tom: this morning it was a beautiful weekend in new york city. it is a beautiful monday as there are clear scott -- clear signs of escape from this great pandemic. market.beautiful futures higher. faang stocks forever. road to recovery and stay on that road. the powell sheet recovery stretches to the end of 2021 -- recoveryl shaped stretches to the end of 2021 and beyond. overlooking central park and francine, it was without question a more bustling new york city this weekend. the weather was beautiful and if central park was not packed, it was quite crowded.

that was a sea change over what we have seen the last eight weeks. francine: hyde park was definitely packed as well and on saturday. it kind of goes to the challenges the authorities have as you look at the infections in real time to see whether you can go back to full lockdown. this is what markets are trying to figure out as businesses are reopening but you don't exactly know for how long. tom: it is true, nation to nation as well. brazil having a particularly tough go of it. statistically there is much more we can talk about about the economics and financing and also how it all folds into this pandemic. german powell front and center on that -- chairman powell front and center on that. right now with our "first word news." >> the federal reserve chair

says the u.s. recovery could drive through 2021. he told 60 minutes the economy will recover steadily through the second half of this year, but he said a full recovery depends on people being confident and that may not happen until a vaccine is available. it is the first meeting of the world health organization's governing body since the coronavirus outbreak and china will be challenged on two of its most sensitive issues. those are how beijing handled -- virus and the status of participation. an investigation into the virus's origin. third-largest economy fell into a recession. andnese exports plunged 22% the economy is expected to grow worse. oil rose for the first time in two months. west texas resumed their run

after 19% last week. producers in the u.s. continued to cut output. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. this is bloomberg. thanks so much. level, dowh a 40 futures up maybe 50 or so. the vix come in middling. ist really interests me pushing against the rich -- the risk on field. seen gold elevated, sterling retreats. the swiss franc really wants to

put a bid on stronger swiss franc. francine: i am looking at stocks climbing in europe with futures and i think you are right. crude oil is on the up. seeing a lengthy recovery depending on when the vaccine gets delivered and not looking just at wti, i am also looking at the pound you mentioned earlier, currently at 2123 but guild is rising. -- but gild is rising. tom: very good. is bobwhere in the world nardelli, not only about the corporate work ahead but the tough decisions amid uncertainty that corporate officers have to take.

nardelli joins us this morning. how do you plan if you don't have an exit? how do you do a five-year plan if you don't know the calendar out to five years? excellent point. as we all climb out of ourselves -- out of our shelters, it is the certainty of uncertainty and having lived through several experience,years of the variability based on the business is the issue. if we just pick one airline -- one for example, the airline industry, atlantic and delta down 80% and that tumbles into boeing where dave calhoun presented a realistic view of the length of recovery but as that business falls away, it tumbles to ge and we saw general

election -- general electric aviation layoff high-tech assemblers in plants around the world. -- for everyone technician at ge, you've got 10 in the tier one, tier 2, 3 or four. i see this recovery taking a tremendous amount of time. what is going to happen is first they have to worry about protecting the worker. then as the worker comes back based on seniority and locations and jobs for social distancing, they have to retrain and make sure the quality is there. the biggest issue is cash management. also supply chains. that is going to be the biggest hurdle given disrupt -- given the disruption we have seen and getting the big industrials back and running. go in a threes to

hour conversation with bob nardelli. we should point out bob nardelli was drawn and quartered as he exited ge and he looked brilliant as he got out from that train wreck. bob but what areica wants to know is corporate officers willing to give up the ratio of before?tion it has been if we go to a new paradigm, array going to go to a new paradigm with corporate executive compensation that is a little bit down from the glory days of before the pandemic? bob: there is no question, we have seen example after example of ceos stepping forward and being first among many to either eliminate totally their

compensation or to reduce it in half. my current experience, that is from fortune 100 all the way down to small private equity businesses i am dealing with day in and day out. all of them are trying to lead through example. i think you will see that. i think the new paradigm, to use your word, it is going to be interesting to see if wall street recognizes the work that has to be done by corporations on showing to provide stability in the supply chain which could add to higher costs, therefore lower earnings and will wall street punish those or doing the right thing? they are putting a lot of emphasis on esd. will they put the same emphasis on supply chain stability to avoid what we are going through right now? francine: what are the chances companies that would

be have been provoked -- that would have been profitable without the coronavirus that go under? bob: that is an excellent point. we were in a robust economy. unemployment. profitability. we saw it in wall street. the second quarter is going to be a disaster relative to earnings. ceoson the phone with 60 and they are talking about scenario planning of a 20% hit to gdp for the full year, not just the quarter so they are looking at -- when we are talking about temporary furloughing of workers, that may be extended because we are finding new ways to work, finding remote, travel and living is going to be impacted. i think this is going to be a very tough recovery with some hard realities.

companies on there the flipside that should have gone under that won't? how difficult is it for companies to get grants to make sure you are not propping up zombie companies? bob: we saw that right? prior to this pandemic we saw some of the retail companies that are already struggling and then you look at the retail will see a 67%, we bigger number going forward but there were companies on the edge already due to e-commerce. some of them have just recently filed for bankruptcy. my guess is that is going to purge some of the companies that were on the edge. unfortunately it will impact a lot of workers. tom: one of the things that people don't understand about a. nardelli is he takes number two pencil with a sharp

point and figures out labor costs. nardelli, everything critical back from china, we will bring it back into the unit it states and we will build it here. what a wonderful idea. can you do that with a labor delta? bob: that was my point. as we transition, we might be able to rebalance that going forward. initially we are either going to see higher cost and lower earnings or we are going to see that ugly thing of inflation where the cost is passed to the consumers and the consumers will have to digest that, but it is going to be slow for some time. we are on shoring but let's look at what happens that forced this offshore. i never had an outsourcing strategy, i had a global competitive strategy and when you look at the current administration, the support of were,ss, as to where we

and that forced the offshore to be globally competitive. now we will see the realities of a disruptive supply chain and have to bring that back home again. tom: thank you so much, bob nardelli. great to catch up, the former chief executive officer of home depot. nardelli talked about wall street. i could go three hours with the former ceo of goldman sachs. we will talk to lloyd blankfein later this morning. this is bloomberg. ♪

francine: this is bloomberg

surveillance. tom and francine from new york and london. tomorrow, fed chair jerome treasury secretary steve mnuchin will testify before the -- before congress. we expect them to hold steady on rates. the ecb publishes their account of the latest monetary policy on thursday. the annual gathering of the chinese legislature gets underway after induced delays. that is what we are expecting throughout the day. to our editorght in singapore to look at the markets and what they are looking for. coming with ages couple of the indices but in general, what are the markets looking at? is it central banks or treasuries or are they just following the number of infected?

>> the biggest thing at the moment is the u.s.-china trade situation. that has overtaken the virus as to what people are watching. to stop has asked tsnc dealing with huawei. the nationalhave people's conference and china would like markets to be stable. think those kinds of tension with the backdrop of where the virus blame lies with a presidential election in november, u.s.-china trade tensions have overtaken the virus as the main driver. whether the fed will be forced into negative rates at some point in the future. theme will ramble on as well. francine: how will the

u.s.-china relationship move from here? we understand from peter navarro that he was saying things like china was sending airline passengers to spread covid-19. mark: that was some very aggressive comments over the weekend. mostly balanced. it has become inured to the idea of strong rhetoric and it is whether or not there are concrete measures imposed. it is also whether china responds and escalates. the u.s. might threaten a lot, impose very minor measures in the market can stomach that. i think there is more focused on how china responds rather than u.s. measures. tom: good morning. i want to talk about the markets and about interest rates and

what they show right now. there is this tip from liquidity to solvency whether it is a developing economy, em economies and such. what do you observe when rates move now? mark: there are two things. talk in the market is which is correct, equity markets or bond markets? equity markets are saying we might actually get a rebound or something close to that. i would disagree with this whole diversions if both equities and bonds are priced the exact same way and they are disconnected from the economy and both pricing stimulus to keep pumping into the system. powell says the fed is not out of ammunition. when i look at bond markets, and they have stopped being.

a guide for the markets. used to be the treasuries for the ultimate macro instruments -- have stopped being a guide for the markets. it used to be the treasuries were the ultimate macro instruments. the short-term markets don't mean much. the bigger picture is more stimulus to come. tom: what do chairman powell's actions mean to singapore? indonesiasia -- to and to southeast asia? mark: that is a very good question. ultimately it is what the delivery is. he is expected to push back on negative interest rate policy this week. if the market intends to beat the -- intends to lead the fed, if the market does pressure the fed to entertain the idea of negative interest rate policy and remember, powell has promised they are not out of ammunition. i think that would be massive for the whole world. that will turn the dollar trend.

the index reached a record high the last few months but if the u.s. will follow europe and japan, if they follow them down that path, i think we will see the long-term turning point in the dollar which will ease financial conditions across the rest of the world. markine: thanks so much, cudmore's bloomberg's managing editor in singapore. stick --s hour we will we will speak with an economics professor. this is bloomberg. ♪

>> this is bloomberg surveillance. let's take a look at your bloomberg business flash. la $17.7 billion in the last fiscal year. -- theue of investments loss is the worst ever. another sign of the massive changes coming to the airline industry. jobs,e may cut 30,000 almost 30% of the workforce.

the massive double-decker planes conceit more than 500 passengers. the trump administration's crackdown on huawei is sending shockwaves through the asian markets. officials call huawei a security threat. >> on may 15 the u.s. commerce to specificecided lee dashed his fist -- decided to specifically target huawei. ritka: investors fear china will retaliate. that is your bloomberg business flash. much.itka thank you so let me frame the markets for you. i will not give you the details.

chairman powell among other -- you clearlyng see that with equities. of yields really coming back will stop the two year yield was lower and it came back higher but against that, there is some serious pushing including gold with big moves today. francine, what do you see? francine: we are looking at the what gilt is doing. we will speak with the head of blackrock.

francine: this is bloomberg surveillance. good morning everyone. we have been doing expend -- extensive data checks.

currencies linked to commodities but also gold. very different for now. i would point out that who meeting. it is the first time we will hear from president xi. that could make or break the situation. tom: i'm glad you bring that up. i believe the plaited up this morning. tapedea of this conversation of the president of china speaking to the who, particularly after president trump's criticism and over the speculation the president may withhold funding from the world health organization provides a really interesting tension. in the markets, i want to emphasize gold. i went back to the bloomberg earlier this morning and i took the london gold index and i took 1921 when it was $20

announce and there was a bit of a blurb in the 1930's and up we went to the nixon moment in 1973 where gold began to move and it basisnning on untreated to see the new leg up in gold like we saw a number of years ago. francine: i like that you bring it back to 1921. we don't always agree it is a good idea to go back that long because globalization has changed the way the markets look. ands a way of looking at it there was also peter navarro speaking to abc, comments that were incendiary about china. let's get to the "first word news." here is ritika gupta. ritika: federal reserve chair jerome powell laid down suggestions that -- shut down suggestions that -- played down

suggestions that the u.s. is heading for another great depression. he said the u.s. recovery could stretch through the end of next year. the trump administration stepped up its attack on china over the coronavirus. trade advisor peter navarro suggests china spread airline passengers to spread the infection worldwide. china says the u.s. is lying. in the u.k., more warnings of the damage the coronavirus will inflict on the economy. the chairman of the u.k. fiscal watchdog says output would likely be a third smaller. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. , this isa gupta bloomberg. , thank you so much.

crossllege of the holy had an extraordinary month. not only dr. fauci and his acclaim as the nation's neurologist, but also peter hays coming to the rescue of laurens bank over the future of our municipalities. is head of minas appellate the work at blackrock and he joins us this morning. i would be grossly remiss in not focusing on your world. how threatened are those be disciplined bonds we own that a? assured aaa, aa and questionat is a good because a lot of people are misinterpreting this as being bad for the entire markets. it is important to separate out the market.

there is a lot of guesswork going into what the pandemic and economic shut down mean for the u.s. and municipal bonds. the high-yield part of the market, let's leave that alone. that is going to be under a lot of pressure and we see that in retirement centers but the bread-and-butter of the market, the general obligation bonds, even revenue bonds, you look at fta, it came to market two weeks ago and the deal was oversubscribed and it shows the essential nature of the service, the long-term viability. there is a lot of noise still to come, a lot of uncertainty around all of this including in the minas supermarket but the idea that states may declare bankruptcy or your bonds are not going to pay is just not correct. what has theyes, price of bonds done?

up, what a yield huge opportunity to create total return in california paper. bonds actuallyal done -- what have municipal bonds actually done? peter: it has been a roller coaster. that is probably true of most asset classes when you come back to the beginning of march. we had two weeks where the index up over 3% to down over11% and that occurred seven or eight trading sessions. there was a big snapback because of that total return you talked about as investors recognized the opportunities being created. they stepped back but they haven't come all the way back. yields are still low but when you look at what we have done compared to investment grade corporate's, we have not rallied back as much. the index back on the year is

about flat. come all the way down now and we are back to flat and it is because get back to your first question around the uncertainty and the impact of what will happen in the market going forward. eight good backstop for issuers, they have not done anything directly in the market and now orhaps over the last seven eight trading sessions, the market feels much more healthy. the state of illinois came to market, oversubscribed and they were able to upside the deal. they came at a premium spread so they are paying for some of the economic pain and some of their credit situations coming into the market but nonetheless the market is clear. i think the market is beginning to heal itself but it still has a long way to go. that the do you think fed will go into negative rates

and what would be the impact? interesting question. i have never been a believer in negative rates. if you believe the fed rhetoric lately, you wouldn't think so. it seems the economy would have to take a big second wave downturn that would prolong this recession well into 2021 for rates to go negative. it might get close on the front end. it is close now. it is difficult to see negative rates, difficult to see what has happened and some of the european countries and elsewhere around the world happen in the u.s.. rates may fall again. hasn't think the market fully appreciated the magnitude of this downturn. , we couldes last week

go lower in rates. it is likely municipal rates will go lower. francine: what is more dangerous? the crisis will be deeper or that recovery will be patchy? peter: i think the bigger danger is that the downturn will be deeper and more prolonged. and is much more dangerous will likely have a longer-term impact on the u.s. economy and the global economy. that is what i think is more worrisome. tom: peter hayes, thank you so much. peter hayes is with blackrock. much more coming up. in london earlier today, what a fiery interview, michael o'leary of ryanair. that leans over to the kind of large carriers he is criticizing, looking for big bailouts.

david rubenstein in conversation with oscar nunez -- oscar munoz. this is bloomberg. ♪

>> we must strengthen local governments in the area of public health. we will prevail over the this may not be the last time a major health emergency comes knocking at our door. tom: every word will matter and it will not be lost in translation. the president of china speaking to the world, to the world health organization. absolutely unprecedented. bloomberg will follow this. we will have our headlines out

through the translation and interpretation of that translation. this really brings back everything you and i have heard over the last number of days. francine i think it all comes down to the multiple challenges president xi has. francine: this really comes at a pretty bad time for relations between the u.s. and china. there is this rising acrimony over china's handling of the coronavirus pandemic. president xi says he was invited by the who director general, who himself has come under fire. again, china's foreign ministry says the timing wasn't right for an investigation into the virus's origin which is being s and by the european

australia. the taipei government making a vocal effort to be included in these proceedings. the u.s.-backed block has also put forth to attend the meeting as an observer, angering china which views the island as a province. ofis almost a distillation all of the foreign affairs policy and tensions right here at the who which is why there is so much interest. tom: well said. to lookmportant point at taipei and taiwan and the tensions there including the united states. what is most interesting will be the response from the white house. to bring you up-to-date, there has been a bit of a shift. the president was thinking of refunding the world health organization. the last speculation was that maybe the president would still

withhold funding to the world health organization. inncine why don't you bring -- francine: i know you get fired up when we talk about softbank. let's talk about softbank and what we have used so far. this has been what his hat -- this is what has been happening over the last few days. the $17.7 million loss last fiscal year is the worst ever in the history of the japanese company. columnist joins us now. where did they go from here? tim: you would hope the only way they could go is up to be honest. although don't hold your breath. if big thing of course is you look at the numbers, they let me give you some stats.

they have 88 different companies , 50 of them to the end of march, 50 of them had a cut in their valuation. it is more than uber. it is across the board. definitely a lot of room for softbank to have a rebound but this pandemic could last. this could be an ongoing problem. .om: too short a conversation we really want to get you back on again, particularly for interpretation of president xi's comments. i halfs -- i have to ask about forsia, are we accounting their accounting mistakes correctly? you take it down the rabbit

warren there. i've got nothing to suggest there are accounting senate -- accounting shenanigans but there are differently -- there are definitely interesting ways they have used their money. all sorts of stuff to try and use some money out of alibaba without selling. this is something we have been doing a long time. they borrow against and do all these other things. francine: thank you so much. tim culpan, bloomberg opinion columnist. up next, the johns hopkins university public health practice in the -- and community engagement. we will talk covid-19. this is bloomberg. ♪

tom: good morning.

i am going to cut to the chase, we need to spend every second weekend on josh sharfstein. that mr.point out bloomberg's founder of the bloomberg lp. , i thought of you this weekend when i looked down across central park and saw that maybe like we were socially distanced but the truth is there were a lot of people in central park. the whole operation here seems to wrap around masks. masks of different shades, masks that are bandanas, masks that are a scarf, masks that are just a hunk of cotton. maybe there is some medical stuff and a very few select people have a very fancy n95 mask.

masks going to be what gets this nation back to work? josh: i think masks will help a little bit and it is a good idea for people to wear masks. they don't have to be fancy medical masks to protect other people, as long as it blocks the droplets that come out of people's mouths. people may not be sure they are infectious because the symptoms haven't started yet. it is a good thing to wear a mask to protect other people but the real thing that protects people is the distance between them. the physical barriers, the six feet, redoing schedules so there are not as many people in the office. the masks are the icing on the cake. hear that thed to masks are the icing on the cake can see the washington post chart of the seven day moving average, clearly the tone

is we are moving to a better place. where is the place we are moving to? josh: it is good news that there has been a bit of a drift down and i think a lot of people are taking a lot of precautions which is good, and people have to maintain that. -- inrus appears to be the heat, so that is a good sign for the time being but it also means we could be getting a false sense of security that we are distancing enough and that when the fall hits it could go right back up again. i am still pretty uncertain right now. francine: give me a sense of what we know about immunity. do we have a clear sense -- a clearer sense now about how money people are immune? -- how many people are immune? josh: there are a lot of positive signs and more recent positive signs that there is evidence of immunity but the case hasn't been proven.

the positive signs include thatl studies, the fact there aren't stories or scientific investigations of people who have gotten very sick twice with different strains. i think more evidence will come out, but we are going in the direction that when people are they may coronavirus, have less of a chance of getting sick for some time and that is good for a lot of different reasons. that is different from saying we know how to measure that, so the tests have to be calibrated with that. i think we are getting a little bit more optimistic. be good but only for some people's knowledge about whether they are protected, but it will be good as a sign for different kinds of therapies.

it makes it hopeful that convalescent serums will provide some protection. with the fact that humidity does -- with the fact that immunity does exist, that would be a good sign for a vaccine. francine: window we find out whether contact tracing is effective in protecting people -- when do we find out whether contact tracing is effective in protecting people? josh: that depends on if the united states can launch programs that do it well. that depends on training. the johns hopkins training course has over 150,000 people enrolled which is great. becausere is needed these programs have to be run very well. you have to feel the find contacts quickly.

-- if we can do that well, it will really matter. tom: it is unfair to ask this question but it is so urgent right now for the midwest, i don't want you to comment directly on the panhandle but in texas were there to open things -- there seemsus to be a focus on amarillo, texas. statistically are going to see these flareups across the country? josh: there is a lot of risk and we saw one choir practice had exceed people infected. -- had 60 people infected.

we are going to find out that it is still a virus that has tremendous capacity. tom: dr. sharfstein, thank you so much. interesting monday. no question between the chairman's con -- comments on 60 minutes and other news that there is a nice lift to global markets. please stay with us through the day on bloomberg radio and bloomberg television. ♪

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vision fund loses billions and muslim she some -- and masayoshi son's warns of a bleak future. some analysts start to lean more positive. in the chinese president speaking at the opening ceremony of the world health assembly as hhe country faces hars accusations from the u.s. over the virus. welcome to "bloomberg daybreak" on this monday, may 18. i'm alix steel. richard breslow has this line. we all have good days, we all have bad days. today, we are just seeing a rally. part of that is helped by oil prices over $30 a barrel as supply has got