part of that forward guidance is extended by the fed, and part of it is that you have a lot of technicals driving the bond market and a lot of issuance, but also incremental demand. not just for safety but for the fed itself. keep in mind the fed has and ased about 1 trillion half dollars worth of treasuries in the past few months since march. that's equal to the amount it purchased and all of the qe experiences in the aftermath of crisis.al financial there's a lot of supply coming online and a lot of demand as well. one potential implication is you are stuck in a fairly narrow range for long bond yields. romaine: it will be interesting to keep watch on that range.

we did just get the closing bell on u.s. equities, which have been trying to break free of the range they have been in for some time. 2971 is where we are ending the day on the s&p 500 the nasdaq indices up 2% on the day. 2%.russell 2000 gaining energy, financials, and communication services leading the charge. twitter among those names. and along to -- analog devices also with an interesting rise. royal caribbean loses a little ground. scarlet: i want to jump in with breaking news. the regulator of fannie mae and freddie mac has come out with a plan that calls for more than $200 billion in capital. the regulators proposing the mortgage giants be required to hold hundreds of billions of dollars in capital to guard against potential losses, and this could eventually have an impact on mortgage rates and the

trump administration's efforts to basically free the companies from government control. we are keeping watch of this as are needed fors existing government control. is ben: still with us mandel, jp morgan asset management global strategist in the multi-asset solutions group. when we talk about looking for opportunities here in this market for those folks who do believe in a rally, i guess the question is, where do you look? do you look at the trendlines and momentum we had prior to covid-19, or do you start looking for more fundamental shifts in the economy and try and match up the companies and industries that may benefit from that? are definitely more of the latter. we think about fundamentals and policy as being paramount here. there are three basic tenets in deciding do you want to be

taking risk and where to take it. are inst is that if you an environment with a pickup in growth and the risks around that slope roughly balanced, in other words, we can imagine things going worse than expected, but they may well go better as well, that is an environment where we are adding to risk incrementally , may somewhat gingerly at the margin. the direction of travel is adding to risk carefully here. that we have no interest in fighting the fed. we think policy is an important backstop to an array of markets. as we are adding risk, we are adding equities with the upside exposure. we are also adding a balancing item in terms of credit markets where we think the downside risk is somewhat capped. these different facilities by the fed implicitly or explicitly. we arentioned earlier,

not making heroic bets on regional equity markets. this is exactly where you tend to see large style rotations, value versus growth, cyclicals versus defenses. we have long-standing underweight markets like europe that given those dynamics, we are not betting as aggressively on at the moment in the same way as our u.s. preferences a little lower at the margin. no big relative value bets to speak of. this is an environment where you are adding risk and doing it in a diversified way against equity and credit and also within equity markets as well. scarlet: moving along gingerly and there are some key themes, don't fight the fed, and adding to risk slowly. . ben mandel, thank you for us.ing he is the global strategist at the jp morgan asset management multi-asset solutions group. that does it for the closing bell. we will be looking out how

covid-19 could be morphing into something different, at least in the northeastern part of china where they are seeing a new outbreak. this is bloomberg. ♪

romaine: broadcasting live from new york to viewers worldwide, i am romaine bostick alongside scarlet fu and this is "what'd you miss?" scarlet: let's get a snapshot of

how u.s. stocks closed on the day. major indexes climbing to 10 week highs. . investors focusing on the reopening on parts of the u.s. economy even as the fed minutes show policymakers acknowledged the severity of the coronavirus pandemic, indicating they need to add more clarity to their forward guidance. within the markets, one area we are keeping watch is oil. oil has rallied for a fifth day. it is back at levels not seen since march 10. by the way, i just got word from my producer that i need to give you the headlines here on the white house as well. the top court has backed president trump and blocked the house access to materials related to robert mueller, the special counsel investigation. the top court has backed the president and blocked the house access to robert mueller materials. we will give you more details as we get them, but it looks like this would be a victory for the president. let me turn back to oil prices. . it was a bright part of today's trade and really for the last month when oil has been

recovering strongly. the data that has come out has shown crude oil inventories have been declining for a second week in a row. to give us perspective is the head of global commodities and derivatives research at bank of america. francisco, thank you for being patient as i came in with the news on the president and the white house. there seems very much to be this consensus that the worst of the crude market is now behind us. what could tip the balance back to the negatives? francisco? >> yes, sorry. demand has recovered from here into the summer months. i think we have seen consumption up by about 30% from the low

points in terms of gasoline. very importantly, remember, demand peaks around july 4. because of that, it is likely we will see demand pull back in the next few weeks. things important to consider, a lot of the supply shut ins, the beginning of the month, and throughout april, we will likely reverse as well. again, the tightness, the drawdowns in inventories for wti and everything else, it will start shifting in the next month and a half. we think prices will head towards $35 a barrel, maybe a little higher into the end of june. then probably we will see prices back down into september. that is our view at the moment. we think we are capped on the upside here. romaine: ok. that's a little bit of a focus on demand. when you look at the supply side of that equation, what is the price we need to pull the market

out of that upward sloping contango we have been in now for you weeks, for month really? >> that's right. to your point, we have extremely high inventory levels. even though we have seen a decline for a couple weeks, it is a drop. of course, we don't know if we will have a second wave of covid-19 cases in the second half of the year that may lead to further lockdowns. . i think that's of major risk to the markets. our view store remains that we will see higher prices into the peak window of july 4. people are getting back to work. we are seeing states across the u.s. reopening. the same is happening all over the world. china and other regions is already back to levels in many areas, so i think that's already happening, but we are

going to see production coming back into the market as soon as prices get to a sort of threshold. i think it is important to understand that limits the upside given the high and between levels. degradation will not happen for a while. maybe six months, maybe 12 months on a sustained basis in our view. scarlet:scarlet: great perspective in terms of not getting too ahead of ourselves here. clearly what happened in april had scarred a lot of people and gives us a new sense of what could happen in the global oil markets. obviously, storage concerns have started to fade a little bit ine, but what has the crisis april inspired in terms of the physical market for oil? >> you hit on a very important point here. toember, in the month prior the monday on april 20 when oil prices traded negative, we had essentially prices in candida in

the low single digits. -- prices ins in north dakota low double digits. when prices went negative, producers went in and shut production down pretty broadly and started to pull barrels out of cushing, oklahoma because nobody wanted to send barrels into a negative price contract. . that is what is cleaning up inventories. also, we have seen opec going out and deepening the cuts, but it was saudi arabia with an extra one billion barrels. emirates also helping out. as i said, all of this capacity, all of this spare capacity will start coming back pretty quickly. i think the bigger impact is probably going to be in 2021 and 2022 when the deep cuts start to be felt across the energy sector. we are not very constructive for this year. we think are -- we think we are

at the top end of the range. once we go into 2021 and 2022, things can get a little complicated if demand comes back to some kind of normal level where we saw the same in 2019. that will be quite challenging given the drain on capex in the last couple months. romaine: definitely going to keep watch of this. really great for you to be with us today, be well. we will talk to you soon. francisco blanche is head of global commodities and derivatives at b of a global research. coming up, a new cluster of covid-19 cases in china sparking concern over the mutation. patients taking longer to show symptoms and longer to recover. a doctor fromto johns hopkins university, a specialist in infectious disease. don't go anywhere. this is bloomberg. ♪

scarlet: the pandemic has delayed u.s. economic growth. michael mckee spoke with the dallas fed president robert kaplan to get his expectations on when the economy can start to recover again. >> with businesses reopening, i think you can see a good, slow, steady recovery in the third and fourth quarters. what i'm worried about is despite what the government may ,ay or what the guidelines are there are certain behaviors that consumers will be reluctant to engage in. whether it's shopping, going to entertainment or arts, anything where people are gathered. me, whatn example for

the feds have done for the lending programs as helped stabilize markets are the fiscal policy is key. i think this stage to recover faster, health care policies are central. what do i mean by that? ubiquitous testing, contact procedures, and i am one that a little concern we are doing more testing in texas, but i would love to see a national initiative manhattan project to really emphasize testing and quick testing in front of stores, restaurants, other facilities so people have more confidence that when they walking intore not a situation where they could be at risk. myhink until we have that, concern is there will be limits to how fast we can recover and that we will recover, but

without certain types of activities fully recovering. it will limit gdp growth and it will mean the unemployment rate will get more elevated than it would be otherwise. reporter: i can't let you go without asking you about the oil patch. you are in the center of it. the federal reserve bank of oil as far as most people are concerned. do you have any kind of forecast for where the industry goes, how many companies might go bankrupt if oil stays under $40? they expected 40% bankruptcy rate. is that realistic? >> it might be. what's happening is we are seeing here in texas and seeing it globally, we are seeing lots of drillers shutting in. meaning, it is not economic to drill and they are just shutting down. believe total u.s. production will go from the fourth quarter

of last year, 4.8 million barrels a day, and will end this year closer to 10.8 million barrels a day. the permian basin may shrink by as much as one million barrels a day. you will see bankruptcies and failures not only in drillers, but those who service them. having said all that, it is our own view that as demand returns, people begin to drive, activity resumes, which it must and we will work off the excess inventory as early as sometime in the second half of 2021 or early 2022 depending on the rate of growth. we actually think that you could see, and it's not surprising you are seeing and affirming in the price of oil, but in the meantime this year, you are going to see lots of restructurings and bankruptcies and challenges. reporter: how quickly do the

people who shot in those wells turned back on? >> that's what the price goes to. a lot of folks in the industry explained to me, once you shut in a well, it takes some time to un-shut it in. the magic price is probably in the neighborhood of high $30 or in the $40 range. it is our own forecast here at the dallas fed, even with that reduction of u.s. production by 2 million barrels a day, the actual daily production right now is much less than that and would even have further reduction. some of those shut-ins will come back by the fourth quarter. that is our view. we think the shut ins at the united states will be at their peak as much as 2 million barrels a day. we think a lot of that will come back.

why will u.s. production decline? because of the decline curve. even if you start drilling again, even without a lot of new drilling, you will have a natural production of output because you need to drill a lot more wells to decrease the rapid decline curve of shale, but a lot of that reduction will be by the end of the year. romaine: we were just listening to the dallas fed president robert kaplan speaking earlier television. . he talked about the coronavirus. there is some concern out there about potential mutations in that virus, raising concerns about how much of a handle doctors and scientists have on this pandemic. joining us right now is dr. a mesh doll joe, senior scholar at johns hopkins university center andinfectious diseases practices critical care and emergency medicine. great to have you again. give us a sense of how

much we know about the virus and based on how much we know, how realistic is it to expect a viable vaccine or treatment in short order? dr. adalja: you have to remember that this is the seventh human coronavirus we have discovered. four of those coronavirus's because about 25% of the common colds every year. and we know about the viral family as a whole. it's important to know also that mutations are something that naturally happen. all viruses mutate. not every mutation will have a functional significance. . most mutations don't do anything. we have vaccines against coronavirus's and animals. cowexample, there are coronavirus vaccines, and avian coronavirus vaccines. we don't want those mutating to setting.e veterinary

i do think we can develop a vaccine, it's the timeline that matters. how quickly we can do it. i think we have to be prepared we do not meet an artificial deadline of 12 to 18 months or the end of the year, but i think it is something biologically plausible and we will get a vaccine eventually. scarlet: from where you sit, do you believe or do you see that there are two different kinds of covid-19? one that hit the u.s. east coast from europe, from italy, and other one that hit the west coast a few weeks earlier from parts of china? there have been discussions of how they travel differently into the united states. dr. adalja: there are different strains of the same novel coronavirus, but they are not different in the sense that they behave differently. we can look at the lineage of a virus and understand where it came from, but it doesn't mean it acts differently. it just helps us understand where it came from from an epidemiological perspective. the year -- new york strain did come from europe whereas the west coast strain came from china. it's important because a lot of our public health is focused on travelers from china when the virus was spreading from europe

as early as christmas time. romaine: there's a lot of focus on these day today infection and onin various states a country by country basis. what data do you look at as being both important and getting a better sense of how bad ohio good essentially the recovery from this -- how bad or how good essentially the recovery from this can be? dr. adalja:dr. adalja: there are two things i look at. one is the percent positive of tests, meaning how hard you have case?k to find a positive if that is going up or staying flat or if it's decreasing tells you where you are in the trajectory. in the country as a whole, we are declining, the percent positive is in the low single digits now. that's a good thing. earlier in new york city for example, it was over 50% positive. we didn't have to look too hard. the other thing is hospital capacity. that is what social distancing

is about. flattening the curve to preserve hospital room. what percentage of patients are admitted that have covid? scarlet: i want to get your thoughts on hydroxychloroquine. brazil health minister says it is to be used for all patients in the first day of coronavirus symptoms. the government also recommends hydroxychloroquine, a sister drug president trump says he is taking as a preventative treatment. is this a case of using these treatments can only help and not hurt you? dr. adalja: no, it's not that. it is never that case with any medication. all medications have a side effect profile. you have to think about who you're giving it to and what the risk-benefit analysis is. . there's no data showing chloroquine or hydroxychloroquine is beneficial prophylactic. or we are doing controlled trials to understand that, but we don't have definitive david to recommend it universally. it should be done in a measured way with monitoring, proper consent, and watching with the risk-benefit is in individual patients.

it should not be done routinely. romaine: with regards to some of the optimism a little earlier this week around the moderna vaccine trial data, when you look at that particular trial as well as some of the other efforts out there right now to create a vaccine, what is the main marker the fda and regulators are going to need for them to sign off on something like this and put it out there into the population? dr. adalja: we have to remember, this data is coming from a phase one clinical trial which is not, designed to show whether or not the vaccine works, it is to show whether it's safe enough to move into phase two. what fda and regulators will look at is how safe is this and how efficacious is it? does it actually protect you from the infection? we will need three.wo and phase we are optimistic but we should temper enthusiasm based on the fact that it is just phase one. adalja is ata dol

johns hopkins, at the bloomberg school of medicine, the founder and owner of bloomberg lp. this is bluebird. ♪ -- this is bloomberg. ♪

let's go over to mark crumpton. backedsupreme court has president program blocked house democrats from getting access to confidential material from special counsel, robert mueller's, russia investigation. the report found 10 instances of possible obstruction of justice, but stopped short of determining whether president trump at engaged in obstruction.

the president says he is sending federal emergency workers to midland, michigan, where dam have cost flooding. it may cause the evacuation of more than 10,000 people. parts of the city of midland can soon be under nine feet of water. boris johnson says the u.k. will have a track and trace system in place by june 1. with 10,000 new coronavirus infections a day. saidon previously tracing infections is essential to lifting the u k's lockdown. the prime minister said the government will hire thousands of people to help with the effort. an is really court ordered benjamin netanyahu to appear for the opening of his criminal trial in jerusalem on sunday. they had asked the court for an exception. charged on breach

of trust and accepting bribes last year. he has denied any wrongdoing. his trial was supposed to be in last month, but was delayed due to the coronavirus pandemic. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.. -- this is bloomberg. maine: developed nations -- -- ine: the in the: we want to bring investment management market joining us right now.

we have seen columbia, south africa, emerging-market nations start to experiment with quantitative easing. i'm wondering, for economies that have already dealt with capital flight and have currencies often vulnerable to swings, is this the type of thing they can pull off? >> thank you for having me. it is a great question. i would argue that for the u.s., it stands out. is a different story. currencyad to unwanted depreciation pressures, which as you know many already experience right now. >> when we talk about those countries that are the most

exposed, what nations are we talking about? which nations maybe have a little bit more wiggle room to do this? for most stressed emerging markets, we are looking with -- are looking at those with high debt. if they do pursue it, they will face large depreciation pressures. like turkey and south africa. in that sense, i would argue less countries have ability to pursue these measures. for countries that may be able to pursue qe-like policies, i would argue that those that have limited external liabilities, such as brazil, mexico, india, they may be ok to have a weaker currency, but it is a tight rope

here. for brazil, the is a lot going on right now in the country where they are not only hit by the pandemic, but they are also hit by uncertainty. which is causing capital outflows right now. >> with regard to the pandemic, the result a lot of concern about the response in some of nations, like brazil, where you can see higher rates of infections and deaths for a of time.riod how do you factor in the covid-19 risk into the normal em risk you would normally see in these nations? >> sure. when we are looking at covid-19 coupled with normal vulnerabilities, where looking at those countries -- we are

looking at those countries that are safe havens. and china and south korea, who were more of experts in dealing with the virus right now, because they had direct experience of those impactful diseases such as sars before, they have more robust networks and contingency plans to deal with them, on top of having options in their toolbox for the economic it's from the coronavirus. such as china, which we think it is going to have a v shift recovery in absence of a second risk. >> i am glad you brought up china. when we talk about the em nations in asia, in previous synchronicityas

between china and the em nations . now you have chinese policy where the economy is turning more inward. does that create vulnerability for some of china's neighbors? the smaller developing asian nations that maybe had been developing on chinese economic growth and trade? thee think that one of things that will play out in the long-term is this the globalization -- de- globalization trend that will lead to supply chains being shortened, coming to where the consumption is. we think of this integration of globalization into different trade blocs centered on china, centered on europe, and centered on the u.s. those countries that are neighbors to china will obviously be utilizing their supply chain to china much more than they did before.

>> we are going to have to leave it there. please, be well. reach out to was soon. we will be back in a moment. from new york, this is bloomberg. >> we bring you special coverage of special coverage and implications here on bloomberg television.

>> dallas mavericks owner, mark cuban, says aid to businesses is

cities and states, even more moving ford. at what point do we think about moral hazard here? >> i don't think we are at that point. when you look at the bailout programs that were put in place, because there was so much liquidity, that we have got the mainstream programs with loans up to $25 million. i am not worried about moral hazard. we have companies that are knowledgeable of those programs that have not even been able to apply. what i am concerned about is whether we are negotiating well for taxpayers. when we start doing these really big loans, we should be asking

for stocks or options or grants in exchange for that just like other investor would do. i think that is really what we have to do. taxpayers deserve a return for their investment. >> there is a big difference here between the main street program and what is being done with larger corporations. industries do you feel like our most -- are most victim to falling prey to the idea of moral hazard given companies are receiving aid? >> things are so much in flux, and we are going through a whole events industry, the sport industry. i don't know much about moral hazard -- i don't know it as much about moral hazard as it is about getting people employed quickly. if we do not have more people with jobs and we have to continue to subsidize them with unemployment, it is going to be

very difficult for the economy to rebound, because people are not spending money when they do not have certainty about their future employment. you see that in the numbers. savings are passed 14%. the most they have been in 40 years. we are going to have to address consumer demand more than anything right now. without the demand, businesses cannot stay open. >> we were just listening to mark cuban, the owner of the dallas mavericks, speaking earlier on bloomberg television. let's get a quick check of the business flash headlines. there isf target says no crystal ball for him to look into regarding american consumers. online sales soared him about more -- online sales soared. the amounte boasting of flights they will serve in

july. delta gets close to 60% capacity on any individual right, that is the trigger to add more flights. jpmorgan plans to keep offices only have full when workers return. the bank has been placing employees' personal items in sealed boxes. jpmorgan told workers that not everyone will come back at the same time and they may be sent to a different location. that is your business flash update. time now for smart charts with abigail doolittle. abigail? >> this week, we are going to address whether or not the current rally off of the march lows will last. we have a terrific chart in the bloomberg terminal that makes the case that the decline that

we have seen this year and the rally is similar to only three other markets periods going back to basically 1929. that would be the first market period we had huge swings. that lasted essentially for five years. the market dropped by 40%, then up by 45%, then down by 83% for a decline of 7%. back in 1997, a huge decline, but a rebound. a little bit of a rally. nothing along the lines of what we are right now. then 2008, there was a rebound rally of more than 20% before the drop to ultimate lows. right now, it is not known whether or not this will be a bear market rally or this is the start of a new market. our guest is great to talk bullish. you think we are headed higher over the long-term even if there could be some stalls in your first chart. it is of the stoxx. it makes the case for sure. -- the stocks.

it makes that case for sure. >> our call is for semiconductors. indexmiconductor stock the shilling it is not back above the 200 day average, but it is breaking above resistance, dating back to early march as well. so it is confirmation of the strengthen the bottom panel. have a strong case to make -- we have a strong taste to make that chips are outperforming. >> it is interesting, because there had been a bearish pattern. a rising wedge that seems to be failing. they usually don't come to pass it perhaps we are going to make a pitch back to all-time highs. let's take a look at your next chart. that is the s&p 500. you are saying the leadership

is the right leadership. the stock we want to see leading the rally higher. >> that's right. the s&p 500 is coming to a test of its 500 day average around the 3000 level. the reason we expect the index to breakthrough is because leadership is turning risk on. in the bottom panel, we talk the ratio of the s&p versus the low volatility socks. stocks. it is breaking resistance against this despicable gauge of stocks. we see this as an indication that investors are embracing risk, which is a trait of a bull market rally. we think this is a bull market rally, much like the comparison to 1987 you were showing. >> in terms of those low volatility stocks, what stocks are those exactly? our privates of

conversation that was very helpful in terms of the separate composition of the year, there are three sectors that are bear market, two of them i believe is -- at least one of them sensitive. that is not really a strong economy recovery. but you expect to see some of those weaker sectors catch up? [no audio] >> thank you so much for joining us. we have a little bit of an issue, but thank you for your insight. this is bloomberg. ♪

>> welcome back. you are watching "what'd you miss?" -- i want toings

bring you some earnings on expedia. they are seeing first revenue losses in about eight years. -- the first revenue losses in about eight years. down 39%. that is an adjusted loss. the estimate was for one dollar 45. -- $1.45. an encouraging sign that shares are slightly up here. theant to bring in quickly cohost of the bloomberg markets close as well as "what'd you miss?" also a former model. think you for being here. what have you been watching? -- thank you for being here. what have you been watching? >> a historic day. for the first time, a 20-year bond auction. it went really well. surprises in the grand

scheme of things, because we know that they are in tremendous appetite for safe haven assets. you can add liquidity to the curve overall by having fresh up the run issues. but by and large, a historic day for people watching the market closely. >> there is a lot of demand for safe havens. what is interesting is when the trump administration decided on issuing the 20-year bond, at the time, they were not quite sure whether they would -- whether there would be that kind of demand for it. since then, we have had the pandemic breakout. clearly, the government needs to do a lot of borrowing. what was the thinking behind the 20 year bond? >> people have different ideas about why different lengths or terms of treasuries should be issued. this idea of, well, rates are low.

we should issue it on the long and. -- long end. if you talk to people in the market, it is not about the borrowers, it is about market structure and liquidity. -- there's not a lot of liquidity. people who might want to buy might have trouble with liquidations. from the market structure standpoint, it is a desire for more long and related -- four more long end liquidity. that is seen as a more compelling idea as opposed to this idea that the government rates -- tuck low in low rates. >> it kind of sort of validated some of the arguments mnuchin had made well over a year ago about the potential for something like this. pre-covid-19.

>> absolutely. we have seen this explosion of issuance with no shortage of demand. that is sort of a fundamental thing. there is anxiety that some people have about issuance leading to higher rates, but it just really has not been an issue. of course, volatility is high, with unemployment, is high. -- it's high. the market rebounded very little out of treasury. the 20 year aside, i think there -- i think they are a little bit lower on the day. it indicates it is going to be a very long time before the fed is indicating that it is ready to hike rates again. >> before it even contemplates the possibility of raising

rates. thank you so much for joining us. we will talk with you tomorrow. that does it for "what'd you miss?" is upberg technology" next. have a great evening, everyone. this is bloomberg.

>> welcome to "bloomberg technology," i'm emily chang, currently sheltering in place in san francisco. stocks climbing on the back of incremental steps taken across to reopen the economy. despite mixed news about vaccines and brazil becoming a new hotbed for the outbreak. in new york city antibody test