Surgeons as the daily virus death toll drops. We get pmis from across the region throughout the program. Fragile sentiment. Stocks fall amid political sparring between the u. S. And china. President trump promises a conclusive report following allegations the coronavirus began in a wuhan lab. This crisis is different. Warren buffett explains why he has not put his record cap trial to work as companies clamor for liquidity. Futures equity markets, to the downside. Matt miller is with us from berlin. Futures suggest we will see some weakness at the start of trade. Matt absolutely. We are looking at euro stoxx 50 daxres down 3. 5 , as our futures. Ftse futures trading down. 5 . Nonetheless, in the red this morning. If you look at u. S. Futures, you red as well. U. S. Futures down about 1 across s p, dow jones, and nasdaq emini contracts so it does look like we are headed for a riskoff monday to kick off the week. Just under one hour away from the start of cash trade, as i said, and we expect, 58 minutes to go, and we expect it to be bad this morning, at least bad if you are long stocks. Good if you are short. Bloomberg first word news. Todays top stories for you. In the u. S. , President Donald Trump is raising the expected death toll. He now thinks as many as 100,000 americans could die from the coronavirus. He is also promising a conclusive report on the chinese origins of the pandemic. That is after comments from both the president and secretary of state, mike pompeo, that the virus started in a chinese lab. The Intelligence Community continues to do its work. They should continue to do that and verify so we are certain. There is a significant amount of evidence that this came from that laboratory in wuhan. Matt the daily death toll from the virus is falling from the u. K. To italy. That is as leaders across europe wrestle with how to use law and restrictions. Britain is not set to unwind its curves just yet as the government prepares guidance for the next deaths, including if employees need to where face masks and how public wear face masks and how public transport should be used. North and south korea have exchanged fire in the Demilitarized Zone for the first time in years. Seoul says the north fired several times at a guard post, followed by retaliation and a verbal warning. Deescalation comes a day after the north korean leaders first public appearance in 20 days. His absence prompted global speculation about his health. Berkshire hathaway struck any mega deals during the recent market volatility . This crisis is different, according to Warren Buffett. He says the company has not found any attractive yields to make with its record hundred 30 137 billion dollar cash pile, and he says once the fed stepped in, the opportunities became even less attractive. He made the comments at his annual shareholders meeting, held this year by webcast. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna . Anna matt, lets talk about whats going on in these markets with the markets life team live team. The riskoff move that has hit markets at the start of this month may have further to run. We more than 10 rally in world shares we saw in april is being tested into may as investors use lockdown restrictions against fears of a second wave of infections and dire economic data. Lets get to the markets with our managing editor in singapore, mark cudmore. Good morning to you. Adding into all of the things we are already concerned about, we have to add another beat of geopolitical tension between the u. S. And china. Is this something that is going to capture the markets thinking in the days ahead . Mark its definitely capturing the markets at the moment. We saw that on friday when we talk china and chinese rated asset most affected. Those are the ones who are affected by the news on friday that trump was looking to block a Government Pension Fund from investing in china. We have seen followup comments talking about mentioning the idea of tariffs again, and the last thing people need is that kind of trade work. There is a wholesome trade war. There is a whole selection of bad news. Amazon cannot make money. Lockdowns are being extended or at least restrictions are being eased a little bit slower than many people hoped. In march, trump was talking about easter as the day we would open the u. S. Again. There is a whole choice of bad news out there, but most of it was known already. This is a new element. There is nothing positive to focus on today. Matt what are you hearing from the question of the day on the mliv blog . You are asking how will the dollar react to u. S. China tensions. What kind of answers are you getting . Mark unfortunately, on this one, we have the game plan it in terms that we saw what happened that weplan in terms saw what happened. Part of the Dollar Strength last time we saw those trade tensions was around the fact that china would be more affected and therefore, the u. S. Would be more resilient, and u. S. Assets would be more resilient. More difficult this time. It is not that we will copy the exact game plan. Like always, markets i hate repeating this phrase markets rhyme. They dont repeat. They are a little bit more volatile, more uncertainty, but ultimately, more dollar negative this time around because the u. S. Economy is the one that is more vulnerable u. S. Assets are the ones that are much more overpriced. I think it is initially dollar positive intentions and then subsequently, it is dollar negative. Picture, the jobs does it tell that story . We are expecting to see the jobs report on friday, and expectations are for an like, ine drop, if you the level of job creation or increase in the level of job destruction we are going to see in the United States, a drop of historic proportions. Does this set europe apart from the u. S. , for better or worse, into the mediumterm . Mark i think the main way to view the jobs data at the end of this week from the u. S. Is that Financial Market participants are very well aware of whats happened. They have projected the numbers now. We have a good idea of where it is going to come in. The shock here might be how it is presented in the weekend news for the retail investor. One of the things of the last seems of the last themes of the last month or so is they have not been deterred by the coronavirus pair they bought the debt by the coronavirus. They bought the dip. Thiss been be contrary time. Retail has done well buying the dip and Financial Investors have been fighting the rally. This time, it might be this week that we kind of see those really scary headline employment numbers. It gets hammered home to the retail audience just how severe this economic depression is. If they start turning and selling out, that is the real scare for markets. Matt does that mean the rally that we saw in april, the rebound on the s p 500, and other indexes, is done here . Was that a bear market rally that is finished . Mark definitely, that is my view. That has been my view all along. A bear market rally. We are barely off those kind of highs from last week. Bers definitely will not celebrating until we are lower than here. It is interesting to note the bear market rally stopped exactly at the levels everyone was expecting. We talked about on the show a couple of weeks ago, we were saying 2900 was what we kind of assumed we would reach for the recovery rally. We got up to the 2950 level. Or just below there. And it has pulled back. Bers definitely will not celebrating because we are barely off those highs and we do not know where it will go, but we will certainly be encouraged by the price action. It will be bulls who will be nervous this week. Anna mark cudmore from our markets live team in singapore, managing editor of the bloomberg and live team. And remember, you can join in. How will the dollar react to u. S. China tensions . Plus tvt to us, i. B. We will talk about those u. S. China tensions next. President trump says he has little doubt that beijing misled the world on the scale and risk of the virus. We will have the latest, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 47ht now, we are about minutes away from the start of cash trading across europe and in the u. K. We see futures are down, much more sharply, for continental indexes right now than they are for u. K. Ftse futures. Ftse futures down only. 4 percent, but 3. 5 on dax and cac futures. Bloomberg business flash you. Todays top corporate stories from the terminal, Warren Buffett has dumped his stake in the four largest u. S. Airlines. The billionaire investor remains deeply exposed to the collapse in air travel. Berkshire hathaway owns all of parts per they bought the company back in 2016 in a deal worth 37 billion. It faces lean times as clients of boeing and airbus cut production. Roche is the latest company to win emergency u. S. Approval for a coronavirus antibody test. It is promising to scale up the tool that policymakers hope will help reopen economies. This was they expect production to reach the high doubledigit millions by june. The test looks for antibodies in the blood that has been raised to fight off the virus that causes covid19. Lufthansa expects to reach a deal on German Government aid soon, according to a letter the company sent to employees. To help would be a decisive step to secure the airlines future and it would make it unlikely the carrier would need protection. The company says the aide is important to help flights resume as soon as possible he possible. Itswestpac is deferring dividend as profits plunged to a two decade low and bad loan provisions sore. It faces soar. It faces an antimoney laundering fine. The company says this is the most difficult result westpac has seen in many years. And that is your bloomberg is not . Business flash. Anna President Donald Trump raised the expected death toll in america from the virus to as many as 100,000. In a town hall on fox news, trump also promised at promised a conclusive report. He says he has little doubt that beijing has misled the world about the scale and the risk of the disease before it became a global pandemic. For more, lets go to beijing now, where Bloomberg Markets anchor Tom Mackenzie is standing by with the global coronavirus wrap. Bring us up to speed. Tom i will give you a wrap of the crucial moves we have seen across the world in terms of the efforts to tackle this virus. Global cases have passed 3. 5 million so you are looking at nearly 250,000 deaths but we have also seen, importantly, at least one million recoveries. Shifting focus to the u. S. , in particular, you have seen an increase in terms of cases of about 2. 3 . That is lower than daily increase, the average daily increase we saw last week, so that is seen as a positive. Total cases in the u. S. Now, by the way, 1. 1 5 million. You talked about trump raising 1. 15 million. Talk about trump raising the total. Current u. S. Test stand at 67,000. France reporting 130 five new cases in the past 24 hours or so. 135 newthe fewest cases or so in the past 24 hours. In hong kong, 14 Straight Days with no new infections, and in fact, the government is looking at plans to relax some of the social distancing measures and they may allow cinemas and gyms to reopen. On the therapeutic front, Gilead Sciences had the fda approval. It is expected, according to the ceo, to start getting the treatments to patients in the u. S. Potentially this week. Those comments from trump drew the focus earlier this week in this part of the world. Matt understandably so. I think they drew focus all around the world. Tom, thanks so much for joining us. Tom mackenzie joining us out of beijing. I want to bring you some breaking news on the airline industry. We were just talking about Deutsche Lufthansa saying it is poster receiving a state aid package. Air france has won e. U. Approval for a 7 billion euro french guarantee and loan, so air france winning approval from brussels for french government bailout. The french government will be a subordinated given a subordinated shareholder loan and a guarantee, this according to the European Commission, the European Commission sending out an email statement telling us exactly what is going on here with air france. Coming up, europes health check. We will get a reading on factory activity from across the region today. Will they follow asia and fall to historic lows . We will discuss, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are 40 minutes away from the start of cash trade, and you can see we are set up for a very negative day on the continent here in terms of futures. The ftse not looking so bad, but still down. 4 . Overover to the next the next two hours, we are going to start getting in april manufacturing pmi readings for the major eurozone economy. They are expected to show stark contractions as lockdowns continue to cross the continent. Joining us now to talk about this is the cio of abp invest. He is turning positive on the euro after two years of holding a negative outlook but i want to talk first about your view on the pmis. This is data that we know is going to be bad, right . Is it going to be able to move the market . I dont think so, matt. I think the market has been too exuberant, in my view, and over the last few weeks, the market assumed the policy support and fiscal easing will help economies recover to where they were. They were a few months ago and i do not believe this will be as easy as the market expects. This is why we are seeing a disconnect between the s p and the dax, if you like. Such asasset, currencies or commodities, which are a little bit more benign. I know that you have been picking one market versus other markets in europe in terms of the equity market story. Why is it that you like the dax more than the cac . Is it to do with handling of the crisis, local exposure . Global exposure . Thanos two reasons. One is the broader exposure, which the dax has, and secondly is the strength of the german position in terms of the prudence, if you would like, of over the last few years, has paid off. I was one of those pushing for the german policymakers to move away from that over the last sort of 12 to 18 months, and they have stuck with it, which puts the economy in a far better position. We have also seen not only from the economic but also from medical developments in terms of hospital care so i do believe that the dax is going to outperform the cac, but we in thee further weakness dax, cac, and s p. Matt what do you think about the euro in general . We are seeing some signs of solidarity out of europe right now but it certainly does not look like merkel and the germans are willing to move towards shared debt without a orstitutional rewrite ratification of a treaty rewrite, new ratification of that treaty. How likely does the euro survive this crisis . Some have suggested it is in a very bad place. Thanos i agree with you, matt. I do not expect any change, i dont believe, in initialization of the debt, whether it is coronavirus or any other. I think the e. U. Will be kicking the can down the road for as long as it can, and i do believe that there is a risk. However, i do believe this risk of a breakup of the euro, if you like, is imminent, because that would only come under an l scenario, in other words, under a scenario in which the coronavirus regenerates eight into second and third waves. We remain in negative territorys of Economic Growth for the next one year to two years, and as a result, governments focus much more on their national agendas. Now, that is under that scenario, i can certainly see the breakup, but i do not have that as a central case. I think this is a very small probability put on the side, but being aware of. Anna you dont think an l shape. A v, a ww . What a w . What kind of shape do you give it . Thanos from an economic point of view, i see it as a u, but from a market point of view, a w. This is my disconnect from the current development. I think the markets were too fast in revaluing and bringing backup rerallying. A mis that this is expectation of economic developments. I think the economy will take longer. You expect markets to fall for it i will give you one example, and that is the importance of the smaller companies, micro enterprises. They make up one third of all the workforce within the e. U. Unlike air france, which we just heard from matt getting some subsidy, who will help those micro Companies Come through . U. K. ,r it is in the e. U. , the accommodation and food industry, it will take longer acting for the economic think packed Economic Impact to come through in the markets were a little bit too complacent. And the markets were a little bit too complacent. Anna thanks very much for joining us, thanos papasavvas, the us this morning on European Market open. Easing the lockdown. We are hearing about that from the french finance minister, speaking on the mastic radio in france. Germany and italy domestic radio in france. Germany and italy. This is bloomberg. Matt welcome back to bloomberg market the european open. 30 minutes from the start of cash equity trading, we see much deeper drops in european futures than we do in u. K. Futures. Remember, the ftse already fell when all ofriday these other European Equity indexes were closed for the may 1 holiday. It looks like Continental Europe has a little catching up to do on the downside. As we help you navigate the coronavirus news cycle, lets look at key moments to watch for this week. Tomorrow, a policy decision from the reserve bank of australia. We will watch for any update on their economic outlook. Thursday, Boris Johnsons government is due to review lockdown measures in the u. K. While the bank of england makes a policy decision and we will end the week with the u. S. April jobs report. To reveal the sharpest deterioration in the u. S. Labor market since records so basically39, the biggest drop ever, at least since the great depression. Lockdown,months of european nations are finally starting to roll back the harshest measures. Inheard from bruno lamer france. In italy, more than 4 million workers are cleared to return to work as manufacturing and construction restart. Germany will allow playgrounds, zoos, museums, and churches to reopen but will maintain travel restrictions and curbs on public life. Angela merkel said a broader easing of the countrys lockdown will be evaluated on wednesday, so they will look at it again, although they are doing much already. Joining us from berlin, the president of the diw German Institute for research. What is thee opposite of lockdown . The reopening of the German Economy . How is it going so far and do you think we need to do more . Course, there are heated on a controversial debates in germany. Some would like to do it faster. The big push from companies and employee associations. There is quite a bit of political disagreements among the governors. Germany has a very federal structure so decisions about most of the opening of measures are taken at the local level, but what seems to be prevailing is the view it is better to be too cautious than two quick and the provision of chancellor merkel, she is pushing to say take it slowly. We dont want a second wave. That would be the worst of all cases, so i think there is a big struggle in the background, but so far anna do you see a tension between the economics of this and the humanity, i suppose, of the policies to save lives . It seems distasteful to talk about and some go so far as to say there is a tradeoff between the two. How is that tradeoff being played out in a german context . Marcel i think there is a tradeoff and it is partly a false tradeoff because people understand if you have a second lockdown, because there is too quick and opening up, that would be devastating for the economy, as well. I think the trade is overplayed but the issue now is more people are getting fed up. It is about social rights. It is about citizens rights. Are you allowed to go out, are you allowed to mingle . People want their lives back. This is the big question. Can the German Government continue to have big support for the lockdown or partial lockdown measures . Showr, most of the surveys 80 of german citizens believe the measures that have been taken so far have been the right ones, so i think the big struggle will be to convince citizens that this is the right thing to do and if people become reckless, then the risk of an increase in infections and a second lockdown is big, so this is really the dividing line. Unlikely, as germans are typically pretty good at following rules. It is almost the national pastime, following the rules here. Let me ask what you think about the economic recovery here in germany. How do you think the german bailout packages, the german aid packages have done in bridging the gaps and helping to hold down the inequality that has been so problematic politically here . The German Government has enacted one of the biggest stimulus or stabilizing program in this first phase of the almost 30 han of gdp has been offered in mostly credit guarantees but in terms of financial. The German Government has acted really strongly. Most of the measures are there to help companies, to prevent them from becoming insolvent. There has been quite a bit of expenditure on shortterm work schemes. Fairly successful so far. Unemployment has increased, but most workers have gone into parttime work and shortterm work. You70 of their income, but are absolutely right. Like anywhere else, people suffering the most are people with low income. We see education in schools and Day Care Centers are closed. Increasingly, there is an educational divide. Women are harshly affected, partly because of the slowdown of schools, the ones who have reduced working hours, so we see the social divisions in many, many areas, but i think now, the big problem for the government is to prioritize. Government can spend a lot and the question in the face of the easing of the lockdown measures will be which companies to help, how to allocate money among citizens . I think families are one dimension that is still forgotten with both parents working from home, the kids being at home is really tearing families apart, so there are many difficult questions the government has to decide where to prioritize. Ask aboutreason i income inequality here is it seems to always give fuel to the , the extrememes left in germany has been strong for a long time. The extreme right has been strong very recently. Are you concerned that on the other side of this, we get a big upswing for voters, although the majority of germans are happy with merkels handling of this . A big upswing of the voters for the other parties . Marcel so far what we have been seeing in germanys loss in support for the extreme rightwing party. They have been losing. Partythe governing that has been gaining. Angela merkels party is back to 36, 37 in the polls. They had been low as 26 year ago. The support and Approval Rating of the government is very high, but the big question is will it stay that way . That really depends on how the recovery is going. If the government is keeping things closed, shops, schools, Day Care Centers closed to long and they lose the support, that could be dangerous. I think it is a wideopen question whether the government, in particular merkels party can gain from this. We will have federal elections for chancellor asked year september, next year september, so this runup into the election, i expect there to be quite a bit of handling haggling and trying to capitalize for winning the election. Matt we will talk a little more with you on the other side of this break. Marcel fratzscher, president of the diw institute. Hes also held many hats andsing people in Germany Europe at the European Central bank, for example. He was the head of International Policy analysis, so important to hear more. Right now, the first word news, the top stories from the terminal. In the u. S. , President Donald Trump is raising the expected death toll. He thinks as many as 100,000 americans could die from covid19. It is also promising a conclusive report on the chinese origins of the pandemic. Thats after comments from both the president and his secretary mpeo that the po virus targeting a chinese lab. President trump also said he wont pass further stimulus measures unless they include a payroll tax cut. Hes been advocating for that move for weeks. Opposed by most congressional democrats. It is also not clear how much support it has among republicans. He made the comments during a virtual town hall event hosted by fox news. Ireland is moving closer to forming a new government. The green party has agreed to enter formal talks with the countrys two traditional major parties. The two rivals agreed to try to form a government last month. The Third Coalition member for a parliamentary majority is needed. North and south korea have exchanged fire in the dmz for the first time in years. A guards seoul says tower was fired on several times which was followed by shots and a warning. Prompteduns absence global speculation about his health. 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. Anna coming up, the rise of state aid. Lufthansa said the government state aid package will be soon. Forirness in the markets years, say some. He will discuss help coming to the debate aviation sector next. This is bloomberg. Anna love back to the European Market open. , over 15across europe minutes until the start of the European Equity trade and it looks like we will be weighted down about geopolitics between the u. S. And china. U. S. Futures also point out between. 4 and. 6 for the major markets. Air france has won eu approval for a 7 billion euro, being one of the First Airlines to secure state funding. Expects finalized talks with the German Government on a package soon, according to a letter sent to employees. Ryanairs Ceo Michael Oleary has railed against it, saying it will skew the industry for years to come. Lufthansas, the air frances, the junkies. I thought we would emerge out of fewer airlines, now we will reemerge with airlines receiving massive unfaires to be against us. Anna that was Michael Oleary on friday. Marcel fratzscher of the diw institute is with us. That, do you see a very direct link between the employedthe countries in running their public finances before this crisis and their ability to respond . Hear that from politicians in various parts of europe that we were careful in the years before this and now we should put this money to bed. Is that an accurate depiction of what is going on here . Marcel marcel i think partly yes, partly no end in germany, you heard it was important we run a fiscal surplus for six or seven years going in germany, which is why they can spend so much. I think that argument is exaggerated. I think it is not the quantity, but the quality you spend. In germany, we have a massive investment gap with infrastructure for Renewable Energies and education and innovation, swiping derisk some truth but you see big differences. Ec italy and spain having relatively high public debt to gdp and not being nickel to spend as much to help their economies compared to germany or many of the Northern European countries can, so there is some truth to it, but it is exaggerated. Matt will this make germany change those things . Im noticing that all of the stores i can now go to and restaurants where i can only get takeout par, for the most part, accepting cash, which is interesting because im wearing gloves and a mask. Were is a plastic barrier, are two meters apart and now i am handing them these bills i sneezed on and wiped my nose with rather than using additional transaction, which would make more sense a digital transaction, which would make more sense. Marcel things are changing slowly and you rightly say germany in terms of digital money and cashless payments, germany is quite far behind in the other European Countries, but things are changing. Things are modernizing and i think people realize this crisis is also an opportunity to change things and one of the big debates we have currently in germany is, should the big fiscal stimulus be used to help transform the German Economy to become more modern, in environmentally more friendly . Should the government push the Car Manufacturers . Should push the airlines, the funds are you talked about lufthansa you talked about, the big cash injection given to lufthansa probably, is it thinking about improving, modernizing Environmental Standards . That is a struggle we currently have and im not sure what will win at the end of the day, but there is increasing pressure the government use it steep pockets it has its deep pockets it has, but this is the battleground wishy. About countries like italy. The fiscal responsibility of that country historically has been spotty. That is one of the reasons the germans dont really support shared debt. Can the italians be fiscally responsible . Is that possible . Marcel i think they have been. I think we need to put things in perspective. High level of a debt to gdp, but the question is why the position . The government balance before italys payments come youll see italy has had fiscal primary services for the past 20 years with a few exceptions. The problem in italy is not the fiscal spending, per se. It is really the lack of growth and lack of Institutional Reforms we have been seeing in think the argument is exaggerated and i think this crisis is not the right time now to argue about reforms. Simplye knows italy had bad luck in this crisis in being the first country hit by the virus, therefore suffering a lot more strongly, being a lot more affected. When we talk about fiscal policy, i think what we need to understand is that we dont have national economies. We have one big european economy and germany is highly dependent on exporting its product to the rest of europe. It is highly dependent on receiving inputs. The auto sector from italy and spain and other countries. We need more of a common fiscal response to the crisis in europe and that is one of the big mistakes europe has been making. Countries have been using national approaches to this crisis and we could see an increase in economic convergence. Anna have been seeing a pan european approach from the ecb. They reduced the cost of loans to banks, tltros in the last days. Banks are going to be able to step up and spend what is necessary . Marcel in some countries, some banks will be able to do that, but particularly in germany and the countries that are stronger, but i think we should not underestimate that in countries again, i come to italy but greece,ce, huge affected because of its tourism, we might not see banks being able to do so because we still have had banking problems in the euro area and in the European Union as a whole. This is a consolidation of the Banking Sector in europe. It has not been completed. Banks started building up more tier one capital, but many banks are in a difficult spot and i fear that the worst that could happen is this real economic crisis could trigg er a banking crisis and the ecb is trying to prevent that from happening in making it easier for banks to get accessed to liquidity and rewarding them with negative Interest Rates if they give out loans to small to mediumsized companies. The ecb is really doing what it can. What im really lacking in that picture is the more decisive response by governments in particular on the reconstruction plan to help the weakest European Countries in particular to rebuild their economies starting right now. I think that is the missing link we have currently. Not the ecb, but the common european response. Matt if anything, if we are looking for a silver lining, we have the opportunity to make a lot of changes in this crisis. Thanks so much for joining us. Marcel fratzscher, president of diw institute here in berlin. Coming up, the oracle of omaha strikes a cautious tone. That is Warren Buffett, speaking to an empty arena during a webcast of Berkshire Hathaway hathaways annual shareholder meeting. We will get your stocks to watch and highlights from the stage next. This is bloomberg. Anna welcome back to the European Market open. European equity futures suggested weaker at the start of trading five minutes. With Warren Buffett, treading a more careful path than last time around. The famed investor fielded questions over the weekend from shareholders at his annual meeting. Dani burger has been looking at the details. What kind of tone did we get from Warren Buffett . Dani comforting tone from buffet. And actions somewhat different. He held on to 173 billion cash pile saying because of the feds actions, there were less deals to take. Penny scott liquidity from the fed so they didnt need to turn to investors like buffet. He sold his stakes in four major airlines, saying the industry has fundamentally changed. Matt thanks very much. A quick one, but we will come back to you a little later in the program. Dani burger with a little bit of the news of what came out of the Berkshire Hathaway shareholder meeting. Coming up, the market open, less than five minutes four minutes to go. Futures are down. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. A minute to go. Get to your headlines. Knockdown easing begins. Uropean leaders start to lift restrictions as the death toll drops. Regions is from the throughout this hour. Stopped for ments fresh political. President trump promises the allegations ing that the coronavirus began in a wuhan lab. Warren buffett explains why he hasnt put his record cash pile work as companies clamber lets take a look at futures. Theyre going to be much worse on the continent than they are in london. Of course, london was trading on may 1st well, what is a holiday for most of so we were all ftse here while the dropped, and as a result, europe is playing a little bit of catchup now with the ftse. Ets look at the live open right now. The ftse coming out of the gate of 1 . T only one or. 2 thats where futures turned green before the open. See the euro stock 600 there down 1 percent. Move lower as the continental indexes start to open up and theyll much lower as well. 2. 5 percent youll cac similar numbers when the open upz. Then the dax opens up. Usually last. Their system takes a lot longer equity up than the indexes. Youre going to see 2 drops and across europe, and then ftse going to see the possibly swing between gains and we saw with as utures. Stocks opening broadly, though. A little catchup being played mentioned, matt. While preparing to gradually ease their lockdown against of s of a second wave infections and a steady stream of bad economic data. Peaking of that bad economic data, were getting news coming through from the french labor 11 million ing that people are registered for unemployment, so that is in france. Registering ople for unemployment. That sounds like a substantial unemployment rates in a country such as france. Xheef economist g plus economics. Getting dually confirmation of the dire Economic Situation that many economies in the world are in. The jobs data out of the u. S. On friday. Well have a peek at this little glimpse of whats going on in million th this 11 unemployment number. We knew these numbers were going o be bad because politicians have intentionally shut down economies. What are you going to be taking rom all of this dire unemployment data were going to the days ahead . Lora march and april of 2020 were exceptional in the historic economic pain the world is in. When we look at Business Investment or Consumer Spending frequency the high data, like new startup formation, its clear that Economic Activity in major developed economies was down 30 to 40 in the last six eeks, and thats just unprecedented. Its like a depression era shock a few weeks. His is i think this is a great question. I know some of the markets are given the events that were seeing a decoupling between the level of pain the new economy indicators and the bounceback a t is primed in terms of financial revaluation after the initial deep shock between the february and late march. Reduce the level of a wth forecast that have nonbank financial space back in late february. That has partly what led the markets to the risk. Thing, of course, is while april economic figures are extremely bad, what going to see y here is the bottom of the coronavirus shock. Put this in perspective with the european pmi system, we the growth contracted somewhere in the range of 5 , and thats just at the back of lockdown. Of the april is going to see a some 20 to 50 . Its unprecedented. Easing the lockdown will see some. Aybe a month extension to some 10 . Thats an extremely low level. The average s with 15 . Mewhere 5 or thats what the president unprecedentedarde unpreetable. Data. Start to get the you mentioned that pmi data play coming throughout this hour. Back to that, certainly. You can add on top of that a growing level of geopolitical u. S. And tween the china. Latestyou weigh up those comments from President Trump and through what lens should we ook at those as market strategists . Think what this posed for the political mood thats coming isough is that china bashing a big theme of preelection campaign in the u. S. This was always going to be the case, but, of course, Coronavirus Crisis has brought a dimension to that. A pandemic like anything else. There is not going to be in links, so that unprecedented destruction to models, to global key global trade e its clear that this is much more promoted since the were notcession, and going to be looking anything ine a normal typical economy the months ahead. Very much inything world inionship of the a greater trademarker, and thats the u. S. I think this is a parallel of remain with the market and suggests that so weeks. In the last few clearly here again . Matt were going to talk more with you, lena. G plus onomist at economics. She stays with us. Were going to talk about europe next. E get a reading on factory activity across the region today. Followe pmis that we see asia and fall to historic lows . Thesech does it matter to markets that are expecting the worst anyway . Discuss. This is bloomberg. Discuss. This is bloomberg. Welcome back to the European Market open. Equity markets just some 12 minutes or so into the european trading day, and european equities were expected weaker at the start of trading. Ftse they are, but the 100 better than others. Friday, when on others were closed. We see sustained weakness into the u. S. Session. 6 . Down well get a health check on europes economy as the latest anufacturing pmi data is released. Thats after factory output cross several Asian Countries slumped to record lows in april. Lena, chief economist at g plus is still with us at the time us away what is appropriate versus not appropriate . Scale of the economic shock is unprecedented of the Global Financial crisis and the euro risk , and theres a real that while markets are looking to the lockdown of the beginning economic pain,he the realities that we are in the midst of a credit crisis, and a uggests a long lengthy financial risk as we look through corporate downgrades and defaults and debt estructuring through realized bank losses. That suggests an ongoing level economic financial and also policy uncertainty. Prove in all likelihood contractary womens lockdown and the during the uncertainty and business and consumer risk aversion. Are the issuese, of the sustainability in europe thats gone back on the table through the dislocation in and bank markets in particular, of course. Spreads. Redit that reinjekct az level of uncertainty. He ecb that mandate is simply not a match to does this mean for a recovery, lena, in europe . If you are do earish european recovery prospects versus u. S. Recovery prospects . How do you trade that . With respect to the the y risk, if we look to unprecedented level of activism global double digit contraction, i think its clear hat the policy challenge will, if anything, increase because if hard, ckdown is more ending the lockdown is harder. Path towards a Global Economy both in the u. S. And urope, through a continued period of financial fragility as he recessionary credit downgrades are realized. While all of that while fragile global health, that situation does suggest a significant level margin of nificant policy error ahead. Of a s also the issue i ewed financial shock, as mentioned. Already trimmed the tail risk of a deep and extended recession bounceback in stock markets. Hose are a significant risk of relapse as markets realize the second half of this year will ot, in fact, see a significant decline in that growth earning we are , and that means really many quarters ahead away normal, if urn to a you like. The past Economic Sustainability from here is far from clear, and that tells us is, well, two things. E are going to remain in a regime of monetary dominance. That means Central Banks will active in terms of financial sks for to a ility translating what we need is active recovery and management, and ahead of the is game mention that the spanish april manufacturing pmis just crashed across the bloomberg. 30. 8. Obviously, 50 marks contraction from expansion, as we know. The forecast was for 34. Below the t far forecast, but still, i mean, thats not really the point, i suppose. He point is that the low numbers that were seeing here in the 30 range. Theve mentioned, i know, in past the inadequacies, i pmi measure of Economic Activity. Weve looked at the lack of focus on the Small Businesses or to get money to those Small Businesses that might make the difference lena absolutely. I think clearly your manufacturers are very sensitive sudden stop in global trade links, to the disruption finances,ows and bank he pmis arent giving us a full picture, and that picture will probably only really emerge the lockdowns end, after enterprises have actually are in a position to disability into the economic environment and into the outlook. What is also in play here, and probably Womens Network more concerning is that while we are a severe cyclical shock, erosion of arallel corporate Balance Sheets, which is, of course, not something can be captured by the pmis, but its something that ill very much determine the level of activity, employment demand, and also, of course, we level of sent cancellation of business, investment projects, and that ill feed into that longerterm hit of declining productivity. Hat when you start with the position of a high level of european economy, high levels of some ate leverage in parts, with high levels of bank through the decline in prof itability and the need absorb losses through capital ratios and that need for still lies that ahead, that level of economic pain that we saw back in the lobal financial crisis and the euro crisis, which is not realized yet because of the and then you realize that markets have to a agree the y understated both extent of the critics were seeing now, and also to the a snapback. We see i think theres a mantra here the string, g on the harder you pull a guitar string, the harder they all come back. His is not that kind of a scenario, and i think to the extent to which governments join management, olicy particularly with respect to real Balance Sheet support and real economies with respect to sme will be critical in how a ckly we get back to sustainable recovery matt were going to take a with break and keep you us. Lena, the chief economist at g plus economics. Talk t, were going to about a comparison of the crisis. Lena covered the ins and outs of the financial crisis. Fact, she was one of the very irst economists to talk about the impending credit crunch. That was way back in the 1st of 2007. Well ask her what she thinks about this financial crisis. This is bloomberg. About the impending credit crunch in june of 2007. Hat was long before a lot of eople figured out what was coming up. You were talking about the Balance Sheet risk transition from debt to equity markets. The fx carrier trade, et cetera. I wonder what you think about this. Ou know, at first everyone thought vshaped recovery. Now people are saying ushaped recovery. Mantra all along has been this is a health crisis. This is not a financial crisis. Do you expect this to turn into cascading bankruptcies, real credit issues a financial crisis . Lena i think so. It is clear that the great repricing that took place towards the end of february and the end of march was really the leg of a major deleveraging crisis that was the collapse of the infinity trade. Systemic that targeting strategist that had correlationsnd had in the arkets fragility sense that there was falling portfolios in t everything rally. Of that everything rally, course, regime collapsed through he recessionary shock of the coronavirus pandemic. We have a global contraction with a significant loss of private sector debt levels are, if anything, that bridge h support that government Central Banks have instituted through the lockdown. Suggests that the big sort of wave of downgrades, defaults, restructuring still lies ahead. To those with a Recession Risk its way through the system, the imf Global Financial stability report noted that something north of 60 of that is now atne risk. Biforation thata were seeing in the credit arkets through much of the liquidity support thats really getting towards companies that access to Capital Markets thank you very much for your thoughts. Lena, chief economist. To ext, as europe starts reopen, could manufacturing be getting back on the way . To seth van king winkelman, and thats coming up next about luxury too, of course. This is bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. European back to the market open. Lets look at where we are equity he European Markets. A massive monday selloff, but a lot of that is catchup for what many of the markets that were friday missed out on whilest u. S. Equity markets and the ftse 100 are busy selling on friday. We saw many markets around europe were closed, and there is catchup to go there. It says that the sectors that we have seen, of course, europe in exposed around some of the cyclical names, and that case in the the markets on friday. And into the u. S. We saw cyclical names under pressure, market that is heavily reliant on cyclical names, matt, impact ound to see there. Matt . Matt lets get to bloomberg first word news right now. From the p stories terminal. In the u. S. President donald trump is raising the expected death toll. 100,000 s as many as americans could die from covid19. He is promise aing conclude si chinese origins of pandemic, where. Thats after statements that the a chinese lab. N they should continue to do that, and verify so that we are certain. A an tell you that there is significant amount of evidence that this came from that wuhan . Ory in thats in isnt set to if employees need to use face masks and how public transport a number of d, but other countries are discussing it. Rance just came out and said may 11th its going to happen. Ireland is moving closer to government. W the green party has agreed to enter formal talks with the countrys two traditional major parties. Rivals agreed to try and form a government last month, need a Third Coalition member for a parliamentary authority. Air and quick on take by bloomberg powered by more than 2,700 journalists and in more than 120 countries. Nna anna matt, lets talk about europe. Oing on in as we talked about a number of we are seeing lockdown well get uptodate very shortly with our colleague whats going on in spain and other parts of the european couldnt independents. Well talk about that next. This is bloomberg. Matt first day back. Welcome back to the european open. 36 minutes into the trading day, and were looking 3 on continental equity indexes. The ftse down only. 3 , but, of it fell more than 2 on friday while the rest were closed. Of pe playing a little bit catchup to the down side today. I want to give you the Bloomberg Business flash. Top corporate stories terminal. Bloomberg Berkshire Hathaway has not struck any mega deals during the volatility. T this crisis is different, and hats the reason according to buffett. The company says it hasnt found to make ctive deals with its record 137 billion buffett , and warren says the fed stepped in, and that drove all opportunities of the realm of attractivity. Comments at his annual shareholder meeting, which was held by web cast this year. Lufthansa expects to reach a deal on government aid soon. A letter ording to that the company sent to employees. The help would be a decisive airlines cure the future. It would also make it unlikely the carrier would need court protection. The company says aid is important to help flights resume possible. Feesabasibly west pack is deferring its dividend as profits plunge to a low, and bad loan provisions soar. It also faced a potential antimoney laundering fine. Its considering selling some of units, including its wealth and insurance operations. This is the most difficult result theyve seen in many years. Business ur bloomberg flash. Now, luxury carmaker bugati is its factory today. Thats as european nations the ly begin to roll back harshest measures after two months of lockdown. The Auto Industry has been especially hard hit by the crisis, which forced factory crippled sales in key markets from china to the u. S. Womens network as factories graed wally begin to ramp back up again, Consumer Behavior amid shaky rtain confidence and concerns that tightened s could be again in the event of a second wave of infections. Unlikely to affect the kind of people who buy a car like this. Were talking about million bugattis, and here to today with us his reopening in france is stephon winkelman. This you for joining us morning. Talk to me, first, about your first day back. Changing . Whats going to be different at factory after the to before theared crisis . Stephen we are starting slowly. Verybody is Wearing Masks. Cars, of a lot of your course, are hand crafted. They are a lot of the parts that in these cars are specifically made for the kyrone, but i assume you have or electronics that are coming from asia. Which regions are reasonable doubt thattest to access right now, stephan . Say that we i would always being a small car to facturer, we always had decide between make or buy, so you said, r sure, as important suppliers, and mostly coming out of europe, one of our most important ones are the ones in italy, and one of now, italy was in countries that was hit the worst possible way and, therefore, we had to wait pretty long. That all of them back at work. Talking about ly this, because we are constantly monitoring this constantly monitoring the supply chain. In ermz it of the production process, then, you suggest that Wearing Masks and hand sanitizer, but are you having to change your expectations for production . Longer ing to take you to produce cars . In there be fewer cars production . Production . Going ont think this is to affect the capacity of our production. Todo not think this is going change anything matt what about new products, stephan . More s going to make it difficult . I know youve got the divo out or coming out, which is a limited edition of the kyron. I believe there are only going made. 40 i believe theyre all sold already. What about the development of new products . For example, could there be a bugatti . R what we wanted to present at the motor show, hich, unfortunately, was canceled, was one of the kyrone, which he of weight, on handling behavior, more down force. All to increase the drivability this dy roads of particular car. Unfortunately, we have not had the opportunity to present this live. Did it via video, and its geared that from now on all of weeks,tos in the last six we were working from home constantly revidzing our scenarios. One of the things, which is to us, is that we dont now how this is going to continue. Our dealers or our partners are up, we think, almost all within the month of and i hope that by june, july we know a bit more about the market is going to respond to our type of car. Very difficult. We have to see, and, therefore, on different scenarios getting what about funding from volkswagen to develop new products . In contact with gesh either . Do you feel like the company is tighten up its purse strings, or is bugatti going to remain a priority . Stephan the top priority is this is for every branch of the group. Therefore, yes, there is a tight not, but this is for every branch. They are the same, so there is between us and the other branch . Matt what about staying in touch with customers . You typically know all of, you bugattis customers personally. Are you able to say in touch them through this crisis . Stephan yes, but we didnt want to disturb our customers if no need, so we have them, and th part of our partners with dealers, and then in this month, o then in the month of may, we ill have a closer look into everybody anna stephan winkelman, joining us. R talking to us about the reopening of the production facilities. Talking a bit about difficulties in dealing from italy there. Italy is preparing to gradually as the nation ay reports the fewest deaths since the lockdown began. Get the latest next. Welcome back. The European Market open. The European Equity markets on back. The ftse 100 actually managing to get up into positive territory. Course, other markets around europe much weaker, but many were closed on friday. Minutes into the trading day. Energy giant chevron says it bailouts for ment Oil Companies that havent prepared themselves for the crisis. G the slump has hit oildependent economies and led to an nprecedented shutdown in u. S. Shale. The u. S. Mike werth spoke with us earlier. Coming from w california its in our flexible short would ctivity so, that include unconventionals here in the United States and elsewhere portfolio. We have some other projects here we can slow down activity and focus on Critical Path and reduced spend on some things on the Critical Path. There are reductions across our portfolio, but the primary will be in the shale and tight, ncluding in the Permian Basin give me visibility then on how quickly youll reduce rigs and reduction there, and then does to your underlying Production Base sure. 17 rigs the year with running in the permian. Down to five right now. Roduction tends to lag rig activity, and so what were eeing is there are likely to be some production curtailments there. Logistics and economic reasons, in other parts of our ortfolio, were also likely to curtail production. Well see production here in the month of may down probably 200,000 to 300,000 barrels of and quivalent per day, june, same range or perhaps omens network a little bit greater than that do you have a sense of how allocate your cuts . Certainly our capital driven by our own views on where the opportunities are. We have a lot of the short cycle capital in our budget. Thats one of our advantages. I mentioned were different. The me into this with strongest Balance Sheet in the industry. A very low breakWomens Network capital y flexible budget. Were in control of those choices, and the market signal more now isnt calling for nearterm productions, so thats why it makes sense to reduce short cycle part in ur portfolio, and were control of that. The opec actions affect flowing to the as opposed investment of capital produced barrels into the future. Primarily in hat our short cycle activity for that production both for then owing production and the short cycle, how quickly can that come back. Do you anticipate permanentance . Well, it can come back relatively quickly. These are things that we actually do for aintenance purposes, we bring wells down and facilities down for storms, hurricanes, things our people are very good at bringing production then ramping it back up. Well koonl back up in a matter of weeks when we start to see the market signals that would it, and this can be done that is very careful to doesnt cause damage wells or reservoirs that was the ceo of chevron talking to alex steele. Now, after a twomonth lockdown, roll back some of its measures today. More than 4 million workers are return to manufacturing and construction. Yesterday italy reported the daily deaths in two months. Other governments across europe gradually restarting normalish lives. In germany schools will reopen today while bigger steps will be considered on wednesday. Easing what is regarded as europes strictest allowing people out to exercise. Probably not for more than one hour or one kilometre away from houses. Joining us now from brussels is maria tudeo. Economy ly can the europe coming back . Maria it does look like we are having technical issues there brussels. In well try and get her on. Shell be on later on in the day part. Lets take a look at some of the now. R stocks moving right were about an hour into the trade day of trade. Were almost finished with this program, so watch for more of maria in surveillance. I can tell you that as far as going on in markets, were seeing air france drop morning, although brussels approved the, i think, 7 billion euros of guarantees and loans from the french government to Airline Air France alm. We see an Womens Network bigger daimler. R at took off right now and 17 this morning, which is one of the big reasons that the dax a big hit as opposed equity indexes. Falling hard on big volume as elevator unit buyers are seeking funding help. Trouble getting rid of that asset where, at least according to a report. Dax down 2. 8 . E he cac down Womens Network ore sharply there. A shortstop contrast to the rest of europe. Reflecting on the numbers of friday. Any of the European Markets were closed. Looking ahead, u. S. Futures do point downward still. We have had some pretty dire pmi numbers coming through some of the european economies so far. This is bloomberg. Italy reports the fewest deaths since lockdown. Well get a view from the ssociation of italian business about the path forward. President trump sees the u. S. 100,000. Ll rising to the u. S. Secretary of state says there is evidence that in a wuhan began lab. Global markets sink. Riskoff returns as investors infections wave of and a steady stream of bad om