Ready and waiting. Jerome powell says the fed is willing to use all weapons to combat the coronavirus downturn. Philip lane says the ecb is prepared to boost bond buying. Andrew bailey testifies in front of lawmakers today. A lot of centralbank action. Global coronavirus cases near 5 million, as one report throws cold water on modernas vaccine testing. That is what drove stocks lower yesterday and now we see futures down here, up in the u. S. And asia, say mixed picture. J. P. Morgan joins a Goldman Sachs in saying that further quantitative easing is needed to cap bond yields. The u. S. Is so strong a billion dollars of 20 year treasuries today and it looks like a lot more supply is getting mopped up by the central bank. An hour away from the start of cash equity trading in europe. Take a look at the picture here. Arrowslooking at all red in terms of futures, euro stoxx, ftse futures and dax futures are down. If you take a look at the u. S. Futures picture after the downturn yesterday, you will see green arrows, as the s p, dow jones, nasdaq futures traded up about 0. 5 . Different reactions i suppose to that moderna report around the virus or lack of detail in that report. Lets get some breaking news. We have headlines coming through from rollsroyce in the u. K. Least 9000loss of at jobs. They are proposing a major reorganization. The headwinds that currently are being faced by anybody attached to the Civil Aviation cycle. This certainly the case with rollsroyce. They are talking about the loss of 9000 jobs. The cost will likely be about 800 Million Pounds, they say. Headcount contributed about 7 Million Pounds in savings. Expected to save 1. 3 billion pounds. What iskeep an eye on going on with rollsroyce at the start of trading. Matt has goneind, through the different outlooks we are seeing in the various futures. This is what we see in the gmm. A mixed picture coming through in asia, india and japan trade higher. We see the new zealander dollar moving higher as the Central Bank Governor in new zealand in an interview with bloomberg talked about how he does not want to see negative Interest Rates. We see some readjustment. We also see readjustment in the fixed income market in new zealand. Broadly speaking, we are mixed across the asian session. Moderna headlines around the vaccine or lack of data to prove the efficacy. Ongoing geopolitical tensions and powell testifying, all of that in the mix for investors this morning. Matt absolutely, so a lot going on. Lets get the bloomberg first word news for you. Powell,chairman, jerome dodged efforts to get him to take a side in the debate over stimulus. He testified at a virtually hearing of the Senate Banking committee and reiterated his stance that more fiscal support may be needed but stopped short of calling for it immediately, saying he was reluctant to talk timing or specifics. It is a very political issue in washington. Brexit talks have soured, with the u. K. s chief negotiator accusing the eu of only offering a low quality deal. Isid frost says the bloc treating britain as unworthy of a freetrade agreement. Michel barnier says britain wants to keep the benefit of being a member state without the obligations. Moderna tumbled yesterday after hitting an alltime high. A healthfter publication highlighted the preliminary nature of the data surrounding its potential coronavirus vaccine. The journal also cited the lack of a press release from the u. S. Officials, who partnered with moderna on the trials. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna . Anna lets talk about these markets a little bit more this morning. It took 33 days for stocks to drop 34 , and then just three weeks to gain half of the back. Investors have been thankful for a dose of calm in recent sessions but signs are emerging the lull may not last. Simon flynn joins us. Perhaps you see some clues and volatility that might lie ahead in emerging markets. Even if we have seen some example, the, for s p in recent days. If you look at the options market, there seems to be some thationing saying investors are bracing themselves for more volatility. Do you see volatility had . I had ahead . Yes, i that investors are bracing themselves for more volatility. Do. The phenomenon you are talking about with respect to options is very important. You have a very low put to call ratio. That means investors are not taking out much protection against risks. That is particularly true of very small investors. These guys are often contrarian indicators. Particularly against the bark round of poor fundamentals and background of poor fundamentals and high stock prices. Matt what do you think the biggest movers are right now . Is it a vaccine . Is it stimulus . Is it reopenings . How do you see the biggest winds blowing for stockmarkets . I think at the moment, the most critical thing is the appearance of a vaccine . If we had certainty in that respect, then we could be reassured that at some point, ones that vaccine is widely available, we can all go back to our normal lives and there will not be a permanent shot to the economy. I think that is extremely important. You are also right that it is y important, the policy is that policy is essentially created near zero riskfree rates. Despite what i just said about stock prices, if you are it against holding a 10 year treasury in the u. S. , that 10 year treasury has exceptionally low return so its very unappealing. Anna going back to normal life, simon. I almost forgot what that looks like. Let me ask you about the emerging markets versus developed markets. Emerging markets being your bag. You assessed of economies may lag in a postcrisis recovery. If you assume we are heading for one, why do suggest that . Yes, it is quite interesting. Is that all, the theory the wellinformed and relatively wealthy population can choose to afford to socially distant, if you like, in response to a second wave of the covid virus. There are a couple pieces of evidence thats true. First of all, both korea and taiwan reacted this way. Even before the government january, up back in people were socially distancing in korea and taiwan. The second piece of evidence, most recently, if you look at the google mobility data, there are signs that the koreans have increased social distancing since may 7, which is when we had the commencement of the kind ini second wave. I think developed economies could have a bumpier recovery. Matt thank you for joining us. You can reach out to us or to the mliv team with any comments. Coming up, the ecb may be finally getting what it long called for. Governments coming to rescue with stimulus and doing it together. Thats the key, thats next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are still just over 45 minutes away from the start of cash equities trading. We are looking at futures pointing lower here in europe. They are higher for the u. S. Trade this morning. But of course, we have a lot of time and volatility probably between us and the star of wall street. Lets get the Bloomberg Business flash. These are two greats top corporate stories. Yesterdayares surged after the company signed a deal with the comedian and Television Host joe broken, gaining Joe Rogan Joe rogan, gaining exclusive rights to his very popular podcast. It is a coup for spotify. Rogans show regularly ranks at the top of apples charts. Facebook is limiting offices to 25 occupancy. It requires temperature checks and masks when it lets employees back into the building in july. The social Media Company outlined the plans to staff. It will create six put spaces between workstations. We used to call those offices. Citigroups chief executive says take friday off and thanks for the hard work. In a memo to staff, he acknowledged that many have been juggling work, home schooling children and taking care of family members. He says please take the day off and relax. Of itsid roughly 80 staff is working from home last month. That is your Bloomberg Business flash. Nejra thats a nice story. Lets talk about the ecb. The ecb may finally be getting what it has long called for. That is governments coming to the rescue with stimulus. The proposal by french and german leaders for a 500 billion euro package is seen as a significant step towards a common fiscal policy in the union. The plan must be supported by all 27 members. The ecb stays alone on the front line. From the plane says the centric philip lane says the central bank is fully extended to extended emergency Bond Buying Program. We are joined by samy chaar from bank lombard odier. Dirty Emmanuel Macron today save the euro, you think did they save the euro, you think . Samy they are giving a very important additional tool to the eurozone and european union, which is the fact that you can do fiscal transfer. Oneoff that they are proposing. We can imagine that in future crisis, whenever they come, they ine opened pandoras box allowing to tap into this new tool, which basically would allow transfers between nations it. Need it is extremely significant and kind of the missing piece of the european project. Matt this is essentially shared debt, right . The eu will be able to borrow this money. To ais the keystone federal transition . Not yes, it is, but it is a Permanent Transfer mechanism. Again, it is a oneoff for this recovery fund. Scheme alayet in a the United States of america. When faced with economic difficulty, you can engineer this fiscal transfer. For once, the funds are not allocated function of the size of a countrys gdp in the european union. They will be allocated to the country that needs the most because they have suffered the biggest economic damage. That is new in the making for european countries. Nejra i suppose we dont know much in the way of details, do we, about how the allocation will happen . We look forward to those details. Ask you about the trajectory for recovery. What are the points in time youre looking at for significant upticks for the eurozone economy as we recover from . Samy what was absolutely key was the ability to contain the damage in time. For now, it seems we have kind of succeeded in limiting the damage to the first half of this year. Very clearly from now on, we might have seen the worst and it is all about now focusing on the so the second half of the year and 2021 will be all about the recovery process. There is always the risk of being hit by a second wave, we know that. Hopefully, we have the tools to avoid the second wave being so disruptive. Basically, the recovery starts now and that is a very positive signal. We know that the problem is that the recovery will be difficult and uneven. The fact that now the recovery is starting his very positive news. Matt do you think that the ecb has done all it needs to do . Samy mostly, frankly, the ecb has been a very significant contributor to the response to the shark. They did a lot. They can still do more. The pandemic Emergency Preparedness program probably has to be increased at some point. It is significant already when compared to the fed already. When compared to the fed, it is not that impressive. It might have to be increased down the road. Up to now, what the ecb has done is extremely significant. Kept the issuey well contained. A lot was expected on the fiscal front. Sovereign nations had done a bit. We were having high hopes for a common european answer and it seems to be happening. That will allow also the ecb to be more comfortable in the way it drives its monetary policy. Nejra thanks very much. Stay with us. Samy chaar, chief economist at bank lombard odier, stays with us. What about the stimulus story in the United States . Further stimulus may be needed. Jay powell starches the debate on specifics dodges the debate specifics. This is bloomberg. What congress has done to date has been remarkably timely and forceful. There is scenarios within main street where we could lose all of our capital and we are prepared to do that. I wanted to call out the risk of longerterm damage to the economy. There is the risk of permanent damage and as ive said before, we are conscious of the health issues. It is all about the Service Sector and in particular, those parts of the Service Sector that are, where there are lots of in person contact. We do intend to send anybody back to work without the protections. I was prepared to go today. I thought it was safe to testify. Is it enough . We need to be prepared to act further and i would say we are if the need is there. Matt that was the fed chair, jerome powell, speaking, as well as treasury secretary steven mnuchin. Both of them testifying before the Senate Banking committee. Meanwhile, the treasury secretary plans to use all of the 500 billion dollars congress provided to help the economy. He would do this through direct lending and by backstopping fed programs. There have been a lot of complaints in the u. S. About stimulus that never arrives. Samy chaar, chief economist at bank lombard odier, is still with us. I wonder what you think about the debate, the current political hot topic washington, which is, his stimulus more important than reopening or vice versa is stimulus more important than reopening or vice versa . Samy first and foremost, this is a Public Health issue. If you want a strong and uninterrupted recovery, one where you dont have to shut everything down again down the road and get back to square one, you need to make sure that basically everything has been done on the sanitary front for a safe reopening. If it is the economy that matters, well, you need to be safe on the Public Health side. Hopefully there are tools. Better capacity is an important tool. To be fair, the americans are testing quite a lot from europeans as well. We are testing more than the south koreans now relative to the population. Thats an important tool to reopen with confidence. Clearly, if you have to shut the economy down again, you are back to square one, it makes no sense. Very clearly, the reopening has to be done in the safest way possible. Anna anna so do you [audio dro] both sides of the atlantic. Thats what you need right now and you dont actually need stimulus until the economy is on its way to reopening. Give us your thoughts on the timing of when a fiscal boost has its biggest impact. Samy i mean, basically you need both. You need to make sure you are able to contain the first wave of the epidemic. The first phase basically of this crisis is now behind. We are getting into the second phase, which is reopening process, recovery process, and hopefully without being struck by a disruptive second wave. A lot has to continue to be done on the testing site and well. Lly the front as when it comes to the fiscal and monetary response, it is a two step process. The first step is you have to prevent the liquidity crunch. Central banks have to provide liquidity. Governments have to compensate for the income gap. Basically, people who are going to be however, some companies are going to like business. It is up to government to offset the income shortfall. Once this is done and you have stabilized the situation and can reopen, this is indeed when a very important variable gets into play, which is Public Investment. We are in an environment where there is not a lot of private investment because of the uncertainty. So its very important that the public side is able to step in. Matt in some economies, there just is not a lot of private investment because of the culture. I wonder if you think certain countries are doing better than others, just briefly here . Capexfrankly, i see no cycle anywhere. Even before covid, we were running very low on u. S. Capex. Obviously, investment in europe is very well as very low as well, in the u. K. As well because of the uncertainty around brexit. There is an issue here. , the of investment is private investment. When you dont have it, better Public Investment the no investment. Matt absolutely. Thanks so much. Nejra thank you. Matt chief economist at bank lombard odier. We both thank you for joining us. Anna . Anna yes, indeed. Unicredits german arm is playing a big role in facilitating government loans to german companies. We will talk about that with unicredit germany next. This is bloomberg. W . W . Uhiono anna welcome back to the European Market open. Half an hour to go until the start of cash equity trading. U. S. Futures dewpoint a little bit higher. Lets get to some of the stories we are watching for. Later today, the European Commission will unveil its spring package. This will lay out recommendations for Member States taking virus impact into account. The bank of england governor will testify before the u. K. Parliamentary Treasury Committee about the economic fallout of the pandemic. No doubt he will be asked about negative Interest Rates. The u. S. Energy Information Administration will release its crude Oil Inventory report, an important gauge of demand in the market. Finally, at 7 00 p. M. U. K. Time, the fomc will publish the minutes of its april meeting, where it held steady on Interest Rates. But lets face it, it has done already. Some nine packages of support from the fed around coronavirus. Math . Matt all right, lets bring in another big interview, the ceo of bank of america. Consumer spending is picking up as government relief programs cushion the impact, Brian Monahan spoke with david westin. This is a Health Care Crisis. Theou are starting to see Health Care Crisis be mitigated, you are starting to see the economy start to recover and we can talk about that, but the approach to winning the war against the crisis for us has move. Customercentric we have been out there trying to make sure they have the credit and capital to make sure they make it through this activity in the Second Quarter. Things,loans and other we have helped them through, we helped our teammates by saying no layoffs. Then getting them safe and working from home. And we have helped our communities by contributions of 100 million for Financial Institutions 170 million already out. All that is offsetting the impacts of the current Second Quarter downdraft did. We dont see it much differently, it is just that we are seeing ourselves come out of this the other side. We have heard from the Federal Reserve and they have expressed some concern that there may be some threat to the overall system and specifically commercial real estate. Are you seeing some parts of the market that are particularly vulnerable on the credit side . Remember that the u. S. Economy is going to be tantamount on the activity of the consumer base. You always have to start there when you talk about the u. S. , so even though we have the bank of America Research team, which is , the realt the world question will be how the consumers behave. What we have seen since the low point in the first couple weeks of april in terms of everything, in terms of spending because of the stayathome edicts, in terms of their borrowing activity, in terms of the transfer of money, you saw all that fall to the lowest level. You suck travel and hotels. , youu have seen steadily are seeing their activity pick up in the states that are still under stayathome and you have seen the economy pickup quicker and those that are going back to work. Your to date, it is down a couple percent. The length of this is going to be how the consumers behave, given the high levels of unemployment published. When people get back to work, jobs coming back in. Together toorks feed the Consumer Behavior others,chair powell and the concern i have is have we change concerned behaviors as we look out across the next four or five or six quarters . Is maybe the key question. I know you already say about 4. 8 billion reserve credit, given the level of unemployment, which is quite stunning, you think that is going to be enough . We have granted about 1. 5 million payment deferrals. 35 or 40 , when you look at those consumers, what they see is leave aside the issue of where the money is coming from, you are seeing a higher balance in our account. That is because the stimulus between the enhanced unemployment, these measures taken by congress and by the fed have worked. Are not seeing the delinquencies in things rise. You have seen payment deferrals increase, but you are seeing them start to level off and come down in our book. We expect to see chargeoffs coming later on. Now withty is right this amount of downdraft and activity. The question is what would happen next and that is what we are all watching. Matt that was the ceo of bank. F america, Brian Moynihan unicredits ceo sounded an optimistic note even as the italian banks set aside 1. 2 5 billion euros amid bad loans during the coronavirus shut down. That number could quadruple by the year end in a worstcase scenario. Some have been issued through its german unit. To take a look at the situation is unicredits germany boss. Thank you so much for joining us. Let me ask first about your loan growth in the german unit. Have you been lending more during the pandemic or have you throttled it back . Good morning and thanks for having me on your show. Indeed, if you look at what is going on currently, then this is unprecedented. One has literally stopped the economyt of the german for one could say of the european economy. It is our job. We are there to help and support thecorporate clients to get needed liquidity. Already before the crisis, we had one of the largest promotional loans in the Private Banking sector on the ground. Processingwe are separate applications and trying to help the economy get the liquidity. Anna how much more are you lending . Any kind of figures around that . Good morning. As i said, we are out there to support these corporate clients here in germany across all industries. And across all sizes. Midcaps, the smaller ones across all industries. That is what we are currently doing. Tois the role of our bank stand close to the corporate clients and advise them. We have a sizable amount to corporate clients to facilitate the Current Situation. So, i suppose you dont want to get us a number. I still cant gauge if your answers have increased or if you have restricted lending, but i suppose we can move on. What is client activity like at the moment . Have you seen a turnaround . , given the Current Situation the economy is reopening stepbystep, but i think it is fair to say that it is too early to say what that all means for the clients come of the corporate scum of the economy, and also for the consumer sentiment. Still we see an increase in applications. Demand for the promotional loan business. I think it will take a while before we have a clue what is going on in the pandemic. Do you have much visibility around loanloss provisioning . If you dont have much visibility, what are the thoughts that are going through your head as to the way to establish, the way to calculate the size of the loan loss provision in cute q2 and q3 . Good point and thanks for the question. Our own research is predicting a 10 drop in german gdp. First quarter was still quite a good one. Given the january and february was still in good shape. Too early to predict what that means in concrete loanloss provisions. In the thirdal hit quarter of this year. Point, too early to say what it means in real numbers. Matt are there any sectors you would stay away from . , given thatgaged our franchise was already engaged with all these industries before the crisis. Given that the house bank is the first to contact. Also, there is no industry in which we in exclude currently and it would be the wrong signal and now refraining from certain industries. Michael, thank you very much for joining us. The deutschland ceo for unicredit. Thank you very much for bringing us your thoughts on the pandemic and how that is affecting business. When we come back, we will talk about what is going on in the u. K. The British Chamber of commerce says the majority of u. K. Companies are ready to reopen at least in part. For thoseies ahead who cant . We will speak to the bcc director general next. This is bloomberg. Anna taking the official cash rate negative into the future. That moved to the new Zealand Dollar overnight. It is a debate being had across the englishspeaking world with markets pricing and eventual move to subzero from the fed and the bank of england and those Market Expectations have been building over the last few weeks. The bank of england governor will be testifying in front of the Treasury Select Committee later on. Watches comments for thoughts about negative Interest Rates. We will bring that live at 2 30 p. M. London time. Most British Companies are ready to restart operations at least once restrictions are eased, but one in 10 said they would struggle main the because of social distancing guidelines. That is according to the British Chamber of commerce. We are joined by the director general of the British Chamber of commerce out of marshall, who joins us now adam marshall, who joins us now. How would you assess u. K. Businesses readiness to open . I notice a large proportion of your survey comes from businesses in the services sector, which i also feel get less in the conversation. Adam thats absolutely right. I think businesses are partially ready to reopen, but not completely. The good news is that the vast majority of them know about the u. K. Government guidance on theening and working in workplace. That is positive. Very often government guidance documents are not something businesses read in great detail, but in this case, they have. But only a small proportion of them do feel that they are able to fully restart their operations under these rules. Many businesses are trying to feel their way through and understand just how much of their operation they can bring back on stream. Thinki wonder why you they dont want to go back to work. Is it because of the regulations or because of a fear of the coronavirus . I think employers feel that their absolute priority is to keep their people safe in the workplace. There are some other issues at play. Public transport and access to. Ork place is a big issue child care and School Reopenings are also very important because so much of the working population is parents with children in Primary School age. These are all important factors that all contribute to employers ability to reopen in full. Then of course there are a number of sectors, such as hospitality, tourism, and nonessential retail that have to wait longer because they have not been permitted to reopen yet either. Anna when we last talked, adam, you mentioned changes you want to see to the furlough scheme to avoid a cliff edge for u. K. Businesses reliant on that. After we spoke, that is indeed what you saw. What changes do still need to happen to the furlough scheme or how do you wanted to be managed out of existence . Adam first of all, i want to acknowledge that the government is listening very carefully to the chamber of commerce and the Business Community on this. They know how sensitive it will be to unwind the furlough scheme to prevent large numbers of redundancies, which i think is the common goal of businesses and governments alike. Our poll results have shown 70 of firms resulting responding are using the furlough scheme in some degree. That is an enormous number. They say it needs to be made more flexible. They need to bring people back one or two or three days a week and see if the government might be willing to top up the remainder of furlough pay for a period of time to ease the cash flow. Ony of them also are working of the ability to come as soon as possible. It is a big logistical challenge to make it happen. There is a really strong sense that the furlough scheme has been a big Success Story of the government pandemic response. Now is hown we face we unwind it. Expect this tou manifest longer term . Do you think businesses are going to invest less and save more . Adam it is certainly our hope that we would see some significant incentives for businesses that are able to do so to invest . There are all sorts of productivity enhancements, things they can do to enable other work. Businesses are going to have to do those two retain high levels of productivity. Be unfortunate to see businesses pulling back and not investing in growth and productivity. We are going to need to see some steps over the coming months to incentivize that and encourage them to do so. Adam, thanks very much. Adam marshall, director general of the British Chamber of commerce. We are minutes away from the start of the equity trading session. We will get some of the stocks we are watching out for at the start of wednesdays trading session, including rollsroyce after the engineering giant says it plans 9000 job cuts. More details on that. This is bloomberg. Matt welcome back to Bloomberg Markets, this is the european open. Seven minutes to go until the start of european cash equity trading. Lets take a look at the bloomberg first word news. These are todays top stories from the bloomberg terminal. President donald trump is hoping the reopening of the economy will dampen the need for another round of stimulus. That sentiment is shared by Republican Leaders with Mitch Mcconnell saying the only way out of the crisis is for america to grow again. President trump is predicting a really great Third Quarter for the u. S. Economy. Brexit talks have soured with the u. K. s chief negotiator accusing the eu of only offering a lowquality deal. Is treatingblock britain as unworthy of a fair trading agreement. The brussels chief negotiator says britain wants to keep the benefits of being a member state without the obligations. I would want that too. South asia is bracing for the biggest storm over the bay of bengal all in 20 years. Evacuating five Million People to safer locations. It is expected to open speeds of over 200 kilometers per hour. Bangladesh has raised its warning to the highest level. 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 . Uptodate with the stocks we are watching. Minutes to go until the start of the equity trading session for europe. Lets get to Annmarie Hordern who has a rundown of a few of them and you are starting with a company paying a dividend. Annmarie exactly. Thats the big take away. We are seeing the dividend really on the chopping block for a number of companies, but they are confirming that the 2019 confirming the 2019 dividend. They see the pandemic accelerating change. That has been a big topic among a lot of companies, but they are really cementing it in their bylaws. Matt volkswagen i noticed 4. 5erday, in the form of million euro payments got kind of a sigh of relief from investors. Annmarie this is going to be buttoning up and putting to the side this case. It would have been weeks or months import proceedings in the media. Thisillion euros to end criminal case settling this German Market manipulation case alleging they informed markets to late about the diesel emission rating. Definitely, i think this is really helpful for vw and chairs are higher. Matt man. Anna thanks very much, Annmarie Hordern. Yeah. Important details. Rollsroyce also worth a mention. Let me throw that in. The loss of at least 9000 from their workforce. We will keep our eye on whether we get any more movement. A Global Workforce of about 52,000. Futures have been varied depending on whether you are looking at europe or the United States. At the moment, u. S. Futures dewpoint downward. Upwardu. S. Futures point , europe down. This is bloomberg. Anna a minute to go until the start of the cash equity trading session for europe for this wednesday morning. Ready and waiting, jay powell says the fed is willing to use all weapons to combat the coronavirus downturn. The ecb is prepared to boost bond buying, Andrew Bailey testifies in front of lawmakers today. Global coronavirus cases near 5 million. Vaccine testing starts and future trades miss. Job cutsce plans 9000 as the coronavirus pricing shatters the companys turnaround strategy. Matt . Matt we are looking at futures that are kind of mixed around the world. Around the here in europe, we are down more than 0. 5 . Yesterday in the u. S. , they turned down the session after that moderna news was blown up. Yesterday now, we are looking at positive futures on equity indexes. It will be interesting to see how the trade morphs through the day. We are getting the ftse opened right now, down about 0. 1 . You can see the british is down a little bit, too. Inerestingly, they move opposite directions. The ibex and madrid opening down. We are seeing drops here. Drops across European Equity indexes slightly into the first few. We are only open for 46 seconds now. The ftse down. 5 . European markets are opening lower, but they are not huge losses. Anna indeed. European markets a little sluggish as the ecb is hailing the eus move toward a more substantial physical package. The plan for a 500 billion euros stimulus, it must get the support of all 27 Member States. For now, the ecb stays alone. To expand its emergency Bond Buying Program if needed. Lets talk about the supports the markets do need. Where are we in the big picture story . A lot on botheen sides. Thats right. Straightaway, we saw Interest Rates drop. We took Decisive Action very early. We have seen huge stimulus packages, especially in the u. S. Put it into context, it was nearly three times what we saw back in 2008. They have acted pretty quickly. We are in a situation where we do not know how long this pandemic is going to last. You mentioned earlier about the modernity vaccine. Markets are swaying. Will beer or not there a vaccine. At that point, the authorities need to remain pretty alert. We need to keep the revolver loaded not knowing how long this continues. Also need a comprehensive plan to open up. That is a problem it looks like in the u. K. , as well as the u. S. In the case of america, too many governors making different decisions. That is actually right. They are looking when i went out and a statebystate basis. In the u. K. , you have a difference of opinion between trade unions and governments. The question is, how long can you remain down . You cant stay this way effective indefinitely. There has to be a plan. Obviously, im looking at Hospital Capacity ensuring that we can get there. Do you see volatility ahead . You see volatility ahead . Some of the option positioning suggest investors are bracing for volatility. I think where there is uncertainty, the market recovery. Italy has announced opening up. We have seen pollens talk about restaurants. I think the question now is in the lockdown ends, but how it ends and how quickly people start to go back. How confident the consumer is to start spending again. How many of those furloughed employees are actually back to work on a more permanent footing to start spending again . Matt what do you think about the possibility of the fed going negative . President trump says it would be a gift, but many economists say could be bad for the economy. Powell,omments by jay he is a very conservative man, quite cautious and he doesnt really get swayed. He talked about how negative what ised could do effectively a bazooka in the lending program. When he is in front of the senate, they talk about how to get that out completely. Are we likely to see the fed move negative . It a longely to see way off there yet. Anna a long way off in your view. Just to bring in central banking decisions, we are seeing thailand cutting its key rate. That was expected by most people, but this is an was fairly divided, 43 from the mpc. I will jump from thailand to china and ask what type of support we might see coming through. China has had a very differentlooking crisis. They were there early, but they have not necessarily done the same stimulus measures as other places. Can we expect more stimulus as china recovers . You are absolutely right. China has actually done very little. China has done less this year than it did back in 2008 and 2009, intentionally. China has had a very different pandemic. The timeed right at the chinese economy shut down. People arent moving around, factories werent closed, so they managed to isolate the spread quickly and then they had a prompt and measured reopening. They just extended that for two weeks. China is very concerned about adding more and more debt. Confidenteyre very that the economy has not taken such a large it, they are standing on the sidelines and waiting to see how other countries. It was still very exportlead. Just in terms of domestic demand, they have managed to get out of the crisis very quickly. But the chinese peoples bank has openly said, if they need to, they will, they just have not had to yet. Matt we are going to keep you with us and talk more about what investors should be doing. Our guest stays with us. Coming up, something to get your fangs into. We will get his picks on why he likes americas biggest tech companies. This is bloomberg. Matt 10 minutes into the session and we are looking at losses. Lets get the Bloomberg Business flash. Top corporate stories from the bloomberg terminal. The case alleged they informed markets too late about diesel emission rigging. Pay for. 5 to Million Euros each to end the case. At the case gone to trial, it would have meant weeks, if not months of work proceedings. Jobsroyce is cutting 9000 it shatters the plan to revive earnings. The jet engine maker is particularly exposed because of its focused on larger aircraft. Virus willof the last much longer than just 2020 with the recovery in the Aerospace Industry taking several years. Shares of spotify soared yesterday after the company signed a deal with joe rogan beginning exclusive rights to his very popular podcast. The company has invested hundreds of millions of dollars in original podcast over the past few years and rogans show regularly ranks at or near the top of apples podcast charts and that is your Bloomberg Business flash. Anna . Is with mngp somel m g and he is still with us. Want to ask you about some of the sectors you see potential in right now as a portfolio manager. You make a point in your notes that when you see companies trying to turn their operations to be carbonneutral, then you know that this is not the state passing fad. Where do you go for fintech opportunities at the moment . Randeep if we look across the board now, there is a movement more toward carbon negative or just simply reducing the carbon across the board. And that idea to the forefront. Responsibility to report the negative externalities. Even across extractive industries, Companies Reporting very clearly on what is co2 fromions, but also Renewable Power to companies that recycle, volkswagen, for example, we have been mentioning the supplyare moving chain to be carbon neutral, as well. Copper is four times more is inent in an ev than it a combustion engine. In order to keep this, they are having to remove move to Renewable Power to show their environmental credentials. Then you have the new eu taxonomy laws coming into place in two years that all economies companies will have to report on climate and the efforts they are making, so that will ensure investors have a much better understanding in terms of what to look for. Acrosstheboard, all sectors, all industries, Renewable Power at the moment, given that is the most prevalent when it comes to co2 production, we will sob probably see the biggest moves. It is still a small percentage. We see prices come down. What we have not seen is a move toward renewable. Can stand inies economic terms on their own legs now. Safe, clean, reliable, and cheap power is what they provide in this industry is moving through unharmed. Huge opportunity for growth. Matt we were talking about the likes of these Big Tech Companies that have done so well already, up 30 from the lows in march. Do you still think they have room to run . Randeep when you look at the tech giants, you are looking at quality businesses that make very high capital returns. The second leg of that is in situations like this where other businesses have been disruptive, they are not. Google has seen a bit of a hit to advertising, but new businesses, new information you can still google while you are at home. The Customer Base is still there. Microsoft, they continue to move to the cloud. More and more people working from home means more licenses. The Business Model continues to evolve. Valuations have risen, future disruptions still in place. Thanks very much, randeep somel. Thank you so much for your time today. Continuing his conversation from the top of the next hour on bloomberg radio. Still to come on this program, a wave of downgrades set to rock global credit markets. We discussed the record a pile of potential fallen angels. This is bloomberg. It was wonderful news that we are getting to the place where we can Start Talking about reopening, but i would highlight that is only the first step that we need to take. Consumers have to be comfortable actually going to businesses and buying at stores, going to restaurants. Employees have to feel comfortable going on the subway, the train, the bus. With community spreads took continuing in massachusetts, i think we are a little way away from that point. As important as it is to take the first steps to allow businesses to open up, i think we should be cognizant of the fact that many people, particularly Older Americans are going to be very leery of going into restaurants, going on to mass transit are going on to planes when the Public Health is solved. Youhat are people telling about their expectations for business, for the economy, as you reopen . I think they are very much hoping there will be a pickup in the second half of the year. I think in gdp terms, there will be a pickup. I also think that unfortunately, the labor markets are still going to be pretty weak. In a talk i gave today, i highlighted that by the end of the year, i expect the Unemployment Rate to still be in doubledigits, so it is going to be down. The Unemployment Rate was down 14. 7 . Many americans that took that survey said they were employed, but were not working the week of the survey. So, the number is probably a little closer to 20 and we will see if it still goes up a little bit more, but i think that by the end of the year, we are probably talking in the low double digits. That is still a very low Unemployment Rate. High Unemployment Rate. I dont think many employees are going to want to go into some of the cities that are having significant problems and i think consumers are still waiting to feel more comfortable before they go into stores, into restaurants. The other programs that has come into some criticism is the secondary criticsmarket saying saying youre propping up Zombie Companies that cant survive unless they continue to borrow and at some point we will have a lot more defaults and bankruptcies. Do you see that happening . With the main street program, we are definitely doing somewhat risky lending in that the borrowers we are providing finance for were borrowers that were in good shape at the end of the year, but are now facing difficulties as a result of the pandemic. Probably by design, these are going to be problem loans. We are trying to get the right outcome for employment. If all these businesses end up failing, that would be a Significant Impact on employment. We want to avoid that outcome. We are taking a little bit more risk than we normally take in order to make sure there is sufficient financing. I would highlight that during the financial crisis ended new england during the 1990 crisis where it was a credit crunch crisis, one of the problems was that borrowers and households could not find financing, so we are trying to make sure that the lack of financing does not become a problem right now and make sure that what is hopefully temporary spells of unemployment actually stay temporary and people are able to be employed. Businesses have to finance themselves, the more risky it becomes for the economy overall. Enjoyedcompanies have working from home and the savings of working from home, do you anticipate problems in the commercial market. I think commercial real estate is going to go through a major shift as a result of the pandemic. Clearly, office space is the result one result. I do think that some multifamily housing may change. I think we are in a period where real estate is going to be going through some pretty mac massive changes. Matt that was the boston fed president Eric Rosengren defending the risky loans being handed out. By economic pain brought on the coronavirus has all but halted cash flow for corporate around the world. As Balance Sheets deteriorate, more and more issuers are under threat of losing their Investment Grade status. Here to discuss the coming wave of what had begun known as fallen angels is dani burger. Dani matt, it certainly looks like a dire situation from where we are standing. 300 billion worth of issuers have seen their debt downgraded, the most since 2015, but it is likely to get worse. Global, 100 11p issuers are at risk of losing their Investment Grade status. In some ways, the environment was really ripe for this to happen before the crisis. More than half of issuers where the lowest rated. Once you get the coronavirus pandemic, oil prices fall, you get a lot of this debt at risk. Certainly, we see a lot of financials like virgin money, autos like to show, and went like peugeot, and when they lose money, it is harder to raise money. This is the worst possible scenario for having a hard time losing money. Considering a lot of them are already at risk of defaulting. Anna yes, and what is being done to support these companies at risk of being downgraded . We have seen the fed willing to step in. Into part of the market that may have been unexpected. Absolutely. Jay powell emphasized the need to protect these companies at risk of defaulting. He said there is going to be a severe dislocation should a wave of downgrades hit. The fed has even stepped into the junk bond market and jay powell has made it clear they are specifically doing this to target fallen angels. The ecb is also buying triple b rated bonds in europe, though they have not stepped into fallen angels. Certainly, there is speculation that they will. On the company front, companies are having to get very creative once they are at risk of getting downgraded. Royal caribbean had their Investment Grade status removed. They are now speculative. It is harder to raise debt. They have gotten very creative in terms of bond offerings. We are likely to see that continue. Matt thanks very much. Dani burger talking about fallen angels. Up next, the impact of the coronavirus on women in the labor market. 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. Anna welcome back to Bloomberg Markets european open. Lets take a quick look at where we are in these markets. Half an hour into our trading session, we are weaker across the european equities a space. Futures in the u. S. Have been looking a little more optimistic, though. When we look at where we are from a sector perspective, we have got only two sectors in positive territory in europe, health care and food and beverage. Banks, insurance, travel and leisure all to the downside. One of the big stories has to be around rollsroyce. We have seen them announcing that they are going to have to lose 9000 jobs. The ceo giving more details about where those are job losses are going to come from. The Civil Aviation sector we see developing ahead, no surprise we see these job losses coming through from that sector. Matt lets get the bloomberg first word news right now. Is hopingtrump reopening the economy will dampen the need for another round of stimulus. That sentiment is shared by Republican Leaders, with senator Mitch Mcconnell saying that the only way out of the crisis for america is to grow again. President is predicting a really great Third Quarter for the u. S. Economy. Tumbled yesterday after hitting an alltime high. Thats after Health Publication thet highlighted preliminary nature of the data surrounding the coronavirus vaccine. It also cited a lack of press release from u. S. Officials, who partnered with moderna on the trial. New zealands Central Bank Governors says he is open to taking the cash trade to negative, but only if it passes a number of tests. He says it has got to be seen as necessary and effective. The reserve bank has so far turned to quantitative easing as its main crisis tool. It plans to leave its cash rate for now at 0. 25 . In fact, through the First Quarter of 2021. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna . Lets talk about the job losses connected within the coronavirus pandemic. Services and hospitality sectors are two of the most severely impacted by the coronavirus crisis. They also happen to be industries that employ a lot of women. Layoffs having a larger impact on one half of the population than the other . Unemploymentdiw, claims rose by 16 in april compared to only 12 by men. Joining us now is the head of gender Economics Research at daw, diw, katharina wrohlich. The main reason behind this fanomic, job loss paying lling heavier on women is just women working more in the sectors affected . Katharina yes, that is one reason. As you mentioned, the industry most, they are very different from the last crisis. Service,hospitality, culture and recreation. More than 50 of the employees in germany are female in the sectors. Crisis hitsthe female workers hard from the labor demand side. It is important to note that this crisis has kind of a double impact on the labor force, in particular on the female labor force. It hits workers from the labor demand side but due to School Closures and closures of kindergartens and so on, it also hits people from a labor supplyside. Women are hit harder. They take over a larger share of care work. We also see already in germany that it is mostly women who reduce working hours or even quit their jobs in order to care for the children. Matt is this a bigger problem in germany . I always thought of germany as a fairly liberated society. It does seem that women take on sort of home the care duties, childcare duties than even in other western countries like the u. S. Katharina yes, definitely. Up until the 1990s, west germany has really ranked very low with respect to indicators such as mothers Labor Force Participation rate or share of children enrolled in Early Childhood education and care. Germanyast 50 years, caught up on this. We really had Something Like paradigm change in family policy. Afternoon care for schoolchildren was expanded. We had a new parental leave scheme that also are incentivized fathers to take some leave and so on. If you look at the political debate and if you now look at all these debates on economic recovery programs and so on, you already almost have the impression that these past 15 years have not happened and we are still living in a country like in west germany in the 1970s, where all women are at home watching their children anyway. Policymakers did not really find an answer to that really big problem of parents, working parents have to watch the children now having to watch their children now. Anna i suppose the longer the lockdown measures are in place in any country, the longer this effect is felt and the bigger the danger of sort of backsliding in an economy. What is this crisis like compared to others . Seen jobses, we have losses fall more significantly on men in the workforce. This does seem different. Katharina exactly. Thismpare in our report crisis to the previous crisis of 20082009. We see that very different sectors of the economy are hit. In the past crisis, it was really industries where men were more affected. The share of men were furloughed who were furloughed, lost their jobs was much higher than the share of women. This crisis is different because of the lockdown, as i explained, other sectors are impacted more. But still, as i said, the important difference is that the labor supply side is also hit so severely. Matt what policies would you call for in order to even the Playing Field here . I mean, is germany considering giving more stimulus to stayathome moms or getting more stimulus to caregivers giving more stimulus to caregivers, boosting pay for people in those kinds of roles . What are you suggesting . Katharina we have suggested a schema for families where both parents are working or of course, Single Parents also, so that these parents are eligible to reduce their working hours and get an income replacement for that. In order to avoid that it would come again, always be the mothers who take this would, again, always be the mothers who take this transfer and reduce working hours, in couples, both parents have to share the care work. In fact, that both parents have to reduce their working hours. For example, in a fulltime working couple. That would be a possibility to equalivize a more gender division of this additional burden of care work. Matt thanks very much for your time. It is a fascinating story and we are going to continue to look deeper into this. Katharina wrohlich is ahead of gender economics at the diw institute in berlin. Green and growing or right and rotting . Ripe and we speak to the ceo of the Global Wind Energy council, ben backwell. Dont miss that conversation on what is here in germany also a very controversial topic. This is bloomberg. Matt welcome back to bloomberg arkets european open. We are 42 minutes into the session and still looking at red arrows across the equity indexes. Lets get the Bloomberg Business flash for you. Johnson johnson is discontinuing its talcum powder Baby Products in the u. S. And canada after thousands of suits alleging asbestos contamination led to a decline in sales. They will wind down the products but all existing inventory will continue to be many are juggling home and children, they said please take a day to relax. Last month he said 80 of his staff was working remotely. New power from wind and solar is set to fall this year for the first time in two decades. The construction of wind and solar farms is being delayed by factory closures, social distancing and financial concerns for the developer. The International Energy agency says the world is set to add 167 gigawatts of grenoble Power Capacity this year. Grenoble Renewable Power capacity this year. Is this just a glitch due to the coronavirus shutdowns or is there a bigger problem with wind and solar . Morning. T of all, good first of all, is important to recognize that 2020 was set to be a record year for wind power. We were expecting Something Like 76 gigawatts, so the best year ever. Given what has happened with covid and project delays, as you mentioned, which turned out to be somewhere around 1520 , perhaps less than what we expected but it will still be a very big year for us. Just referring to those iea figures, what the report shows that came i couple of weeks ago is that actually renewables is the only Energy Sector that actually grows in 2020. Coalu know, oil, gas, and have all completely fallen off a cliff. We are still looking at growth for our sector but obviously some impact from covid. How much of those delayed projects spillover into 2021 . We still expect a lot of that, especially in china. Anna good morning to you and thank you for giving us the visual clues that tell us that you work for the global wind industry. A sign of the times, i suppose. Let me ask you about emerging markets and the role of renewables. We have seen them take more of a market share versus older foster fuels in emerging markets. How quickly is em catching up on that front . Mean, we arenow, i talking about emerging markets. China is by far the biggest market. And then we have seen very strong growth over the years in places like india, brazil, mexico, and now increasingly Southeast Asia as well, so places like vietnam. We expect that to continue. Know,ld not expect, you this crisis resulting in people stopping their transition away from coal or oil or gas. There is no real reason why that should happen. Matt what do you think about countries where at least the locals feel that there is a level of saturation . For example, here in germany, it is an incredibly hot story on local media that communities are turning against windmill installations. Yes, but i think this is a really important issue. As you say, there has been a slowdown in some key markets because of these issues around permitting. It is really, really important that government get this right if we are going to go to an accelerated phase of renewables development, which is what we need to reach the ipcc climate target. This is not a question of Public Acceptance. Thearound the world, all polling indicates that people are more supportive of wind than they have been anytime in the past, and that includes places like germany. What we have here is not really a problem with Public Acceptance. Its not a problem with Community Acceptance because communities with wind farms tend to be even more supportive. I think what we have here is a problem of regulation and there is clearly the need for Regulatory Reform to make the permitting process much more streamlined. At the moment, you have certain countries where Legal Framework allows one or two people to file legal challenges that can hold up projects for years. We clearly cannot continue with those kinds of systems. Matt it seems to be a problem anger from people in the community. They dont want windmills installed in, for example, nature parks, which is one place you often see them here. They are not appeased by small Cash Payments from companies. Do you think that may be Energy Producers need to think about communities a bigger share of the revenue . Ben yes, i mean that are absolutely thinking the company should first of all, have really good engagement with communities and figure out what is helpful for communities. There have been lots of ums with companies that have tried to bring in revenue sharing. We fully support the. That. Our engagement with communities is absolutely key. This is not a Public Acceptance problem, per se. If you look at all the big polls that have been carried out, Public Acceptance has actually gone up. I would not say this is a question of anger against windfarms really as a kind of trend. Anna yeah. See, when youyou look across europe, just briefly, where do you see more opportunity to put green policy . Ben it is a huge opportunity for economic stimulus. First of all, we know that there is a need for wind and solar to be wrapped up to meet the climate targets. We know that we have a lot of Shovel Ready Projects that could be brought forward to speed things up. We also know that the Energy Infrastructure of the world needs to be updated, in terms of transmission, infrastructure, and all these other things that are necessary to have a new kind of energy system. We estimate that if you get investment to kind of where it needs to be to be consistent with the ipcc, we need to reach Something Like two terawatts of wind power by 2030. That requires Something Like 2 trillion. In investment. This is an opportunity for countries and governments to thisout of covid through kind of investment, which is really no harm, no regret investment. Also, things like job creation as well. We calculate that jobs at the moment in wind energy are about 1. 2 million of the end of 2018. We think again if you get Something Like two terawatts, we Something Like 4 million jobs by the end of 2030. Anna thanks very much. Thanks for joining us today. Ben backwell, Global Wind Energy council ceo joining us to talk about the Renewable Energy story. Coming up later on, bank of england governor Andrew Bailey will be testifying in front of the Treasury Select Committee at 2 30 p. M. London time. We would just will discuss what to expect from this testimony with laura cooper. That conversation is next. We might touch on negative Interest Rates, on the possibility of those in the u. K. This is bloomberg. Matt welcome back to bloomberg. Rkets european open we are almost an hour into the trading session and were looking at losses across equity indexes with the ftse mib down 2 in milan. Laura, how do you see europe . We have been talking a lot about how european stocks are undervalued compared to u. S. Stocks, even after the rally that we saw from the lows. We have Angela Merkel and Emmanuel Macron agreeing finally to share debt in terms of a stimulus plan for post coronavirus eu. Ere opportunities here that investors are missing . Absolutely. I think markets are rather underwhelmed from what we have acron and merkel today and that is unjustified. This could be a game changer. They are saying they are going to have these fiscal transfers from rich countries to poor countries. This is clearly needed to ensure that the Monetary Union has prevented from having this fragmentation. When we look at the equity market, i think there is certainly a degree of optimism that needs to be priced in going forward. Certainly as we see reopening of economies become more successful and just the valuation side when we look at european equities. A need for optimism there. Anna yes, laura, important longerterm story. Laura cooper from our Bloomberg Markets live team. That is it for Bloomberg Markets european open. Next. Llance is up european equities under pressure today. We see u. S. Equities opening in a few hours. We will keep an francine jay powell says that that is ready to use all weapons to combat the coronavirus downturn. Global coronavirus cases near 5 million. Cold water thrown on modernas vaccine. The bank of england debate continues, Andrew Bailey testifies today. Good morning. This is bloomberg surveillance