Do their own thing. The s p 500 up 0. 1 , the dow up 0. 2 , and the nasdaq down more than 0. 1 . Its high. Ff a little strengthening, and we now. T 7. 1612 spread atnbund 1. 86 . We will be speaking to the European Commission budget commissioner a little later on in the later of in the 11 00 hour. We will definitely be i had be asking about the euro stimulus. Matt the equity indexes continuing to rally is really the story here. They are doing much better across the continent and in the u. S. We are still looking at 1 plus gains on the broader benchmark stoxx 600 index. We have a more than 1 gain on the cac 40. And thes injects stimulus injection each day, the storyline the first day with airlines. Then was autos. Then it was the rescue plan. Now we are seeing the luxury goods makers doing well. 3 ,methods up more than carrying up to. 3 . Investorscally like think people are going to go shopping organ shopping again, or continue to go shopping. The euro gaining a bit of ground, over 1. 10. There is faith after that proposal from ursula von der unionthat the european will stick together for at least some time. That is driving the euro higher against the dollar. The pound also rising a little bit, but not coming back to the levels we saw at the beginning of the week. Over 1. 23 for a bit. Thean only weakened on Dominic Cummings story. You see a gain in the pound dollar, even as there are 70 question marks over the british there are so many question marks over the british economy. Corbatup ceo michael spoke exclusively with bloombergs Erik Schatzker earlier. Lets listen into that. It is not about setting a date. I tell our employees all the time, you are not going to wake up one morning with a blast email saying tomorrow is the day, come back. We are taking very gray nil or approach to this taking a very granular approach to this. As we look at this pandemic, it is uneven in its nature in every sense. It didnt start at the same time. It hasnt spread at the same rate. We see varying health care responsys, varying policy and economic responses to it. Not just in the u. S. , but around the world, theres going to be a varied pace of recovery from this. Perspective,citis we are going to take a very granular approach around the data and what that data tells us. A linei think, stealing that my wife often uses, while we are all in the same storm, we are certainly not in the same boat. I think weve got to be very mindful of that. Erik clearly, one of the hardest decisions as ceo has to make his win to bring people back to work. Are they going back to their old desks or some new space in the suburbs . Will employees be expected to travel, or is zoom the next Business Class ticket . If a big client shows up at the front door with a fever, do you welcome them in order from them away . Tell me how you are thinking about those kinds of issues. One is thatichael our Business Model has given us some advantages. Have been in asia a long time. Our colleague there gave us great insight as we knew that it was likely that covid would be coming west. We had the ability to have the learnings on the ground of what was happening in asia, what was working, and what wasnt. If you go back and look at the record, i think we were pretty early movers in terms of some of the decisions we made. Overarching since then, it has all been about the health and safety of our people, in terms of making sure we can do everything within our power to ensure that. Again, as we start to think about returning people to the office, it is going to be driven by data. It is likely to be slow. It is likely to be granular, so it will be sidebyside. Within those sites, it will be job by job. I think the great news is that the investments we have made in technology along the way, the efficacy of which Remote Working has worked for us, i think it is nice to have that flex ability. If you look at the things we have done, it has been extraordinary in terms of lending, in terms of holding our annual shareholders meeting, closing our books to report earnings in nine days. The things we have been able to do for our customers and clients , and by the way, the things we have been able to do for the communities we serve in terms of giving back. Is data driven. You have been very clear about that, but give me your best guess, when will you start putting people back in your Global Headquarters in Downtown Manhattan . Wehael it is all about can bring in these people and keep them safe. There are protocols we have been working on. It is not simply about a desk or an office. It is about coming through the turnstile. It is about the cafeteria. It is about the elevators. It is about all of those things that youve got to make sure are safe. Bigger challenges actually i dont think are in phase one. I think it is as you continue to bring more people back, how do you scale those protocols to be safe. O keep that back on putting traders the Trading Floor a priority . Michael theres been a lot of talk about people not returning to work. I am very comfortable saying that is not who we are. We are happy to continue to imagine and reimagine as we go forward the ways we come to work. But at our core, we are a client facing, client driven business that in many ways is an apprenticeship business. The craft, the trade is passed down, and Human Interaction is critical. Bloombergs was Erik Schatzker speaking with michael corbat, citigroup ceo. We will have more of that conversation a little bit later on. Lets continue on this theme and bring in bloombergs Abigail Doolittle for more. What we heard mr. Corbat saying is being echoed by the banks. Many are still working remotely and performing as well as ever, but it remains to be seen exactly when we will see full workforces again. Abigail it is such an interesting conversation, and the crux of the matter you are talking about, the reopening of the economy, especially getting these big businesses back to work, mike corbat was really talking about keeping the folks safe. Making it safe for once they come back. Here at bloomberg world headquarters, certainly seeing signs of those same precautions being taken. Something he didnt mention that i have heard other folks at banks talk about is the liability on the part of companies. They want to make sure that the company is safe from being sensually sued at some point. So it is safety for the employees, safety for the company, taking all of those different precautions. In terms of it being data driven , flexible ability, not just oneit is answer that is going to be applied here, but a more flexible reopening, talking about perhaps a july here in new york city, and to also talking about the commuter. I took my first subway to work today since january, and it was great, but some people dont feel that way, so it will take some time. Matt you rode the subway and then went into the office . Your spreading everywhere. No, let me ask about the bank stocks. They are the absolute worst performing Industry Group in europe. On the stoxx 600, banks are doing worse than oil year to date. In the u. S. , energy is obviously the biggest loser, but oil is down 23 . Why are the banks doing so poorly . Abigail theres a number of factors weighing on the banks. Before i talk about that, i did wear my mask on the subway, so everybody is quite safe. But relatives are the banks, youre right about that. They are still in a pretty bad bear market, not quite as much as a week or two ago as we are having this cyclical move back to the banks and industrials, but down 22 . That has to do with the fact that there is a specter of negative rates. That clearly would not be good for the banks. In the first quarter, you had huge loan reserve losses. I think citigroups was more than 5 billion. Plus, what is ahead. I think it is the uncertainty weighing on this group. But i think for a while, it has really been the possibility of negative rates that would clearly not be great for banks, so weighing on that group overall. I have heard reports about some of these banks having phenomenal trading booms because of all of the volatility. Corbat tried to ask mike about whether they are bringing traders back. Ive heard reports at some of the big banks that traders are on the floor. Those are some of the employees that are already back. Absolutely. Some of them probably on the subway with you. Was it crowded . Abigail it was the six, and there were probably about six or seven in my car. It was quiet and clean. Ive been walking since january, and i am going to start taking the subway every morning. Matt and that line is well airconditioned, as well. Abigail doolittle talking about the bank stocks after he saw a fantastic interview with citi ceo a corvette. Coming ceo michael corbat. Coming up, china defies a threat from President Trump. Live from berlin, im matt miller, with vonnie quinn in new york. Matt good morning to you in new york. Im matt miller in berlin. Vonnie quinn is in the city. This is what i think of is what i think of as the real city. You probably think i mean london. Vonnie no, i think new york. [laughter] matt lets check in on the bloomberg first word news with ritika gupta. Ritika it is a sign that people are starting to return to work in the u. S. State unemployment rolls trying for the first time during the rollsvirus pandemic shrank for the first time during the coronavirus penned him at the European Union has a growing list of grievances with china. Still, chancellor Angela Merkel says the block needs to consider the big picture. The European Union has a great strategic interest to improve the cooperation with china, which is one of the major actors in the century. To master our relations, it will also depend not only on the improvement of diplomacy and trade relations, but also on the fact that we europeans have to china in the result of the architecture. Ritika Angela Merkel says china will be her top priority. Lawmakers in china have defied a threat by President Trump. They approved a proposal for sweeping National Security legislation aimed at hong kong. Democracy advocates say the measure will curb essential freedoms in the city. The vote came a day after the u. S. Declared hong kong was no longer autonomous, and it could lead President Trump into imposing sanctions on china. 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. Im ritika gupta. This is bloomberg. Matt vonnie, matt . Matt thank you very much. For more on hong kong, rishaad salamat, coanchor of Bloomberg Markets asia, is with us now. China approved overwhelmingly the National Security legislation, i think 99. 6 approval rating. What more do we know about what this means for hong kong . Rishaad just to start off with those stats, it wasnt a great surprise. The National Peoples congress 8381, with six abstentions, on this security legislation. Unsurprisingly, they actually voted on a law that no one knows the details of. It has not actually been written yet. Will haveficials months to sort out the details of this, but overall, it is designed ban subversion, defyingn, and it is all threats by Donald Trumps administration to respond strongly to a measure that democracy advocates say will curb essential freedoms in the city. Back. Ey have hit we had carrie lam saying that 1. 8 5 Million People support this legislation, according to the state news agency. Saying thatpremier the one country, to systems policy would remain in place. Imagine that people are not buying this. The Trump Administration did take a huge step in saying that it could no longer certify that hong kong was autonomy certify hong kongs autonomy from china. Could trigger a range of actions in washington, from sanctions on chinese officials, or indeed, going whole hog, as it were, and reverting the city us special trading status. Vonnie what has been the actual reaction and hong kong . Rishaad hong kongs most prominent prodemocracy advocates calling on donald trump to hit china hard, even to the point of going the whole hog and actually pressing the Nuclear Button i dont mean that literally by reneging the special trading status and impose sweeping National Security legislation on the Financial Hub being something that you cannot countenance. They really want them to go the whole hog. The pressure on the u. S. , i suppose forcefully against when, do follow along from secretary of state mike pompeo announced that the u. S. Believes hong kong is no longer autonomous from china. On the market, it was anything but an ordinary afternoon. Chinese lawmakers doing this and the hang seng plunging 2. 2 , and by the end of it all, Chinese Companies spurred a bit of a about 0. 7 ly closed down, ultimately. Vonnie the market has been a ways has been amazing to watch. Rishaad salamat, thank you for that. Gileadhead, roche and initiate a late stage trial which pairs their drugs. More on the race for a vaccine, next. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with matt miller in berlin. This is Bloomberg Markets. Gilead and roche teaming up for a late stage trial in the battle against covid19. Joining us is Bloomberg Pharma reporter robert landreth. We have seen about a half dozen or more partnerships at this point. Abert yes, this is partnership looking at two different drugs that would work against hospitalized patients with severe cases of covid in two different ways. Remdesivir, the gilead drug that everyone has heard about, and , inviral given by infusion the trial sponsored by the National Institute of health, people got out of the hospital four days earlier. The roche drug, what happens with very sick patients in late stages, it is believed that the inflammation, the reaction to the virus by the immune system, kind of gets out of control. That may contribute to some of the deaths from the coronavirus. This rochedrug drug is an antiinflammatory , so it would calm down the immune system in the late stages of the disease. It is already being tested, but now they are going to combine it with the antiviral drug from gilead that got emergency authorization a few weeks ago in hopes of having an impact on mortality in patients of late advanced stages of the virus. Matt is a vaccine the great hope, or is treatment maybe a better solution for now, since it could take so long to produce a vaccine in such massive quantities that we can really put it to good use . Robert the way to think about vaccines, there are so many vaccine efforts going on right now, it is hard for people to keep track of these. I think theres around 10 now in clinical trial. The way to think about it is a vaccine that will be given in large quantities to totally healthy people, so the trials have to be very large to make sure it is very safe. When you look at the death rate from this virus, even if you get it, we are talking about 1 , 2 . The side effects of the vaccine, it has to be so safe and so well documented and tested. That is going to take a while. Then there is the fact that even if someone does produce a vaccine, theres not going to be enough for all of the people who want it first off. No one has ever tried to produce time it vaccine for the whole world, and no one really has the capacity. Right now, until we get a vaccine, what we are stuck with and trying to get is some drugs to mitigate the worst aspects of this virus and keep people alive in hospitals. That is what this trial is going to be looking at. Merck alsompany acquired another drug that was originally developed by yale in theity that may help earlier stages of the disease as well. So theres a lot of drug efforts going on right now. The hope is that some of them will get out faster, and they can also be tested a little faster than vaccines because they are being given to sick people. You can take somewhat more risk in terms of a safety profile. There are somewhat more accessible side effect profiles, but a vaccine has to be absolutely safe. Vonnie robert, thank you for that update. Still ahead, we are going to be speaking with the nissan ceo. Vonnie live from new york, im vonnie quinn, along with matt miller in berlin. This is Bloomberg Markets. We are awaiting crude Oil Inventories right now. And i can tell you that the market is looking for a drawdown of 1. 275 million barrels. We had oil pretty whippy in the last few days, but russia saying it is going to stick to the agreement we already struck. Aboveouping meant we were 32 a barrel yesterday for an extended time. Once again, the inventories looking for a drawn out of a drawdown of 1. 275 million barrels. We are looking for refinery utilization to come in positive 1 . It is looks like we are in a bit of a desk like we are seeing a bit of a delay it looks like we are seeing a bit of a delay. Matt eia natural gas stockpiles are up big time. It is very different from crude oil. Natural gas inventories really jumping to 2. 6 one trillion cubic feet. To 2. 61 trillion cubic feet. Really volatile, putting into big size move lately. We will see if that causes the same kind of price action in the markets. As you say, crude oil right now, 32 . 49. It hasnt moved a lot in the last few sessions, but obviously. Ver the last year vonnie i think the market was looking for about that of a build. There seems to be a bit of a delay with crude Oil Inventories. We will bring them to you as soon as they appear, but first, lets get first word news with ritika gupta. Ritika President Trump preparing tos bike preparing to strike back at twitter because the platform slapped factcheck links on of his tweets. He says there will be an executive order that could lead to a flurry of lawsuits against tech giants that would narrow the Liability Protections they have. President trump faces a tough choice on china. Lawmakers have approved a proposal for sweeping National Security legislation aimed at hong kong. Prodemocracy activists say it will limit essential freedoms in the city. The president has already threatened to respond strongly. O the move there is a set of violent protests in minneapolis over the death of a black man in police custody. One man was shot to death. Police say they have a suspect in custody. The u. K. Coronavirus Trading Program was hit by technical snags on its first day. The socalled test and trace service, a key part of Prime MinisterBoris Johnsons plan to help the british economy rebound. In the program, officials Contact People who may have been exposed to someone with the virus and tell them to selfisolate. 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. Im ritika gupta. This is bloomberg. Vonnie thank you. Just want to point out that we still dont have Oil Inventories. We will bring them to you asap. For theosted net loss latest fiscal year, the largest in 20 years. I spoke to the ceo and asked him what is ahead. Have a listen. Nobody can say what will happen to the automotive business. We are running our country based on weekly and biweekly business plans. We are seeing the Automotive Market coming back, for example, in china. Anticipate that the total Automotive Market will be only 71 million, which is 20 million down. That is why we have not given any financial forecasts today. In fy 21,id today is we are targeting more than of profits, but what is important for our company is to bring the cash flow positive. We do believe in the second half, we will be cash flow positive, which is what we are aiming for. Vonnie you have some cash on hand, but how long will that last . We have sufficient cash in numberds, and in fact, one, we have sufficient cash in hand. Number two, we have enough credit lines with our banks and institutions. Number three, we have additional funding during this covid crisis, which has been given by the Financial Institutions and the banks. Vonnie so there wont be any problem, even if you dont become cash for positive when you say you will . I dont think so. That fy 20 isg based on 71 million. We have taken various scenarios for the markets. To ask youo want about planned closures. Many of these are necessary for the carmakers to be viable going forward. , renault, barcelona has been planned. What do you plan to do next . First, we are not closing plants because of covid. We are in automotive manufacturer. When we go to the market, we go for the long term. Into the bidding higher market share in higher growth in the market. It didnt happen. That is what we had to close. The same is the case in barcelona. Was already being studied. Today, but we announced was our. Ntention to close in the task force we announced today, we will have 6 market have, which means we will 93 product utilization of our plants, which is the best efficiency to have efficient cost in our operations. Vonnie what do you plan to do . Will you move more production to britain . It is a great plant for us. It is 22 years for us. We are now running 76 of , and we continue exactly like this. Then will you overcome Brexit Issues . Nissan is the number one automotive manufacturer in the United Kingdom. We are there for the last 32 years. Have 7000 employees, and a lot of suppliers invested in the United Kingdom. Great britaint will be successful in having the correct business scenario, even if brexit happens. With that anticipation, we are moving in that direction. Having said that, if the Business Team is not the same as today, we will have to think twice for future investment. Interesting. So you would potentially exit revenue . Nobody knows what will happen because of brexit. But i am saying that we are in the number one automotive manufacturer in britain. We believe the United Kingdom will bring in the same business as before brexit, and that is how we are going to continue. Brexit to waiting for happen, and two months before, i was in switzerland, when i announced 50 billion pounds of investment, which means we are moving ahead with our investments. We are moving ahead with new products. But somewhere, we also want to see what brexit can bring in. Has been a difficult year and a bit for renault. , and withe mood like hong kongals in where you are trying to take this threepart alliance . The objective has not changed, as we announced yesterday. For nissan, when we looked at our transformation plan, it is based on prioritization and focus. We have the biggest market share in these markets. We are going to focus on that. China is recovering fast. We have a strong product lineup, and we are going to invest more and more in china on the new technology and new products. We believe that the recovery we are seeing in china, especially in terms of marketshare, has been growing, and China Remains one of our most important critical growth markets. Vonnie you are leading efforts to forward the alliance in north america, china, and japan. How concerned are you about the renewed tension between north america and china . With theays align geopolitical context. Agile enoughion is to go for globalization when the markets are requesting globalization, and on the others, if markets are coming back to regionalization, we are to regionalization, we are very able to go to utilization. Having said that [no audio] develop specific products in china for chinese customers. This regionalized approach is giving us a way to look into the at maybe three different cars for three main regions. Interview was my earlier with nissans ceo. Fascinating how nissan has changed strategies so many times over the year. Obviously, carlos ghosn was a growth in volume guide. We just heard him saying that the company has to change to value at this point. Matt very interesting stuff. I am going to sit down with the ceo of renault tomorrow, so maybe we will bring you a bit of that on this program as well. At theup, we are nearly end of the month. Rent obviously do. We will discuss the health of the Real Estate Market with the ceo of the new yorkbased Real Estate CreditAsset Management company, coming. This is bloomberg. From berlin, im matt miller, with vonnie in new york. Time for futures in focus. Oil extended declines after an increase in u. S. Crude inventories for the first time in three weeks. I think we are going to get the doe number a little later. Lets bring in bob iaccino, chief Market Strategist and someone who is really looking at trading these contracts. What do you think about the oil right now . Think,ly, supply is, i the question, as nobody is wondering about demand. Good morning. I think you are looking at a market that might be a touch overextended. I have had my ultimate upside target for the short term as being around 40. While we obviously havent inten there, recent highs the july contract have us at 31, i think we can get there. Market thating at a is still oversupplied, although if you recalculate what is expected to be launched from the sale patch, what opec and opec has promised to cut, along with the new metric of a potential slide in demand somewhere around 4 million barrels, you are talking about a marketing balance, not a market that is undersupplied. So if you are in balance at around 34, 30 five dollars, i think that is probably appropriate, but some of that rains to be seen on the demand side. Matt what are you seeing in terms of the metals trade right now . For a long time, it looked like we were going to see massive drops in copper, massive drops in czink. Zinc. Lly in basically anything china needed. Do you see a pickup . Bob im not sure that i do. You are right in saying there is a recovery economically, but i think that Broader Market is clearly ignoring the u. S. china supplys, and also, the chain switch, which i am not sure we should necessarily ignore. I think the recent move in copper is correct simply because the Chinese Government will support the market for as long as they can, and that will include base metals. You let me finally ask about the coffee story. I see big moves in the contracts today. What is the issue there . Demand supplya story that you cant really argue with. Demand for coffee has skyrocketed from really low levels. You see the same thing in hogs, by the well. Going out for food and coffee were really depressed, and those are going to be a demand issue that i dont think there is a question is going to be interrupted by any sort of trade war and macroeconomic issues and the rest of the globe. So coffee will remain strong. Matt bob, thanks so much for joining us. Marketcino, chief strategist at path trading partners. Vonnie thank you for that. It is time now for our stock of the hour. For that, here is Abigail Doolittle. Abigail today we are taking a the Flexible Work office company. It is soaring in lending trading today. Up about 15 . They count wework as one of their main competitors, and they do own the reguess brand. 392 million. Ed the purpose here is to buy rivals hit by the virus. They say they see an opportunity in the fallout, and of course, with the stayathome orders and lockdowns around the world, a lot of folks working from home. Office not being used. Theres lots of question about what the future is for commercial will estate. As a result, the all world real estate index is down sharply on the year, down almost 20 , underperforming the all world index overall. So they are seeing an opportunity here ahead. New shares are expected to start trading june 1, and relative to the cash they are raising, not that they are low on cash, but their Balance Sheet has been moving perhaps in the wrong direction over the longer term. Once they put this 326 million on their Balance Sheet, it will give them the opportunity to buy some of those competitors and perhaps really strengthen through this crisis, come out the other side stronger, and be able to offer that Flexible Office space to more dental tenants. More potential tenants. Matt thanks so much. We will look at the health of the real estate sector in more depth. This is bloomberg. Matt live from berlin, im matt miller, with vonnie quinn in new york. This is Bloomberg Markets. Commercial real estate landlords are not having a banner year. Tenants affected by lockdowns are shutting stores or asking to delay rent or renegotiate contracts. Some are even dipping into bankruptcy. ,ere with more is sonali basak and vik uppal, Terra Capital ceo. What are you seeing so far . Obviously, it is very difficult for landlords when their tenants are not allowed to make any money due to a shutdown. Vik sure. Rra is a real estate focused asset manager was two decades of experience in multiple economic cycles. Given we are living in a very low yielding world the last few years, we didnt pick it make sense to take excessive risk and conservatively position our portfolio away from economically sensitive asset classes. What we are living through today is an exogenous event but he could have predicted. However, as you noted, all Real Estate Property types are facing challenges, which gets me to what i view as the underlying bifurcation in todays market. The commercial real estate world is split into two players. One, who took a discipline to fil a disciplined approach over the past few years, and those who are more aggressive and are either overleveraged or have portfolios with economically sense of economically sensitive property types. As an investor, you cant predict these events, but you can build a resilient portfolio and adequately prepare. Sonali so retail and hospitality was the big area that a lot of people see a lot of pain. Wondering if you think that is priced into the commercial Real Estate Investment you are seeing right now. Have investors gotten there yet . Vik it is a good question. Hospitality and retail have been hit very hard with significant numbers of properties being closed. That being said, i dont think any property type is fully immune to the fundamental challenges and changes in demand. A few examples of that are, one, industrial. There has been Significant Investor demand with the rise of ecommerce. It is important to keep in mind that very few industrial such as overleveraged retailers. Those businesses continue to be stressed. What you are seeing right now, as i pointed out, you are seeing this bifurcation between disciplined investors who are very conservative over the last few years, and those who are or aggressive or have are still that economically sensitive property types. For many of those groups, they have been focused on Asset Management triage, dealing with unprecedented amounts of forbearance for the next 90 to 120 days. Sonali what about the banks . You mention a lot of these properties were already overleveraged. Our bankers tightening their lending standards here in fear of the losses that they might see very soon . It is a good question. Havent seen a wave of defaults yet, and i think that is because lenders, banks and servicers have been in asset triage mode, dealing with the unprecedented levels of forbearance requests, especially those that have significant concentration to economically sensitive property types. Ultimately, what you have is massive challenges ahead, as you point out, with 2 trillion in commercial real estate mortgages maturing in the next five years, and today, over 150 billion in loans on the watchlist. Thanks so much for joining us. Really fascinating to get caught up. This industry is one i think we should be talking about a lot more and we already do. Great to have you on. Uppal ofsak and vik Terra Capital joining us to talk about the real estate picture. Vonnie next up, another interesting interview. We will speak with lee robinson from monaco, founder of hedge fund alt on a wealth alt on a altana wealth. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with matt miller in berlin. We are counting you down to the european close on Bloomberg Markets. Just over 30 minutes to go. Lets have a look at u. S. Markets. Where are also awaiting Oil Inventories. Lets look at the s p 500. Even after that raft of economic data, the s p up 0. 5 . Oil inventories showing a huge build, almost 8 million barrels. Barrels, when the market was looking for a drawdown. Your chart, but we are seeing a drop in crude 0. 7 and counting, trading now at 32. 56. Once again, a massive build in crude Oil Inventories. That has affected the refined lee utilization data as well. The refinery utilization data as well