higher today. great stuff. thanks very much. that doesn't for me "bloomberg daybreak: americas." coming up with jonathan ferro,

julian emanuel. in the market, you still have the rally underway within s&p future. theuch of buying and treasury market, even though you had jobless claims 3.2 million for last week as productivity tank and labor costs surge. this is bloomberg. ♪

jonathan: from new york city for

our audience worldwide, good morning, good morning. the countdown to the open starts right now. here is your thursday morning price action after yesterday's mild losses on the s&p 500, s&p -- equity futures are positive into the cash open, up 1.52% on the s&p 500, positive 43 points. that is your price action. likeprice action looks nothing has happened but something has. that is our top issue. 33.5 million jobless claims in seven weeks. perhaps you've become desensitized to some of the numbers. markets may have become comfortable with them. i can tell you for the people behind the statistic, there's nothing comfortable about this moment. as we reopen the economy, we need to focus on many things. one of the most important things is this question -- how long will it take for this labor market to heal? >> the bulk of the layouts are behind us. some sectors, technology being