Transcripts For BLOOMBERG Bloomberg Markets European Open 20240713

Package amid disagreement on how to spend nearly 2 trillion. President trump says coronavirus measures shouldnt be worse than the problem itself. Europe tightens its grip. Leaders scramble to enforce unprecedented restrictions as 2000 more people die in italy and spain over the weekend. Angela merkel says she is self isolating after contact with a doctor who tested positive for the coronavirus. An hour awaynder from the start of cash trading across europe and it looks like it will be another risk off day as futures fall. Euro stoxx 50 futures as well as ftse and dax futures, down 4 . Futuresftse mib gaining, but i believe that is actually fridays trade, so that is not current live futures contracts. All life futures contracts are down, deep, deep in the red. If you look at u. S. Futures, we also see drops of about 3 across the major equity indexes, so s p, dow jones, and nasdaq futures all down. Its get into the markets with laura cooper, bloombergs mliv macro strategist. Laura, we have seen some forecasts. Dire James Bullard saying unemployment could be 30 . Gdp could drop 50 . This is essentially selfinflicted here. How bad is it . Laura i think it is too soon to tell. Certainly we will likely see a significant contraction in the Second Quarter. We will see the Unemployment Rate spike, but it is unclear yet whether markets are pricing in just a degree of contraction we are likely going to see. Crucially, it will be looking at the more timely, really key indicators. Joblessat the initial claim numbers Going Forward and the extents of the lockdown measures that could actually be spread out to the u. S. , because only 1 5 of the country right now is in mandated isolation but that could ripple out and have greater impact. Matt how much assistance are we theg to get from the u. S. , fed, from congress and the senate . How much are we willing to pay in order to slow the spread of this virus . This case,ink at what markets are looking for is the quick injection of cash into the system, because at this stage, what we are seeing is it is less about a case of worrying about deficits. It is more about the deployment of the fiscal stimulus. The fact we saw the senate bill blocked last night is probably why we are seeing markets react so negatively today. We will have to see some kind of agreement come through, there. I would expect that some major fiscal package is likely and are not pricing in that focus it yet, but certainly are seeing hurdles and the window is narrowing for whether that can provide temporary relief to the market route we are seeing today. Matt in terms of assets, we still have what typically are safe haven assets not really bid. Yes, we seen the treasury yield but wewn to 81 bips still have gold under 1800 an ounce and you can still buy over ¥110 for a u. S. Dollar. What gives here . At the end you look specifically, there is something going on in terms of the week ago, we saw the repatriation of those foreign funds back to japan. A record 4. 2 trillion, whereas data from last week showed that actually reversed partially, 500 billion outflows. That is why we are not seen the ended. The yen bid. Other traditional safe havens like gold, it is still the case there is dysfunction in market and a search for liquidity. So it is a case of selling those assets in order to shore up the cash come in the liquidity needed to fund your positions elsewhere because we are not yet seeing a floor for markets in this current environment. Matt laura, you are asking on the blog today, your question of the day is what would be the impact of 30 u. S. Job losses . What are you hearing from people responding . Laura interestingly, when we saw how markets reacted overnight in new zealand, how whenreacted in singapore these countries enforced more widespread, more tightened lockdown. If we were to see that in the u. S. , i would expect that is what could potentially spook markets a leg lower because by the time we get the Unemployment Rate figures, it will be in the rearview mirror. Certainly we are expecting to see a significant contraction. I think markets are anticipating that and it is crucially dependent on looking at the more timely indicators in order to gauge the magnitude of the depth of the contraction, as well as looking at the pace of the spread of this virus on a daily basis. We really need to see the likely peak and begin to slow in order to create some calm into markets. Matt do you think it will be worse in europe . We talk about the u. S. Economy, clearly one of the big engines european growth, but unemployment is typically higher and our contractions here, as well, are. Think nocertainly economy is going to be amy and from this, but what we are seeing from Central Banks and the government side, notably news out of germany this week that they are likely going to abandon their zero rule, they will see deficit spending. That is a material change, so i yes, we are going to see a hit but it is about being able to provide credit for company so they can survive. When we do see more the dust settle and economic recovery take hold, there are jobs for people to go back to. Crucially, what we are seeing in germany and europe could potentially curb that more so than what we have yet to see in the u. S. That is likely coming. Matt nonetheless, there are a lot of people working at jobs a lot of people who arent getting any income right now because of the government impose lockdowns, and youve got a lot of companies that are letting workers go without pay, airlines, in particular. Is it too late for european governments to provide the stimulus necessary . They havent yet. Laura i dont think it is necessarily too late because we dont yet know the duration of how long the lockdowns will persist, how Long Companies will have to be closed. We are seeing the covid Corporate Finance facility that will allow the government essentially policymakers to talk out wages to the tune of 80 for three months. We could potentially see that coming from other policymakers, likely from the u. S. , and that would certainly help to provide the kind of floor for collapse we will potentially see in labor markets are nearterm nearterm. Cooper, our bloomberg mliv macro strategist. You can join the debate on todays question of the day, what would be the impact of 30 u. S. Joblessness . Reach out to the team by typing ib tv. Weve got some more down arrow news coming out from corporations. Shell this time, reducing its cash to 20 billion or less for the year. Shell is prepared to take further strategic decisions. It says it will cancel the next trench of its buyback program. Investmentuce its from 25 billion the 20 billion. Thats no good for jobless numbers, and it will also cut the next trench of its buyback program. Want to be a surprise at all, shinzo abe says he wants to talk with the ioc about the possibility of or atning the olympics, least saying the currency of the world current state of the world is not appropriate for the olympics. You surely could have guessed that yourself. Senate democrats blocked Mitch Mcconnells attempt to advance a coronavirus economic rescue package on sunday. Thats next. This is bloomberg. Matt welcome back to bloomberg market the european open. Awaye about 48 minutes from the start of cash trading across europe and you can see futures down significantly. , cac, and dax futures down 3. 5 to 4 right now. Index closed in , at 18 point 27. If youve invested in that, youve lost 20 off the high. Has warned the u. K. Faces tougher measures, potentially including a full lockdown if some members of the public continue to ignore calls to stop social gathering. Newspapers this week and were full of reports of people meeting in parks and coastal towns against medical advice. Everything is on the table as far as the Federal Reserve is concerned. Thats according to st. Louis fed president and noted hawk James Bullard. Hes warning unemployment could hit 30 in the Second Quarter. He also sees an unprecedented hit to gross domestic product, which could shrink by 50 , he says. Morgan stanley also sees a record plunge by about 30 , though they are just talking about q2. China is talking of the prospects for a rapid economic rebound as the Global Economy sees further lockdowns to curb the spread of the disease, but people there go back to work. Mostations premier says of china is low risk and returning to normal. The central bank is echoing that sentiment, saying it sees the economy bouncing back in the Second Quarter. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Now, Senate Democrats blocked majority leader Mitch Mcconnells attempt to enhance a coronavirus economic rescue package on sunday. Thats after leaders in both chambers disagreed on how to spend nearly 2 trillion. , butparties want a deal differ on key sections including a 500 billion chunk that could help companies or local governments. The democrats are against that. Asmany may borrow as much 370 billion in an unprecedented financing push to cushion the fallout from the coronavirus pandemic, or the spread of that. Joining us now with more is bloombergs maria tadeo out of brussels and Annmarie Hordern out of new york city. How significant are the measures in germany . Well, im not sure if i would call them again change her, but they do show germany taking this idea of whatever it takes. We are looking at 150 billion euros in new spending financed by new money. These are not old measures. Somethingw borrowing, that has been a political topic for germany. You have to factor they have already said they would be willing to put 400 billion euros in guarantees and potentially 200 billion euros in loans to safeguard liquidity for companies. I would also say the story is not just in germany. The spanish Prime Minister is something calling for that will be need and no country will be able to deal with the fallout on their own. Know this is happening behind the scenes, but now you have an actual leader coming out and saying my country wants coronabombs. Matt spain, meanwhile, pushing for corona bonds there. In your native country, how likely is that . Likely,m not sure how significance to the fact the Prime Minister was willing to go there and it signals it was a difficult weekend for spain. There was so much escalation in the state of the week and that will hurt economically, the industry will hurt from that and we expect the lockout lockdown to be extended to april 11. What i do think is happening now is the government is looking at aand making sure recession guaranteed now, they say we need to safeguard the economy and that means corona bonds, politically, very toxic. Matt maria, thanks. Lets get over to Annmarie Hordern in new york. Ofre do we stand in terms the economic damage done by these government imposed measures and the kind of bailout the government can then give us . Annmarie well, it is definitely spend 2 they need to trillion, but they just dont agree on the details. Yesterday, we saw that when the democrats blocked this senate bill, this procedural vote that would have taken it to the next level, the main crux of the argument was this 500 billion dollars, a chunk that would go to corporations like airlines, which we have seen hardhit due to the pandemic. Senator schumer just said this is another Corporate Bailout. We spoke about this last week, similar to 2008 with general motors. This will be highly political and definitely controversial. Schumer, along with other senators on the democratic side are saying more money should go to state and local governments, things like hospital aide, ventilator aid, etc. Now this leads a question to what happens to the bill and the timeline. Already yesterday, Mitch Mcconnell pointed to the fact that since they didnt act on it, you are already seeing it play out in the markets. U. S. Stock futures hit limit down. Matt which they seem to do every day anyway. So what, we get mcconnell will bring this back to the floor, i believe, 15 minutes after the market opened this morning. Annmarie he said maybe there would be a change of heart after u. S. Equity markets opened at nine 30. He said lets have a vote at 9 45. Nancy pelosi said she will work with the house to come up with their own bill. To add to the drama we have seen in bc, a lot in washington, d. C. , rand paul got tested positive for coronavirus. He had met a number of senators through the week. Paul as well as mitt romney and mike lee, other senators are in quarantine. It is just adding to more pressure and more questions about where the bill stands. The third lawmaker in washington, d. C. To test positive for the virus, which means more lawmakers are having to stay inside and quarantine if they were in contact with any of them. Matt thanks very much. Onwill keep you updated these bailout attempts throughout the morning. Coming up, gold suffers a rough start to the week and oil drops toward a 17 year low. Commodities in turmoil still. This is bloomberg. Matt welcome back to bloomberg market the european open. 40 minutesess than away from the start of cash trading and once again, futures are down. Today is likely to be very risk off. Weve got ftse, plus500 cac and dax down 3. 5 to 4 . Germanyn as we get news is willing to scrap the black zero rule and borrow 370 billion to spend, even as we get news the u. S. Is working on a 2 trillion bailout and the fed says anything goes. Neel kashkari on 60 minutes yesterday saying the fed still has many tools and is willing to use them. The problem is, government imposed shutdowns across the globe destroying the economy with an absolute sudden stop to everything. As a result, James Bullard from the fed says unemployment in the u. S. Could rise to 30 and that the growth in gross domestic anduct could evaporate, actually turn into a contraction of 50 , so half of Economic Activity in the u. S. Disappearing overnight because of government imposed regulations to try and stop the spread of the coronavirus. Thatnt helping so far cases continue to add up, as do deaths. The u. K. Briefly suggested that building up herd immunity was one of the ways to deal with a virus. Destroyed, ands bloomberg click take breaks down how heard immunity would work and how effective it could be at halting the global pandemic. Heard immunity is basically the idea that if you get sick with a lot of infectious diseases, your immune system kicks in and it helps you survive the infection. As part of that, you build this immunological memory, a memory of the infection and this means for a lot of infectious diseases, if you then are exposed to the same virus, the same disease again, your immune system has a head start and is able to combat the infection very well, so you tend not to get sick. This is exactly how vaccines work. We shortcut that process without you having to get sick. What this means is that in a whole population, if a disease or in this case a virus starts to spread through the population, many people will get sick, but many people will also recover and they will have this immune memory that will allow them to fight the infection again, and once a certain portion of the population has become immune to this disease, the virus can stop circulating in the population, which means that another person wont get infected. No. It really doesnt, not as a strategy, and i think there has been some unit miscommunication in the information that has been relayed from the government. , and i hope i am correct in this, but i dont think that the government weategy was actually to say are not going to do anything and we are just going to let herd immunity developed, that that is our strategy. Herd immunity is a relevant thing to be discussing in terms as ais pandemic, but potential outcome of the pandemic, not necessarily as a strategy. It is not something you are actively doing. Next, we will give you more on 2000 people in italy and spain dying in just one weekend. The coronavirus, taking hold across europe, and new restrictions going to place. Way, one of the people who is self quarantined is the chancellor of germany. Angela merkel came into contact with a doctor who actually tested positive for coronavirus and she is now in isolation, although ruling from there. We will discuss. This is bloomberg. Matt welcome back to the european open. 30 minutes from the start of cash equity trading. Im matt miller in berlin, where you can now be fined point 5000 euros for meeting in a group of more than two people. These restrictions have shut down businesses from cafes to restaurants the barbershops. Pretty much anything where people are selfemployed. They will have absolutely no income Going Forward. It will just make it difficult to pay rent, to make car payments, to pay for health insurance, etc. And be very detrimental to the economy. Our next guest and talk about what will happen in europe. Predictions of 30 unemployment in the u. S. And gdp dropping by half. In europe, where the measures are so far more draconian, do you think we will see something similar or worse . I think there is no doubt we will head into a technical recession. How persistent that will be depends on how the virus spreads. Are seeing are helping that direction. It will also depend on the economic support we are seeing and weve seen the ecb act with a package that is openended and it says it will be there for the economy as long as is needed and finally, fiscal policy is starting to move. If you are in berlin, we are seeing big measures out of germany. Combination, the recession should be contained and we will see a recovery after the virus shock is happening. The virusod and how develops which is something economists cant predict. Matt are we seeing these economic rescue responses coming quickly enough, because it strikes me that youve got rates soaring in certain sectors. In terms of the credit market, it doesnt seem like there is a lot of liquidity there, and regular people are still going to have to meet rent payments in a week, and still have no access to funds. What we seen so far is on the National Level but we need to see the euro areas more coordinated response across the Member States and coming from the center, so that is something that is a next step, i would say. The good thing is there has been a lot of preparatory work in terms of tools to be developed, so now all of these developments we are heading toward in the are set out by the crisis. The tools are there. There are more things they can do. More things fiscal policy could do, but we are seeing a sense of urgency so it is not happening as fast as we would like, with the ecb not moving decidedly in its fiscal policy but has also stepped up, which is the first time we have been seeing this and something we have expected for a while. Assuming european governments have the Central Banks do what is necessary, do you expect a vshaped recovery from this . Know well, it is hard to how the virus will develop. At the moment, the key issues for Central Banks is to prevent economic crisis from becoming a financial one. Containing the effects on the markets is important, but in isms of how the real economy constructed, that will depend on how the virus continues. Recovery is certainly not going to be vshaped. Blowing see spreads out. Ive got a chart of highyield and investmentgrade spreads jumping back to the levels that we saw during the great financial crisis. Certainly there is a dollar shortage that still seems to be hitting markets hard. In terms of equity markets, a lot of people have seen one third of their retirement wealth wiped away already and in terms of jobs, we are seeing companies laying people off without pay already. Before any rescue packages have been passed. To do thist see how optimistically view this optimistically. It doesnt seem like everything is falling into place as quickly as it needs to, and to say the least, there is still a big problem in that governments dont have enough test kits to find out who has coronavirus and who doesnt. Danae yes, certainly. We are in a very difficult situation. The borrowing costs are very low. Some investments will take a in terms ofme, but immediately things they can do, is pressure on businesses, they are doing these. Not as fast a pace as we would like, i agree. Some of these measures are coming in. In terms of the longerterm impacts, investments, that will take longer to show. An important point about dollar liquidity is another thing we will see become more and more important. Pressure for the dollar funding grows and emergingmarket economies will be affected by this. Measures such as the dollar swap lines we have seen the fed put in place will be important, but more from the financial safety net to support markets that will come under stress from this. Matt can you see any alternative to this . We talk about measures governments are trying to put into place to help businesses, but governments have put all these measures in place to suddenly stop the economy. I mean, these wounds are selfinflicted. Can you see any other alternative . Danae there is clearly a tradeoff between how quickly how stringent measures do you put in place now to contain the spread of the virus to hopefully be able to get the economy back to a normal quicker than if you let it spread . Yes, there will be a big destruction and shock to the economy but you have to think in terms of shortterm, longterm dynamics and it might be a case of shortterm pain to be able to have a quick return later. We dont know how long this will last. Month, last month to from what it looks like. I think we also have to think about the measures that will prevent economic crisis from becoming a financial one, so in debt of, for example, mutual location mutualization, the imf bringing liquidity facilities we havent seen before. Central banks, more innovation. Helicopter money has been a measure suggested. There are tools, and more liquidity Central Banks can use and weve seen measures. A light at the end of the tunnel you can see in terms of what is happening in china, asia, where they seem to have gotten this under control a lot more quickly, and people are going back to work . Danae i mean, there is a question for Health Policy experts. An expert on to be how the virus will be contained, but we see certain measures for hong kong, china have seemed to work. The disruption in the economy has been more short, but in europe, we have to see how it develops. Matt thanks very much for your time this morning. Danae kyriakopoulou, chief economist at omfif joining us via skype. Next, no relief for credit markets insight as we have been talking about. Movies downgrade moodys downgrades lufthansa and renault to junk debt. We will talk with the head of Credit Ratings at moodys. Next. This is bloomberg. Matt welcome back to bloomberg market the european open. Right now, 19 minutes away from the start of cash trading and we are down in terms of futures about 4 across europe. A Monetary Policy blitz isnt enough to stop a selloff in corporate debt for now. The worst kraut route in credit markets since the financial crisis is persisting despite a flurry. Of central bank steps and promises. That comes as the u. S. Fails to agree on a rescue package at the government level. After cutting renault and lufthansa to junk debt status, moodys says the coronavirus will continue to cut profitability in the most exposed sectors. Joining us, the chief credit officer at moodys investors service. Richard, are these government measures just not coming quickly clearlybecause they are wreaking economic damage on these companies that are most exposed . Richard good morning. Admittedly, the measures i think are very strong, they are very decisive, and they will have a positive effect over the longer term. In the shortterm, there is a limit to how much they can do. Earlier,ntioned certain activities in certain sectors have been completely shut down. Spenders are reluctant to as a result of Health Concerns and under those circumstances, there is certainly a limit to how much Economic Policy can do in the short term. In the longer term, as in when abates, those economic policies will start to have more of a positive impact. Matt it is not just Health Concerns, right . There are a lot of areas where consumers are not allowed to spend due to government restrictions, and where businesses arent offering because you cant travel, for example. To buy planeay tickets. I cant go back to the u. S. Right now. Is that going to leave lasting damage . Richard well, i agree that certain sectors are having activities completely shut down now. It will certainly inflict shortterm damage on companies and we are already estimating the number of defaults in europe will increase, partly as a result of this, for companies that run out of liquidity. Will it inflict longterm damage . It is possible some companies will simply cease to operate, but i think it isin the longer term, these measures will not last forever. Companies will recover eventually and so will consumer spending. Matt i just want to point out that we are watching a presser here. This is not footage. This is a Live Press Conference carrie lam is holding. We are showing this while we talk to you. As hong kong imposes a 14day ban on all nonresident arrivals. Out kong is going to dole harsher punishments, she says, for quarantine violations and ban oroing shut, i should say, cafes in hong kong. Remember, they had been open previously and we thought that at least china in terms of was on thepread mend. Now we see hong kong going deeper into lockdown. In terms of what their expectations are for getting back to business as usual. It seems that is a long way off. Richard yes, well regrettably under the current circumstances, i think visibility is very limited and that is not just for companies. Was on the mend. Now we see hong kong going deeper into lockdown. Probably for governments themselves. Done are measures that are in the interest of Public Health and they will take precedence over corporate profitability at the end of the day, which is why they are being done. I genuinely have no idea how long they will last and it is possible he will be introduced at a later date if they are not viewed as sufficient in the shortterm. However, we do have a baseline scenario that things will start to normalize in the second half of the year. It is possible that might not happen. It is possible it goes toward the downside scenario, which is things will last longer and quarantines the last longer and businesses will remain shut for longer. No doubt, that would inflict more damage on the economy and require even more stimulus measures from governments to assist companies, but i would still have to say that in spite of of the very bad news we are hearing on a daytoday basis now, longerterm, i would expect there will be some recovery. Matt the you expect there will be recovery before we start to see major bankruptcies . I mean, does your baseline bankruptciesude that are widespread . France and germany want to stop that from bankruptcies that happening. Richard and i think they will take measures to prevent bankruptcies, especially in sectors and companies that provide some essential services, Healthcare Services or transport or where whatever it may be. We have put forth our view that defaults are likely to increase this year. That was already our view before the outbreak of this crisis, but this crisis will no doubt exacerbate that trend. I would just point out that default does not necessarily mean bankruptcy. A company can default on its debt but continue to operate, and i think we will have situations where Many Companies will recover, even after default, and continue to operate. Matt very interesting stuff. Thank you for joining us this morning. Richard morawetz, chief credit officer at moodys investors service. Coming up, the recession choir grows louder. Some are even singing from the depression hymnal. Morgan stanley calls for a record dropping u. S. Gdp. We will have your morning call next. The member, Bloomberg Radio is live on your mobile device or dab Digital Radio in the london area. Tune in. This is bloomberg. Matt welcome back to bloomberg market the european open. We are just about 10 minutes away from the start of cash trading and once again seeing futures down and falling further as we get closer to the open. Kfc and pizza hut operator yum brands says traffics into its stores is improving there, but recovery will take time. Yum chinas ceo spoke to bloomberg in shanghai about how they are dealing with the crisis. Were happyht now, to hear that around 95 of our stores are operational already and among the stores that are operational, about 20 of those still can only do delivery or take away. Stores and of our you take away, delivery, but there are still some stores that can only do take away and delivery. Of the traffic recovery is improving, but it will take some time. 95 ofalize that already your businesses have reopened, but how about consumer demand . Do you think there will be a vshaped rebound . Joey we expect our quarter one operating result will be very challenging, as we can understand why. However, the recovery of the business, i think we will have to be a little bit patient. The quarter two will still be a bit challenging. Etc. , we are seeing positive bit more development that we would like to see and in other northwestern parts of china, the progress is ongoing. As you can understand, wuhan is still in a dire situation, so it is a little more difficult. Allen can you tell us about some of the innovations you have launched during this outbreak . Joey the catering business, we we had been working on that, but the crisis give us the opportunity to really speed up the development of our catering business. We will have a customer menu for you, whatever the menu that suits your companys budget and needs. Only prepared state, but raw state because during this period of time, the customer need for home cooking has gone up. Ourselves to come theith innovations to meet needs of our customers. Matt that was yum chinas ceo joey wat speaking to bloombergs alan wong in shanghai. Economists are warning the world is already in a recession, the first since 2000 nine, but just how dire is the contraction going to be . Here with the details in your morning call is bloomberg staining. Dani remarkable that wall street has had to constantly change their estimates on a weekly basis. Morgan stanleys most dramatic estimates, 30 contraction in the Second Quarter is what they see. That is revised from a 4 call a few weeks ago. History,stacks up in the worst quarterly contraction was 1958, 10 . That is three times the worst level we have seen. Getting into some of those numbers, 12 point 8 unemployment drop in the second consumption will fall 30 . They say the economy has already come to a standstill in march and that will just get worse as countries and states continue social distancing measures. Thanks very much. Dani burger with a look at the dramatic and alarming calls for such a deep recession that it seems very much like a depression or what weve heard of the depression of the past. President trump tweeted that he gave automakers the goahead to start making ventilators. That tweet comes after a plea from governors including new yorks andrew cuomo for the government to nationalize medical supply acquisition. For more on that, lets bring in Annmarie Hordern from new york. Annmarie he seems to be giving automakers the goahead to get involved. He said in his tweet for general motors, ford, and tesla being given the goahead to make ventilators and other medical products. Execs, lets see how good you are. Know what this pronouncement meant. There has been debate in the u. S. Whether he should invoke the defense protection act, ordering the u. S. To marshal resources but trump said yesterday at a briefing that companies are doing it without that, so the center for Automated Research says you will not take an Assembly Line for cars, which i know you know a lot about this, and. Go right to ventilators. That wouldnt make a lot of sense, but potentially products could be used. Hoses from cars could be used as well as a lot of other products. See Car Companies doing it. Matt very interesting story and we will follow it. The open is next. Anna will be with you shortly. Anna admitted to go until the start of cash equity trading. Good morning. Here are your headlines. The coronavirus death toll surges. Morgan stanley sees the countrys gdp plunging in the Second Quarter. Stopping the senate from an economic stimulus package. And europe finds its grit. Leaders scramble to force unprecedented restrictions as 2000 more people die in italy and spain alone over the weekend. Angela merkellor says she is self isolating. Lets check out the futures briefly, and negative territory, backup more than 4 on all of the major markets. That obviously sets us up for a very negative start of the european trading day. As we get those early trains coming through, lets get to the start of the upper trading day. Stocks for the u. K. Is what i have for you, the ftse 100 down by 3. 5 , the ibex down come on days we have real negativity coming through. We have a lot of movement expected. It is going to take a little while, some minutes, to get a full and fair reflection of what these markets are doing. At the moment, the stoxx 600 down just over 2 . Futures down more than 4 on many of the large european markets. You see the bond market taking in italy, reacting negatively to the news of the death toll over the weekend. Will they see another day where particular italy stands out as an area of particular concern . We have seen that all the way through the night here in the european time. The asian market down by 2. 8 , so more weakness coming through their. A concern about Congress Failing to agree on the details on what they should spend the money on, how that money should be spent. Now people saying the package was not good enough. SayingJames Bullard unemployment could reach 30 if they do not work too stem that. Lets look at how the markets are changing to individual stocks, waiting for the full complement of opens, the cac and the dax not yet open, but we do have the ftse 100, as i said. We have to move up on the downside. It was not the day where they were selling everything. We do see moves on the upside, hello fresh, food delivery business, that stock is trading up by 3. 5 . There is a host of corporates to the upside as well as telecom companies. S around,tation there i of course, everyone working at home. To the downside, a mixed bag coming through in terms of the movers. Lets get things settled down, because we do not have the cac and the dax open yet. , 2. 2 oxx 600 down by 2 weaker this morning. That comes as the u. S. Fails to agree on a coronavirus economic rescue package. Joining us now with his reflections on what a time it has been, peter toogood, the embark group cio. Peter, good to see you. The last time i saw you was back in november, and even back then, i think you saw cash was the goal. Where do you stand at the moment . Peter yes, perhaps not for this reason, anna. This is very binary, and i think we will know this. Foru. S. Was my reason favoring cash, it was my valuation of the u. S. It was not my comment on anything other than that. I am afraid, even despite the falls, we cannot get too excited, we have evacuated evaporated the gains made in 2019. If you use the metric of where you should be in this dislocation in terms of the s p, it should not be 15, 16, 17 times. You could argue it is still there. If i get a haircut of 30 of it, it should go lower. Startingk for my multiples from a crisis should not have made digit multiples, i am afraid. It is not a comment on everything, but it certainly is the case that the United States is only taking away the flat of last year, which is what i had cautioned in november. We have to look at how big this slash to theer a Earnings Growth could we have a secondary factor that this is a marathon, not a sprint. Anna yes, so given what you set about earnings and where they will be tracks two, Morgan Stanley taking off gdp. Ofinst bullards comments employment, he was talking unemployment around 30 . And global stocks, we have lost about 30 of value since this all started, peter, but you were saying it will still go down. U. K. if you looked at the market last week, it was at a 10 or 11 multiple, never to where it should be nearer to where it should be for this kind of a crisis. If you look at the u. S. , they have only taken away the fluff gained since 2019. It is not enough. Unless you think it is the end of may and we are all up and running, and there is nothing to that suggestion anywhere and site, that this is just going to roll over that quickly. It is a case of market wanting to scout the future. It did not in the gse, it did not and 2000, when cisco, 60, 70 times, every one is different. This has never struck the economy before in one straight go. It means an early vacuum for 2020, the possibility of another and 2021 to do what multiple do you put on a great deal of uncertainty . Ifould continue to maintain not a midteens multiple for the u. S. Stock market. The risk is only that you have got further to go down. I think and the rest of the world, you start at a fair price. The market is differentiating a bit more. I think because europe and emerging markets started cheaper, look at the u. S. Dollar, how it has slide through the roof. Now,nk almost 15 trillion not even close. Perhaps,we need more, from policymaking in the u. S. We will get an update on that shortly and talk about that further. You are right that all of these crises are very different, arent they, peter . Stuffingntentionally the economy. It is going to be needed but only at the right time, isnt it . How do you rate the stimulus activity we have seen . Peter exactly. If you look at the deficiency in demand, but it is the second and Third Order Effects people are considering. Take a look at the united kingdom, just shut the shops. That is a secondary effect. The people promoting a recovery need to go take a cold shower. We are going to see a very long period of time where risk aversion, both from investors, but more importantly from the corporate perspective. , theif, by some aeria miracl end of may is the absolute peak in the numbers, that has still shaken the trade. It has put people the back foot. They have no savings. They are now going to be nervous. Sten 12 to 24 months, po whenever this ends, there will be more thoughts about the circumstances and how corporates behave in the future. By the way, i think it is healthier to use leverage, which has really been sponsoring the markets in the last few years, in particular share buybacks. If you think about it, i have got nothing to do with my money, so i will goose the exit price. Not actually constructive. And all of this that is going on, i think in the mediumterm, i think it makes a much healthier equity market. Anna that is interesting. I will check in on that in a moment, but getting the stock cac and the dax down by more than four point 5 . Interestingly that the ftse is still down by more than 2 . Shell, just this morning, peter, saying that they are going to cancel or postpone some of their share bag bag program. Buyback program. That would not be a surprise. You want to find a positive in the midst all of this negative, you think we would end up with a healthier market in the end with fewer buybacks . Peter the positive is that pandemics end. This is not the black plague. It is presented as that. We decided to make the decision on the health side of things versus the economy, but there is an end to this. 2021,they the end of they end. Is the best benchmark i have got, because i have got another one. Neverot have i have been in a pandemic. I was not alive in 1920. We do have an end to what will the, but it is so intense, earnings vacuum being a problem, pricing the market with earnings that aims is extremely challenging. Anna peter, thank you very much. Peter toogood from embark group stays with us on the program. We will get back to him shortly. Up next, the recession group cries louder. Just how much . More on that, next. This is bloomberg. The welcome back to european open. By 4. 6 , the down ftse down by 4. 9 , the cac and the dax both down by 4 . Interesting that the ftse moved 1. 9 this morning. Lets get to the Bloomberg Business flash. Shell is canceling the next phase of its buyback program. Feasible wont be before the end of 2020. Shell is also planning to cut cap expenditure. Capex will now be down 20 or lower. Airbus is adjusting its outlook and evidence, a range of measures to bolster liquidity as the coronavirus pandemic rips through the aviation industry. Abillion euros into worth about 16 billion. Could it be will start at 13 billion euros. Emirates is suspending nearly all of its passenger flights. It will remain in operation as will routes to 13 countries, including the u. S. And u. K. The Worlds Largest airline is looking to ground is bigger jumbos. It is also looking at temporary salary caps. Oil has drops to the lowest level since 2003, a waiting prospect between opec and texas to limit production. They were invited to address in june but hours later, his calls to curb output was criticized by drilling drillers. That is your Bloomberg Business flash. 8 13 here in london. Lets turn to the United States now, and the recession cryer is growing louder. Bank of america has seen a 12 drop, morgan and stanley Morgan Stanley has seen a larger drop. Expects a whopping 30 drop in u. S. Gdp. Mr. Bullard i noticed that people are using the word recession. I think this is not the right vocabulary for where we are. I think it probably will be a recession when all is said and done. There is a recession, and i do fear that that is where we are headed. We are in a recession. I think people need to realize the fact that that is certainly the situation we are in. It is a near certainty, and it will be one of the worst recessions in pierce time in peacetime. I fear we are underestimating the depth of the recession that will hit the economy. This is a partial shutdown of the u. S. Economy, so i think it is inappropriate to call it a recession. Groups cio, peter toogood, is still with us. The first one was mervyn king. It was interesting what he said, former governors of bank of england of course saying there is a lot talk about recession. Maybe that is not the right vocabulary. The question is about how much this debate about the vote to have will really matter, but doesnt help us perhaps to look at this as not a recession, because it is something else, because it is not being driven in the same way as other recessions . Peter it is completely different. You have never stopped everything globally. Most. One place and then gradually go through the system. Hsa this in 2008 and 2009, because we all talked about how it was a great asset. Economy down, the so we have a global boom, at least that part of the world is booming. This is a global slump. You cannot describe 10 as anything other than a slump. We had to turn our attention soard a war in the 1900s, this is a disconnection. I will get back to my point. There is no science to back up that comment. Corona is what it is. There is no immunity to it. We have to get through the process of people getting it. Peaks and troughs are all exciting, but that is what this represents. It is now global and in an every part of the economy. New zealand, everywhere is shutting down. It is the slump. The use of the word recession i think is a little bit extreme. Does it last five years . Absolutely not. But the consequences for risk assets are very severe. Look at the debt markets in america. They are wobbling. They are getting fuel thrown at them, quite rightly. Unhealthyt just for businesses. Gse took out unhealthy businesses. This is sovereign businesses. B. A. If sovereign. It is not flying planes. Losing 50 million a day. These are huge numbers, and they are not stopping any time soon, so it is a Global Business bailout that we are looking at. Peter, is that going to get politically very difficult, and is that going to stand in the way of our recovery, if we have governments in the u. S. And the u. K. And many parts of europe deciding, based on metrics we dont know what they are yet which businesses are going to survive and which fail here . Peter that is an extremely interesting question, and the moral hazard is even more contentious. The new stakeholders are the employees. Shareholders can go whistle for the next 12 months, i suspect. To get your share buybacks, probably forget your dividends. At least cut in two or more, lots of dividend cuts, because we are dealing with an immediate crisis, and the stakeholders are the employees. But that is how it is going to look globally. It is a pandemic affecting individuals, therefore you have to look at individuals. Corporates this time are not gse. You are being asked to return your stock, because it is a very different kind of gap. A lot of them, perhaps, may be overdoing things, probably to try to encourage more than 2 trillion. 2 trillion, again, is not enough. I think we are going to get to at least half a years of gdp in fiscal and monetary, if not more, because i think youre going to have to, and you have to keep the markets liquid and the economy sovereign. It is a very difficult challenge. Anna peter, i want to get your thoughts on this conversation in the dollar, because you have seen a lot of money going into the dollar, and that was causing dislocations at plenty in all kinds of market. At the start of march, which is when the market started to focus in on this, does the here . Gain does this depend on the death rates, the infection rates, or does it depend on swap lines in the bank . Peter i think it is the last to a degree. The other, liquidation process will favorite, it is inevitable. That is not going to change. The government playing high yields and sovereign bond markets and the reserve currency world will be the beneficiaries, sadly, and that world. The great outline is the playbook for 2008 is there. People know how to keep liquidity in equities, bonds, and money markets, so at least we have the playbook to say what do we do . And how quickly the volume in which we do it is the deciding factor, but we know what to do, which is lets be thankful for that. Thanks very much, peter toogood, the embark group cio, reflecting back on 2008, a useful experience of course. Up next, we will bring you some of the stock movers this morning, including shall. The company says it will not continue with its next phase of share buybacks, growing a list of companies, and asked to weather the market crisis. This is bloomberg. This is bloomberg. Anna welcome back to the european open. 23 minutes into your trading day. It equities in europe under real pressure, down by more than 4 on all of the major markets, as you can see, the ftse, the cac, the dax all down, a little lesser in italy. Lets get to individual movers. Stories on what is going on here, but not an upward direction. Annmarie hordern . Annemarie good morning, anna. Anding anywhere between 10 47 percent, just for some context of how bad things are. 4 . More than we have heard this from a lot of oil and gas companies. Airbus down more than 10 . They were out this morning saying they are withdrawing earnings guidance, grappling with dividends, and extending credit lines. The aim is to boost liquidity, as much as 50 , some 30 billion euros. I tv also scrapping their dividend, pulling their fullyear guidance. How can any company talk about fullyear guidance . It is impossible. They would have to pause production in the u. K. As well as international, anna. Anna and just a few weeks ago, they said they had poor visibility. Annemarie, thank you very much, with some movers this morning. It is 8 24 here in london. Gold has dropped again this morning as investors brace for another volatile week in the market. The dollar is dropping after a recordsetting ascent. That is after a u. S. Stimulus package hit a roadblock after Senate Democrats blocked the bill. Peter toogood is with us. We know the usual list of suspects when it comes to havens, but they are not all performing like havens for when the markets become fearful and scared, people do not always sell what they want to, they say what they can. Do you see any havens out there . Peter i think in the longer term prognosis, gold remains positive. Gold walked into this with a huge amount of etf investment locked into the price point, so realistically, that was a challenge, and i think part of it is liquidation is an investment liquidation. What you are seeing is the unwinding of that. The people have gold exposure from liquidation. On the outflows are enormous, and the mediumterm has to be very, very challenged. You cannot have governments issuing debt at levels we are discussing without some impact. At the end of the second world war, debts were low, and it cost debt. F government i am not protecting for a moment that is where we are going to go, but you will see an awful lot of issuance. That is one of the challenges. They are going to change, and we will also see the fiscal bug is being caused by the pandemic, not the green deal, as we anticipated. The government is participating more in the economics of the world, and the bond market will be a very interesting market moving forward in terms of the way it moves. It will be a very different kind of market. Anna peter, briefly, are you discerning from one stop to the other, or is it too early for that . Peter they are focusing on quality of balance sheet, competitiveness of position. It does not matter what industry you are entered you can pick on telecom, staples, safe haven hideouts. The truth is who has got this one . You will find out in the next 12 months. Anna we will watch as the tide goes out. Peter, thank you so much for joining us. Peter toogood from embark group, where he is cio. Up next, we will talk about commodities. This is bloomberg. Bloomberg. Anna welcome back to the european 30 minutes into a trading day, we will get you updated on what is happening in the broader market. Just want to bring you a headline lvmh has agreed not to buy there tiffany shares in the opening market. March, weh of suggested lvmh might try to do that, trying to buy tiffany on the open market for less than 135 a share than they had agreed to pay. It seems they have had a change of heart and have committed not to do that, currently trading at 125. 44 at the close. Far, thehe picture so session that has been put through the first halfhour of it, the stoxx 600 in europe by down by just over 4 . The cac and the dax down more than 3. 5 . Ibex slightly better. Any clue if that gives as to why we have got such weakness on the german side coming through today. Onhad extensive clampdown german socializing and the like, as we know very well. We have seen this it seems germany is adopting measures about that having an impact as well on those businesses. In terms of where we are on the sectors, this is all we have for you right now. All the sectors are in negative territory. Travel and leisure continues to lose the most ground this morning. Lets get a first word news update. Here are top stories Prime Minister Boris Johnson has warned the u. K. Faces tougher measures potential he including a full lockdown if some members of the public continue to ignore measures to stop social gatherings. This after people are meeting at parks and coastal towns. Italy is banning movement inside the country as the death toll nears 5500. The nations Emergency Response as sundays numbers were slightly better than saturday. We all hope that trend will continue. China is talking up the prospect of a rapid economic rebound, as the Global Economy sees for the lockdown to curb the spread of the disease. The nations premier says most of china is at low risk and returning to normal. The central bank is echoing that sentiment, seeing the economy bouncing back and the Second Quarter. In japan, Prime Ministers abe says the world is not in a state to hold the olympics right now. He says the National Olympic committee, the ioc eight, is come up with that is coming up with options. The comments follow indications from tokyo that postponing the olympics may be unavoidable. That is your bloomberg first word news. London, 9 33 in paris or berlin. Stateside, 4 33 in the morning in new yorks democrats blocked Mitch Mcconnells attempt to advance a coronavirus economic rescue package sunday after leaders in both chambers disagreed with how to spend nearly 2 trillion. Both parties want a deal but they differ on key sections, including a 500 billion chunk that could help companies or local governments. Germany may borrow as much as 370 billion in unprecedented financing push to cushion the fallout from the pandemic. The latest from the story over the weekend and into monday morning, maria tadeo from brussels, and Annmarie Hordern in new york. Maria, how significant are these measures that we are seeing coming through from germany . Maria im not sure if this is a game changer, but it does show that the toll has shifted. We are looking at new debt that would be financed. Germany is moving away from the steph it from the straight deficit targets from the rules that they have almost imposed on themselves for years. That, you need to keep in mind the German Government has said they would not probably table 400 billion in loan guarantees. On top of that, i would say that we are speaking to sources at the German Government that point to one of the reasons for the package, a slowdown they are already predicting could be a contraction of 5 this year Going Forward. We are seeing the industrial sector being shut down, coming to a standstill as more countries go into a lockdown. But what is significant is from now on we are starting to see a real coordination between the european commission, the European Central bank, and germany. They have been all over the place for two weeks. Now they seem to be moving in one direction, and that is more stimulus. Anna eurozone for denver forged in crisis. I know something you have been eurozone of forever forging in crisis. What is the latest . Difficult to say whether this is going to happen or whether this is going to happen anytime soon, but it is fair to say that the debate has shifted, at least considering coronavirus something out there in the open. The spanish Prime Minister over the weekend said we need openly he pointed to the notion that this is going to be such an unprecedented crisis, there is no rulebook for how to emerge out of this, and everyone should come to terms with the idea that at least it is worth exploring. I would point to that and the fact that we have known for a week now that behind the scenes at the very least we should look at the debate and look at that question. It is not something we should just avoid altogether. Anna maria, thank you. Annmarie hordern, a dramatic night in washington, failing to come up with an agreement at this point. Break down what we have heard. Annmarie that is why we saw stock futures hit limit down. This is a Pressure Point that is weighing on the market. All the lawmakers agree that the u. S. Economy needs a 2 trillion bailout, but it is the details they do not agree on. The key Sticking Point is 500 billion, this chunk of aid that would go to industry hit the pandemic, most notably airlines, where chuck schumer, a democratic senator from new york, saying this is a Corporate Bailout with insufficient oversight. We saw this is probably one of the big Sticking Points, given in 2008 people for the gm bailout, it was being called government motors. It was highly controversial. Democrats say this is giving more aid to state and local governments as well as more aid to things like ventilators and hospitals. Now the question is, what is the timeline to get this bill passed . It is setting up to be a big hurdle. Much, annmariery hordern in new york. Maria tadeo in brussels. Meanwhile, their focus on one of the sectors has been really hard thea coronavirus, and geopolitical response to it. After the worst week since 1991, oil prices are dropping toward the lowest levels since 2003. The crisis is aimed at the oil industry, so bad that texas regulators are weighing whether to coordinate production cuts with opec, to limit production limitempt to fade to production have faded a little bit. Isning us on the phone oswald clint, Senior Research analyst. Great to speak with you. Do you think the market needs a deal between texas and opec . Is that something that youre watching . Oswald absolutely. Thank you, good morning. Otherwise we will have potentially 700 Million Barrels of crude products in the market this year, that goes into inventory, and could really keep the price at these levels or push it lower, so shortterm youre right. It would be incredibly conducive to having some type of political otherwise, the natural rebalancing parts of the market will kick into place, which is demand will return but fundamentally supply will start to contract. Supply will be shut in, but that could take 12 to 24 months. Either we get something political and some deal in the shortterm, otherwise we have to play the long game. Anna talking about the long game, who is going to play it best when it comes to the russians and the saudis. There has been a standoff that has us all watching who is going to play it best . Question. At is a good the important thing is saudi aramco, representing saudi, did a Conference Call and said they could pump 12 Million Barrels a day in 12 months without spending any more. There it is a comfortable level, 2 Million Barrels excess supply, but it is only for 12 months. From a country perspective, we think they need probably 60 to 65 to battle the fiscal arrangement. Hence, it is in our view a 12 months longer for that country. Russia has significant reserves in the last four years, back up to the 2014 peaks. And they have a lower cost space. So they can do it longer. They can do multiple years at this oil price level. But what i would say is, you know, dont forget there is very high cost trenches of oil supply, littered across this butet not only in the oil in the conventional oil in candidate. You have old production that will switch off. You have company here, turning of oil. Russia, there is small operators who will shut in production. So when you start that, it becomes big. I could see half a Million Barrels a day, which will be switching off from this point onward. It is one of those natural elements within the market that helps to selfcorrect. Anna we are having a little trouble with your line, apologies. We do see supply dropping a little bit, but will that be significant enough to make an impact on price when so much of the price is being driven by the demand story . Oswald you are right. We need visibility on demand. One of your headline stories, china talking a recovery in the Second Quarter. If that is true. That will help the demand picture because three quarters of demand growth in oil is china. The sooner we believe china is back up and running, the demand will become more visible, and then we do not have to be so pessimistic in terms of oil price. Anna thanks very much, oswald clint. What wewant to tell you think from the boj, what Central Banks globally are doing right now. And. 6 buying 200 billion yen of etf, the same amount as thursday. This is a record amount. That is why i mention it. This is one of the Central Banks, able to buy that kind of asset. Different Central Banks, not all able to buy etfs, not all able to buy corporate debt. This one is buying etf and large quantities. Sticking with japan, we will focus in on the olympics conversation shortly, postponing the olympics does seem possible. Now becoming a the decision become more a when, not if. More on that next. This is bloomberg. Anna welcome back to european open, 45 minutes into the monday trading session. Im afraid it is still bleak out there, down more than 4 on the dax, less than that on the ftse and the ibex in italy and in spain. Lets get to individual stock movers, some managing to cut the noise. Annmarie hordern has the breakdown. Annmarie we are seeing sentiment move to the downside today, and one of our companies coming out talking about the impact of the coronavirus on the bottom line. Lets start with some of these names. Looking at Associated British Foods this morning, the one on the bottom, down more than 7 . Prime markets closing every single storied operates. That will be a loss of 650 Million Pounds that each much pounds eachmillion month that stocks are shut. This has a lot to do with what we are seeing in sentiment trade. Equinor, defending their stock buyback, cutting costs. More Oil Companies are just on this quest to save cash. Anna thanks so much, Annmarie Hordern with a look at the movers this morning. Of corporate managing to make their presence felt. By 24oxx 600 down percent. Delaying the Tokyo Olympics is fast becoming a question of when rather than if. Shinzo abes said this morning that the current state of the world is not appropriate for the games to be held as the coronavirus pandemic continues to spread the ioc sunday said it had given itself four weeks to decide whether or not postponing the on the picks. Joining us now is our managing editor for asia. Good morning to you. Other major events happening, delayed already. Many sporting events across the world are being delayed. Why is japan dragging its feet, or is it japan . Much aink it is very japan factor here. If you take a step back and think back to the 1964 Tokyo Olympics, that was a pivotal a very emotional event in japanese history because it kind of showcase japan coming out of the postwar wreckage, and in the same way, the 2020 olympics were conceived of as an opportunity to showcase japan stepping back onto the global stage, putting behind the last decades, the years of deflation and abenation, Prime Minister making the japan is day the japan is back line key to his government. Introducing sales tax increases in the runup to the only picks hoping there would be a big boom and spending in 2020 to offset the impact of the sales tax hikes. Dovery much trying to whatever it took to keep the olympics on schedule for july, but it is clear at this point now that that is no longer tenable. Anna a timely headline coming across the bloomberg, chris. Japan to tell the ioc that they will accept the olympic delay if deciding that is the latest coming from the japanese news agency. So if a delay is decided and accepted by japan, what with the consequences of postponement be . Chris economists are warning we could see a contraction in japanese gdp every single quarter this year. The First Quarter is certainly going to see the impact of the coronavirus, and now we are not going to see the spending boost that we were anticipating from tourist arrivals, from sales related to the games, and you think the japanese trade is not back on track from the trade war. Things are looking pretty bleak this year. So the focus that is going to be , what is the Abe Administration going to do to fill the hole in demand . Are these fiscal stimulus measures going to be, and if they are not effective, we have seen some rumblings that others in the ruling party might want to make a play for leadership. You would expect that those rumblings would grow louder if the economy turns out to be basically in the tank with rising at the end of the year. Stay, keeping chris and see keeping track of the olympics. We will discuss the market macro strategist laura cooper. She will be with us next. This is bloomberg. Anna welcome back to the european open. This is the latest on the downean trading markets, 4. 8 on the stoxx 600. U. S. Futures negative, down 4. 3 on the doubt. See substantial weakness, disappointing at the lack of agreement that you would coran the senate over the over the coronavirus package. Yields rising in italy, where they are falling elsewhere. That spread between btpss, bund grows a little this morning, unlike the back end of last week where we saw the big packet from the ecb taking some of the heat from that particular spread. Thety markets as well wti price down 22 , but the , att price down by 5. 8 25, it seems any expectation that we would get an agreement on supply between texas and opec, some of the expectation was overdone and the markets it seems are reacting accordingly. Lets get a markets update with laura cooper, bloombergs markets live strategist who joins us now. Great to speak with you. You have been talking on the estimates the various going out with the strength of the strength and weakness of the u. S. Economy, the extent of unemployment we might say. So the question of the day, what would be the impact of 30 u. S. Jobless. Happen if we do not see fiscal action to avert that. What is the conversation . Laura absolutely. What we are expecting is we are going to see quite a sharp contraction in the Second Quarter that crucially is dependent on fiscal stimulus in order to come in. In order to prevent what could be Financial Stress from actually spilling over into a deeper debt crisis, so a deeper recession. That is why when we saw the senate bill last night being blocked, that is why we are seeing markets react the way they are, because they really do need that injection of cash and liquidity directly to those who are going to be impacted in the near term, in order to mitigate what could be a potentially prolonged deep recession. People need to come back to work, they need companies to come back to. Anna yes, putting everything on hold in a sort of safe hiatus. What about the u. S. Stimulus package and the failure to get that agreed . Larry kudlow was saying this could be 2 trillion, 10 of u. S. Gdp, but with what other countries have done, maybe 10 is not even enough. Best caset is the that remains to be seen. We are going to see a significant hit to income, erosion to the market, to those key industries. So we need to have support for those. It is a case of getting that as quickly as possible. When we look back at the Global Financial crisis, we have the cash payments. Those took about two months to deliver. It is really dependent, and yes a major fiscal package is still likely. There is also the timeliness of it. How can they deployed that so it gets to the workers and those companies . They have seen significant cash constraints right now, operating in the near term. Anna laura, thank you very much, laura cooper, bloomberg life macro strategist. Bloomberg live macro strategist. Getting to this question if you would like to get in touch go to tv , it is a function to use on your bloomberg. That is it for the european open. Stay with bloomberg tv. Francine europe struggles to get ahead of the endemic. Angela merkel selfisolates. Market turmoil. Down,tock futures Congress Failing to agree on this to millis package. Agree to theo stimulus package. A lot more coming your way. Global virus cases top 330,000. China rebalance in the Second Quarter as hong kong clamps down on travel. The Tokyo Olympics are set to be postponed. Good morning, good afternoon, good evening, everyone. This is bloomberg surveillance , a little different today, but still from london and new york. I am francine with tom keene. What a week we had last week, and what a day and probably the week ahead. We are expecting the stimulus from the u. S. There is a lot of concern of what behind the doors is going on. And we look at the numbers