I am nejra to pitch. Nejra cehic. I the stoxx 600 in europe up almost 3 . Pushing to a higher open is in todays session. Nasdaq all higher by more than 2 . The question is whether this is a polish signal in equities or just a blip in a downward trend. Around the 75 handle, moving higher by seven basic basis points. You are seeing the broad dollar weakness. Bloomberg dollar index, out performers and underperformers against it, even though they are stronger, signals from the rba and of course in japan, record stimulus. Talking about a state of emergency, reflection and deflation, the yen up on some optimism on talks from opecplus and producers. Lets get to bloomberg first word news with Viviana Hurtado in new york. Hey, viviana. Viviana our biggest story is Boris Johnson being in intensive care after he was hospitalized over the weekend after his coronavirus symptoms worsen. For 10 days, he was in isolation. Are expecting to say the outbreak peak is in the next seven to 10 days. Restrictions from the u. S. On masks and other protective equipment just days after it introduced measures, the white house facing a glass from allies around the world after a public spat with company 3m, President Donald Trump says it can continue to export some masks to canada and latin america. Now Oil Trading Higher on signs the worlds biggest producers are heading toward a truce in their price war. They may cut output. Ahead of a Virtual Meeting of an opec plus alliance, tentatively scheduled, by the way, for thursday. The European Union facing its biggest challenge, warnings chancellor Angela Merkel. She is stressing germanys readiness to help revive the economy. She is pushing back against criticism that it lacks the neighbors and junk socalled corona bonds. And for the first time, china reports no new coronavirus deaths. It is adding the signs of crisis may be easing worldwide. In new york, there are indications the number of new a plateau. Hit global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Nejra . Nejra viviana, thank you so much. Now, Boris Johnson remains in intensive care. The british Prime Ministers Coronavirus Infection worsened after he was hospitalized over the weekend. Temporarily is running the government. Lets take a listen. The government will continue. The Prime Minister is in great hands, and the focus of the government will continue to be on making sure the Prime Ministers direction, all the plans of making sure we can defeat coronavirus and pull the country through this challenge will be taken forward. Is simonining us now french, chief economist at Panmure Gordon. Simon, thank you so much for joining us. The unfortunate update on the Prime Ministers health comes at a difficult time for the u. K. In dealing with the coronavirus crisis. Are you concerned that the governments ability to handle the crisis might get a lot more difficult with these latest developments . Simon well, look, the Prime Minister is, firstly, a capitalist, and that means the fact that he is no longer taking , it isle on this path dominic raab, will create some disruption. One of challenge here is delivering support to households and businesses, a huge operational challenge. Those delivery challenges are not run by one individual but hundreds and thousands of people involved in that effort, so i think it is important not to overstate the impact of one person and disrupting what is really important here, which is getting support, medical support and financial supports, through this crisis. It doeseah, i mean, come at a crucial time given the fact that the u. K. Is in the third week of a lockdown, and whether it will whether any sort of exit strategy for the next few weeks. You say in one of your outlooks it will be heroic in the extreme, to be certain, of what comes next, so what should longerterm investors have their eye on when it comes to the u. K. Economy and investing in the u. K. . Simon right, so i think there are six, if you will excuse me, the long list, there are six longterm impacts we see in the u. K. Economy. I think there is a very questionable future for dividends. The u. K. Is a big distributor of cash back to shareholders. I think that will be lower as a result of this crisis. I think working classifications, we have got a big gig economy in the u. K. Hink the type of staple stable work that the government will support. Tracking new outbreaks of the virus. The social is the big question mark coming, the very low interest rates, huge balance rate expansion seats will be followed for the next 20 years, as they have been for the last 20 years. A much more immediate increase to roll it back. Finally, much more of a global issue here, the short and the supply chain, a deglobalization that was and actually initiated war, covid19 Contingency Planning going forward. Nejra yeah. Simon, on the point about dividends, so before the world was really hamstrung by coronavirus, u. K. Equities were compared toloved many other Global Equity indices. If we do see a significant cut back or delay to dividends from u. K. Companies, are investors going to react negatively to this or see through the dividend cuts to the potential positives on the other side . Simon you are right to say that as a result of the politics over the last three years, the u. K. Market has become significantly out of, but there was an opportunity predicated on the dividend yield of 4 . You are right to say that incomes are rising and investors will take a dim view in the near term of the significant cuts to dividends, but, and this is one of the things i cite to the note, if they move toward capital, business investments, also physicaland capital, it actually generates positivity and earnings growth, rather see it increased than decrease, despite the fact that Headline News may go down. I think that is the upside that is important not to discount. At u. K. F you look companies then, simon, the more favorable to approach them from an equity or a credit perspective at the moment . Simon for me, to some extent, the answer to that depends on your risk profile, but if you are looking for maximizing returns at this right, i would take it from an expertise standpoint. I think it is ongoing, increases trying to the resources during a certain ackdown period, but it is success run now, and i think the potential upside, particularly if we see an exit strategy emerge, you would like it to be more significant there than in nejra the debt market. If we talk about than in the debt market. Nejra if we talk about an upside, simon, will the u. K. Recover in line with the rest of the world, will it be ahead, or will it lag . Simon um, it is difficult to see the u. K. Racing ahead. I think it will probably lag what we are seeing in asia, asia because certainly in china, the virus has curb, the containment measures in singapore, japan, means they will likely lead. I think the u. K. Will more likely be in line with the european trajectory in terms of an economic recovery, but this will hinge on the degree to which deaths over this period get subsequently worse or anulled. Recovery sheet, it will be slow, so that is the key determinant. Simon french from Panmure Gordon stays with us. Note, rising 40 since its closing in march, we did see that for the dax slowly after the european open, which was at 8 00 a. M. London time. Up byx higher, the cac 40 2. 6 . Coming up, jp morgan is ready for the storm. We will discuss that and Global Markets next. This is bloomberg. Bloomberg. Nejra economics, finance, politics, this is bloomberg surveillance. I am nejra cehic in london. Lets get a business check with Viviana Hurtado in new york. Viviana a surge in internet offset a dropoff in smartphone demand. 5 prophet was around billion, sales rising about 5 . The companies will break out the numbers. Now to boeing, the company said 787pending work at its dreamliner plant in south carolina, its a jet factory still in operation. Expecting itill when factory workers arms. Work resumes. Demand for longhaul travel evaporates. A new day for when it starts to reopen plans in the u. S. And canada. Beginninger saying may 4, it will progressively restart production at factories, and that effectively extends is shut down by two weeks. Rivals gm and ford have refrained from setting a restart date for their facilities. That is your Bloomberg Business flash. Nejra thank you so much. Morgan, jamie dimon, says he sees the pandemic leading to a Major Economic downturn and stress near the meltdown of 2008. Dimon adds he sees a bad recession at a minimum and jp morgan is not immune to this kind of threat. Meanwhile, with a lot of commentary like that generally building up, we are seeing a lot of optimism today. In europe, the cac 40 and the dax have rallied more than 20 from march 18 lows, and we see u. S. Futures in positive territory after gains of more than 7 across u. S. Benchmarks yesterday. Still with us, simon french from Panmure Gordon is on the line. Simon, the risk we see in equities over the past couple of days, is that a bullish signal for Global Equity markets or just a blip in what is a downward trend before we find the bottom . Simon i think the latter. On anf the commentary exit strategy from coronavirus does not suggest to be a straight line. It does not suggest that the economy, the Global Economy will open in a linear fashion. There will be a spite, eventually a second spike, in infection rates, and therefore i think it would be too heroic to assume that we have seen the bottom ends will progressively improve from here and things will progressively improve from here. I think we should prepare ourselves for a volatile journey and when social distancing measures get curtailed too quickly. That certainly, by extension, increases the likelihood it will have to be reintroduced and Economic Performance will trend downward again. Nejra how bad could it look, simon, in terms of Economic Performance globally before things get better . Simon it is a great question. I think in terms of trying to quantify how damaging it could perspectivefrom a of global gdp, we are certainly talking about a more significant downturn now than we saw in 2009. Goes will depend upon the persistence of unemployment, and one of the things that we have noted, get out, it is much easier to know, it is much easier to fire than to hire workers. I think you heard in your intro nancy pelosi talking overnight about a second stimulus package. Stimulus package is intended to support the supply side of the economy. To second set of packages is support demand and accelerate the hiring packages. Rebound, or a modest rebound. Rebound, terms of the and i know in some ways a lot of people say, you know, you really should not be searching for a bottom right now, it is too hard guess, but equity markets in the u. S. Might not reach a bottom for a dear. Does that mirror for a dear. A year. Does that mirror what you see in terms of a bottoming for a u. S. Economy . Simon i think that feels too long a timescale for me in terms of bottoming out of economic activity. Opening while my comments, i stated it will be a lumpy journey, i think it will be a lumpy journey economically but with gradual parts of the economy reopening, by sector, as tests become available, as we get closer to a vaccine. So i think a year, while there may be a trajectory toward a year in terms of having a widescreen vaccine available, the ability to compartmentalize parts of the economy, provide a it,ty net around feels like it should lead to an improving economic trajectory, slightly sooner than a 12month profile. At the moment, investors are focused very much on cases of the coronavirus worldwide, and that seems to be the main indicator guiding markets day by day. When that ceases to be the main indicator, what will you look at . Simon job hires. Simple is very well, simple, the persistence, and i keep coming back to the point, the persistence of unemployment will be absolutely key here. We simply do not know the degree to which productive capacity, Capacity Utilization has been restarted but can be or whether some companies, some households, some labor markets will not see through this period the keyat, for me, is determinant. Nejra simon french, key economist at Panmure Gordon, thank you so much. Coming up, the u. K. Prime minister is in intensive care. We will get the latest on his condition and the Key Developers in the Global Pandemic response. This is bloomberg. This is bloomberg. Nejra this is bloomberg surveillance. I am nejra cehic in london. Bloombergs Annmarie Hordern is standing by for the latest on the coronavirus pandemic. Run me through the latest developments in the u. S. President trump and Governor Cuomo seeing a plateau. Give us an update. Annamarie good morning. The possible plateau from new york governor of andrew cuomo giving some positive news in new york, and in germany, france, italy, spain, this idea that we could be seeing a plateau or a leveling off of these paces, but Governor Andrew Cuomo did urge in a press conference yesterday that you should stay home, maintain your social distance for you cannot be reckless, he says, and if we are, then potentially we could see those numbers spike up again, and actually he doubled the fine for those to 1000. One thing that is clear in new york is it is dire on the ground in new york for the Health Care Workers on the front line. We keep hearing that they need more personal protective agreement, equipment, and yesterday, 3m and President Trump struck an agreement, 3 million more facemasks per month to give Health Care Workers. Backandforth between the company and the administration. 3m will be continued to export some masks to canada and latin america with this new agreement. Nejra Annmarie Hordern in new york, thank you so much. U. S. Futures on the front foot after 7 gains in the benchmark yesterday, s p up more than 2. 5 . In europe, italys ftse med rising from its march 12 Closing Price could you have already seen the cac 40 and the dax rise more than 20 from march 18 Closing Prices. Green on the screen in europe, the 10year treasury yield, coming up, we will discuss. This is bloomberg. W . W . Uhiono nejra u. K. Prime minister Boris Johnson is still in intensive care as his Coronavirus Infection fails to improve overnight. He remains conscious but has received oxygen treatment. Global stocks and u. S. Futures rise. Theres growing optimism that the coronavirus pandemic may be waning in some epicenters. And euro area finance ministers look for agreement on a collective response to the crisis in a crucial call today. We will get the latest from brussels. This is bloomberg surveillance. Im nejra cehic in london. Lets get to first word news with Viviana Hurtado. Viviana Boris Johnson is in intensive care, his infection worsening after being hospitalized over the weekend. He has been selfisolating for 10 days, struggling to shake off covid19. Foreign secretary dominic raab is taking over temporarily. Government business will continue and the Prime Minister is in safe hands with a Brilliant Team at st. Thomas hospital. The focus of the government will continue to be that all the plans for making sure that we can defeat coronavirus and pull the country through this challenge will be taking forward forward will be taken forward. Billna the next stimulus from the u. S. Congress will be worth another 1 trillion, according to nancy pelosi, speaking on a private conference call. The speaker discussed additional direct payments to individuals, and extended Unemployment Insurance and more resources for food stamps. For the First Time Since the pandemic emerged in january, china reporting no new coronavirus deaths. New cases are slowing across much of europe, and in new york state there are indications the number of new deaths or hitting a plateau. Italys government has expanded powers to block foreign takeovers and is also preparing a massive injection of liquidity into companies that risk going bankrupt. The Prime Minister announcing new economic measures as the country enters its fifth week of lockdown. Rome has no plans to relax restrictions. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, Viviana Hurtado. This is bloomberg. Nejra viviana, thank you so much. As finance ministers are to hold the outbreak continues to claim lives and shut down economies across the continent. Lets look at key government centralbank features figures. Making use of the european stability mechanism. Take a listen. Calls fortemic crisis a europen, this time wide crisis, and it requires also a europewide solution. Commoneed now to build tools of fiscal response, not only leaving them to member states. It is what is now under statesion among member and the commission. Germany will work for solidarity in the European Union. So that we understand it is necessary to fight together. Lets spend some time thinking about the possibility of introducing euro bonds, corona bonds within the euro. If anybody would agree on that, it would never be in place at the right time to fight the crisis. Are one of the instruments in europe. All assessment is that it could be useful to create such instruments to support the open economy. We think it is a good idea to demonstrate the solidity of the fiscal response on the european side. There are other possibilities to issue bonds over certain institutions. For example, like the esm, if you would call that corona bonds, why not . Example, why not call them corona bonds . I think we have all the firepower we need, and we will use it. Nejra maria tadeo joins us from brussels with the latest. Good to have you with us. Are we likely to get a decision out of this meeting . Maria you know very well finance ministers are given 10 days to bridge those different opinions, and as you heard, there are many different ones. I would say it is different this time and it is not the first ofe we have heard the idea europe with a joint instrument. What is huge is the countries that are really pushing for it are not willing to let go of it. Before when Angela Merkel would say this is out of the question, we are not going to do it, the waters were almost calm. But this time the countries are not letting go of it. The latest one is the italian Prime Minister, who yesterday night said that he did not think it was a good idea. That is using it as a bailout fund. Do not look atng it as a bailout, this is money that is available now. Of if you was into the words think isconte, what we that it is still the case, there is the probability will not have europeanent at the level today. The only idea of bridging the gap was the french government, suggesting perhaps we should look at a fund that would run five to 10 years and the money could perhaps be raised jointly. But there are not many details. Italians have a bigger say at this point and they are not really moving. Tadeo, thank you for that update. In italy, france, germany, and spain, we have reports of lower numbers of new cases. That is a part of what is giving equity markets a lift in europe, highere dax and the ftse than march lows. A french group has been forced to lay off three quarters of its staff, roughly 220,000 people, due to the coronavirus pandemic. The company ceo plans to rehire them all. The company says it has enough cash to withstand the crisis. Ceo is currently fighting to make sure the Group Operations are in shape for when the rebound happens. Every oned to rehire of them. You areo let go right, over 200,000 employees out of 300,000 because it is closed as of the first of april. I dont know how long this crisis is going to last, what i know you will see light at the end of the tunnel. I dont know if we will come back as strong as ever before likely not, because of recession but i can tell you for a fact that today we have over 3000 hotels being closed on the network of 5000. I intend to reopen every one of them. I intend to rehire every employee. I hope the people will come back traveling and enjoying geography and discovering people by early this summer. I could be dead wrong. Surely itly will survive. Nejra great to speak to you this morning. On the question of the Hotel Industry and the travel industry coming back, you pointed to early summer. Lets get a little bit more visibility from you in terms of bookings. What are you seeing on that front that is giving you hope that you might see some sort of a comeback for the industry by early summer . The only sign of hope we have and it could be tiny is out of all the reservations we for july and august, less than 10 as of last night have been canceled. It means that people are and have to be as optimistic as i am in termss of the of the economy being under control again. I can tell you that i am going to make sure that my hotel will be open and ready to welcome any one of you. That is basically the sign that we have. And again, it changes every day. We wish you well. That is one of the song is messages i think i have heard from any ceo on the network. Lets take china as a roadmap. China, we understand, is returning to some form of working life normalcy. What can you tell me about the business in china . Perhaps there is a weeks ago, we had 25,000 employees in china. 2. 5 weeks ago, 85 of that workforce was at home. As of last night, the exact same number, those 20,000 plus people, 90 are reopen. Thehing small occupancy in 12, 20 , but business is slowly back, recovering in hotels. Theour associations second largest operator in china. 90 of the hotel with close to 60 occupancy. Of course, it is a very low budget segment. 98 are local chinese, but it is a good indication that within a country that has been badly hit, three weeks, five weeks after the fact of the economy being under control, it activity is back in the hotel space for sure. One thing that you have pointed to previously is your relatively strong Balance Sheet relative to peers. I wonder as we look past the crisis that we are in right now, as we have been doing for a lot of this conversation, could you relatively could your relatively strong Balance Sheet create opportunities for consolidation post crisis . It does one thing first. Day, 14 hours trying to look after my employees being furloughed, that they have medical assistance, which we have been doing. Is a dividend unpaid. I am also looking to my owners. But you are correct, having another 25 billion euros on cash in cash permits me to weather the storm and to handle a long crisis. I hope it will be much shorter, but it is a huge difference in facing the wave and not to be run over. And thank god we have this ability. Bazin, the ceon of accor. Ratings downgrades could come. We will speak to the sector lead for retail and consumer at s P Global Ratings next. This is bloomberg. Nejra this is bloomberg surveillance. Breaking headlines coming through from japan. We were awaiting a state of emergency to be different players to be declared. And shinzo m has done so. It is to last months in tokyo and six other sectors. A state of emergency in japan does not mean a lockdown, but it does allow states to implement certain powers. Also japan has been getting ready, record stimulus, simply a ,udget worth ¥16. 8 trillion aimed at shielding the economy from the fallout of coronavirus. The latest that we have from shinzo abes is that a state of emergency is to last a month in tokyo in six of the sectors. Shinzo abes saying that shinzo abe saying they will lift that. Have for the Retail Sector increased dramatically according to s P Global Ratings. They said the impact on the ratings will depend on the duration of shutdown, but they expect to take action across the spectrum of retail. Raam ratnam joins me. Great to have you on the show. Thank you for joining us. Lets pick up on that point, where you said the degree of any impact on ratings will depend on the duration of shutdown but also the projecting of a future rebound. How did those two things stand for you right now . Raam sure, thank you for having me. Good morning. Look, i think clearly the kind reflects a much larger spread for a range of sectors, and clearly retail and consumer i heard your previous speaker from accor talk about the global and so far in s p ratings, we have taken a range of rating actions across corporate and sovereign issuance due to the recent issues and the range from anywhere from automobiles, gaming, entertainment, and consumer as well. Thea in terms of some of hardest hit areas, do you think that they include travel retail, casual dining, mallbased retail, Discretionary Spending . How quickly could companies in those areas bounceback . Thing to bear in mind , restrictions developing even in online many nonfoodor retailers, the focus has shifted to managing liquidity. Even some of the larger ones, they are talking about investment ratings are talking about liquidity to be able to affect standard prices. Across the ratings spectrum need to preserve cash, and many are adapting and have to adapt their Business Models to survive. One of the obvious things we are seeing from a selfhelp measure on the financial policy side, it is the Larger Companies in the sector, even across wider by things responding like share buybacks. Essentially that was the first thing. Then obviously it will move on defending dividends, capping production to sometimes bear maintenance levels. There are a range of measures that we would have to do to come back to the other side. Liquidity, how intense are the liquidity pressures on the companies you are looking at right now, in the sense that, do you think they can be contained to liquidity challenges, or will they become solvency issues . Obviously it depends on which end of the rating Specialties Companies are. Even for them, they started, some of them, going down on their credit. They will also benefit from the government themes around programs which have been launched by several governments around the world. Story iswer end, the likely different, obviously. So there will be some measures from the government around things like grants on the salary side for furloughed employees, the rates holiday for many businesses. That will certainly help on the cost side, but from a smaller end, companies are seeing transmission of the government schemes, to press the loan torantees, from banks smaller corporates. We will have to see how these schemes come onto these companies so they will stabilize Balance Sheets. Nejra you have already run through some of the levers that companies will have to pull in terms of cost. You have talked about administrative expenses, pulling back on capex, and reducing share buybacks, potentially cutting dividends. Will that make these Companies Attractive to credit investors, or just sort of offset the worst case scenarios, as it were . A very think that is interesting question. Trying toare differentiate credit policy in a time like this. Where you see companies in Business Models under enormous strain. One thing to bear in mind is that even before coming into this crisis, we have seen many, many of these companies in the space, certainly after these records, buying issuance. We have seen for the last two years or so, accommodative financial markets, and investors , investors investing the dial for yields. Many of the retail leisure sectors have a lot of ledgers leverage on the Balance Sheets. A rangeseen leverage in of eight times to 10 times, relatively tight. Many of these countries many of these companies are able to there is a wide risk for us that some of these Business Models, especially companies which came into the crisis with very high leverage, the structure could become sort of almost unsustainable in many cases. S p global ratnam of ratings, great to have you with us. On the positive side, you do see grocers and pharmacies also benefiting, and supply train. Upply chain risks Prime MinisterBoris Johnson continues his fight with the disease. We will bring you more on that next. This is bloomberg. Nejra economics, finance, and politics. This is limber surveillance. My nejra cehic. Prime minister Boris Johnson has been taken to intensive care as his condition worsened. He was first taken to st. Thomas hospital on sunday but became more seriously ill yesterday afternoon. Ed, great to have you with us. Bring us the latest on the Prime Ministers condition. Are we expecting an official update today at some point . Yes, we are expecting an official update roundabout lunchtime come but there is no change is in his condition overnight. He is receiving oxygen treatment at st. Thomas hospital to help his breathing. He is not on a ventilator, which is important. Are is the moment where you in really critical condition, and he is conscious. At the time saying he has not been intubated. Meantime, dominic raab is fortizing deputized Boris Johnson at a time we are going into the peak of the coronavirus in the u. K. And there are big political decisions in the coming days, how to sort out testing, provide enough ventilators, provide Health Workers with another with enough personal protective equipment, and what to do about the lockdown. Does the government have to tightknit, and does it have does it have to make plans for how to cope when all this is over . Evans, thank you for joining us. Bloomberg surveillance continuing in the next hour, risk on across markets. This is bloomberg. Tom this morning, in this pandemic, fighting the virus, it is about breathing and simply not getting pneumonia. This tuesday, the Prime Minister rests in intensive care. He is in good spirits. Nhs up raab thanks the and down the country. There are good spirits among epidemic knowledge just germany, spain, even the most beleaguered new york and new jersey offer the hope of less deaths. Japan and saudi arabia begin the fight against the virus. In the markets, the shorts are crushed. Three days running, equities reprice higher. Even em currencies find a fragile bid. Good morning, everyone. This is bloomberg surveillance. We begin on tuesday in new york. Im tom keene. In london, guy johnson in for francine lacqua. Francine is