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Up financial loans looking to extend the lockdown to may. Germany announces plans to let small shops reopen next week translator what we have achieved is an interim success no more. No less. I emphasize that it is a frag ill interim success this is an emergency like no other. She warns we could get further economic weakness if this virus takes a double trip around the world. The fund saying asian growth will grind to a stand still this year a look at the european stock market we are now into the trading session. Weve warmed up. The market is in much of the green. What we saw was a reversal of fortunes to the tune of 3. 25 fairly decent selling for the german stock market. These markets also bouncing. Investors still weighing on very negative data. Youve got a glow from the United States to markets well weather retail pressure. The ftse in italy holding on to the strongest gains 2. 3 higher and down about 4. 8 pes recovering about half of that territory. The French Market 1. 1 weve been talking about the easing of restrictions in germany. It does feel as though the markets are warning and will maybe exit with cautious moments in place coming into the pandemic and one of the later to move out of it this market reverses yesterday by 4. 2 . It is a modest increase in strong markets finally a bright day for the sector we talk about exit from lockdown, it doesnt necessarily involve an exit from travel and leisure. Restrictions on travel unlikely to stay in place for many months tui 1. 7 carnival also a bright spot on these boards today easy jet, a stunning reversal as it claws back 6. 4 talking about a strong cash position over the next few months a couple of red ink charts with lufthansa in the rest. Banking stocks, those u. S. Banks starting to chart the course for what may be ahead for the european banks it takes us back to the financial crisis to mortgage portfolios and how soon it may be until recovery. What weve got across the banks here, barclays up 2. 3 ubs 1. 2 very interesting numbers those banks with strong Trading Divisions because all of that market activity saw a stampede back to the trading debt and equities over march in particular that was a real boost for major investment banks technology names, strong for asmi, asml almost 5 new data shows u. S. Sales and output reveal the toll on the economy is worse than feared u. S. Sales slumped 8. 7 in march. The worst since this began auto sales dropped 25 , retail clothing sale down 50 restaurants and bars down as well Industrial Production fell 5. 4 from the previous month as factories were closed down to protect workers. That is the worst month since 1946 imf managing director has told cnbc that half of the funds members have requested bailouts they still expect the economy to grow by 5. 8 unless the virus takes a double trip around the world and unless they dont find a vaccine. Translator provided that measures to contain it are successful and we see a rebound in the second part of the year, next year, they would be a boost. Minus 3 next year, plus 3. 8 next year. Dont be fooled. We would still be below 2019 even if this projection materializes that could be worse if the virus is going around the world. The imf has warned asia will come to a complete stand still for the first time in six decades. The impact will be severe and unprecedented. Citing the effects and saed weakness in china would weigh most heavily on the region a look at the asian markets. Some there saying we have not seen enough support in the form ever stimulus. Modest stop side for the chinese markets. 5 million americans are expected to have filed for unemployment new weekly claims topped 6 million. The u. S. Will have lost as many jobs as created since the financial crisis the figures were released before u. S. Markets open up today President Trump says the country has seen the worst of covid as plans to reopen the economy pushing for some states to reopen by the first of may. The data suggests we have passed the peak on new cases hopefully that will continue and well continue to make Good Progress these encouraging developments have put us in a very strong position to finalize guidelines for states on reopening the country. Joining us now, keith nice to have you on board with us let me ask you where we stand in this crisis in terms of markets. You penned an article saying you thought we had reached the peak of maximum panic where do you think we stand on that market psychology at this point . I think what weve seen is a very strong bear market rally. If you look at world index, it is 22 up from the low of 22. 5 increase in the u. S. Compared to where we are relative to the peak in markets, we are down about 20 across the board. You are almost on that cusp of bear market and correction territory. So i think we have passed the point of maximum panic but i still feel given the numbers we saw yesterday and the numbers we are yet to see in earnings, we have yet to hit peak pessimism full credit to the authorities for acting quickly and swiftly i feel that this is a classic bear market rally. With comments that this is going to be the worst recession weve had since the 1930s. Do you worry that the market is not gauging correctly the structural Damage Companies will face at the end of this pandemic i think the first thing to say is look, there is 20 down, there is a lot of bad news already in the price i think what we will see as we roll out through the Second Quarter is worse economic numbers. Those are pretty horrible numbers we are in for march in the u. S. Well start to see the impact on corporate earnings and the corporate sector again, the numbers we are looking at for the moment are the First Quarter. So, i think there is still some gloom to come. Good morning to you the iea with the royal predictions. Everybody is penning their hopes on an end to the lockdown gradually and a return to a degree of normality in the second half of the year. Does that leave equity markets well valued or over valued if that is the base Case Scenario and you get a good bounce back they are reasonably well priced. You are hitting the nail on the head here. Economics is the consequence of the impact of the virus. The extent to which we can get past those peak viral issues are by far and away the Biggest Issue for us i guess of course huge questions for you and the Management Team about what you do next as well. Is active outperforming passive in this environment . Or is it just too tough . Because we are seeing these huge moves and it is leaving subtly out of the way is. It is a time when active manages come to the forehere given what we speak, certainly value being created in the relative shifts in equity and credit names actually, it is a time to be active in terms of doing your research, in terms of picking your stocks. Of course, we will only see the benefits of that active management in action, so to speak, as we see when we come out of the other end the other thing i would say is incredibly important is that we play our part and we are active stewards of the businesses that we run not that we run, that we own that is really important because the industry has a role, i think, in helping corporates manage through this crisis let me ask you. There is a feeling about fees and criticism there and charging fees for some of the funds hahave that have been suspended what does that mean for the industry, everybody will be left standing at the end of this. So do you think it will be more consolidation through the track . Those are Great Questions obviously, we are an industry that charges add valorum fees. So the impact is pretty clear to see. You can see the analysts in the sector have been marking to market so the Asset Management sector has seen quite substantial fall in its price, its pe thats reflecting the revenue challenge. The extend to which we are able to deal with that will do with the strength to your Balance Sheet. Weve moved into this with a pretty strong Balance Sheet and the extent to which those fees recover is absolutely dependent on the market looking across the valley once we know that we are past peak virus. I think some markets have put aside the dividends. For the likes of tom moore, who we are big fans and other income investors. Is income and dividend becoming a moral issue whether yield is sustainable that has been the traditional thought pattern. It seems to me, it has become an issue of morality for the scribes. If its an issue of more at, there is a group that are dependent on this income for retirement so actually when we as a board took the decision that we would maintain our dividend and take that to the agm, we were very mindful of when well have the financial strength to pay that and second, there is a real need in the moral imperative to support income in society. Those companies that can pay because they have the financial strength and wherewithal to do that should be paying dividend if your Balance Sheet is not in a good place and the choice is not in closing down or taking action, then we are encouraging people to actually dont pay the dividend put the long term outlook over and above what is happening in 2020 it makes it a tough market for income funds one of the things we will do i know tom is very focused on the long term. There is this balance between Economic Impact and your stewardship. For those who can, i think there is a moral responsibility to pay. Work from work for you. It looks like you are in the office i am in the office this morning. I have a whole series of meetings overseas which i need to connect thank you for your time this morning. Ceo of Standard Life still ahead on the show, chancellor Angela Merkel is weary of calling this too soon there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Shbecause Xfinity Mobilehen ygives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 200 off when you buy an eligible phone. Thats simple, easy, awesome. Go to xfinitymobile. Com today. You are watching street signs. Breaking news out of ford today talking about trying to resume production in germany from may 4. Automakers talking about getting back to business as Angela Merkel discussed coming out of social distancing soon and allowing smaller shops to begin reopening as long as they adhere to strict rules it is very cautious and very gradual. Thats what Angela Merkel emphasized yesterday they are undoing some of the lockdown measures. Every two weeks, they are going to revisit with respect to infection rates. It is a very gradual approach. First, well see the reopening of smaller shops like book shops that have less than 800 square meter in space essentially, it is a partially reopening of shopping space and big cities but not restaurants, not bars or theaters all of that will remain closed until further notice again, very gradual and very cautious no one is saying this is the victory over that virus spread in germany take a listen to what she said yesterday in the press conference, Angela Merkel, the chancellor of germany when she was explaining the move and why we should remain extremely cautious translator what we have achieved is an interim success no more, no less i emphasize it is a fragile interim success. Thats what we have been told today, we have developed the factors that make a stake for this in a good direction we dont have much room to waiver either. We must continue in a cautious manner we cant overburden the German Health system as well currently, the german capacity for emergency beds and ventilators. The capacity is still very high with the infection rates going up there is risk when reopening that this is going to spread more rapidly thats what the government is concerned about. Thats why we are seeing a gradual reopening of the schooling system that people can go back to a proper working life as of now, public gatherings will be prohibited it is not allowed to meet a lot of people in public. Just two are allowed or your family that will remain in tact the corporate world can reopen step by step but it is not a big bang no need to rush to the finish line when weve seen reinfections in some of the asian countries. The uk government expected to extend lockdown until early may. What we are hearing is suggestions we may be making rainbows and putting them in the windows another three weeks . Yes quite frankly, weve seen better numbers but still devastating. 781 hospitalized covid19 deaths plus those in the care homes the numbers have been consistent thats the best one can say when we are talking about mortality rates. The good news is hospitals treating patients in the uk is down 1 . In london, which was considered the epicenter in the uk, down 5 icu beds as well professor chris witty saying we have not hit the point but we can safely say we are past the peak t opening up the economy and schools and what have you, very, very important but i think they are not quite there yet. It seems the safe money is a gradual return to work for the end of the first week of may talking about another threeweek extension. A lot of businesses getting going. Contractors out there. Burger kings will be opening soon two in bristol kfc have reopened 11 restaurants. A nod to the military and navy giving those towns some delivery demand for anything that is not home cooked at this point. Coming up, troubled waters the u. S. Military has an encounter with iranian ships as tensions bweeten the two grow. Welcome to street signs. These are your headlines Risk Appetite returns in european trade and u. S. Futures turn higher. Auto stocks return to gains after volkswagen says it will return next week and return to being bullish. And u. S. Jobless claims out today after retail sales and jobs plunge. Alphabet freezes certain investments starting with hiring the google parent is not immune to the pandemic crisis we are an hour and a half into the trading session from the outset, weve had green splashing up to the market the ftse mib 2. 2 higher it was close to 5 some of those losses solid across france. 1. 3 on the dax halting on the gains today. Slim ranges for the uk stock market keep in mind yesterday, it fall and is also trading negative weve seen a flight to safety in support of the u. S. Dollar weve got 99. 83 on the index euro, sterling also worth taking a look at some of the commentary out of australia does beg the question if the crisis is deeper than anticipated, do we need to consider negative rates, what does that mean for the United States oil markets, we have seen a little pick up from some of the lower levels with he saw yesterday. Back to the 19 level we have a balance of 1. 8 . Brent also getting a slight pick up of 1. 4 european yields to that flight to safety in the treasury market the bunde is up. Guilt lifting up a little. And in italy, a little nudge down we had popped above the 1. 8 level. But slightly reversing this morning. U. S. Will be quite key we are chasing the jobless claims and the psychology expected for those tapping into unemployment the dow with a strong build before the start of the session. Around the bank of england, what we are experiencing across Financial Companies is worth noting Credit Conditions survey conducted between march 2 to the 20th showing the impact on expectations showing mortgage and corporate earnings expected to rise. Quite a reversal from what we were seeing in the last snap shot in january. That survey coming through at that key point in time in other news, g 20 finance ministers have agreed to fault payment from some of the slowest payments they agreed on the decision. The global meeting was run by saudi arabia which runs the minister welcoming the move discussions today resulted in an enhanced imf support package and implementing urgently by the support. Amounting to u. S. Dollar 200 billion. Ministers and governors have also taken additional measures to develop lines and reboot facilities by Central Banks. Imf managing director has told cnbc that half of the funds members have asked for bail outs labeling the pandemic an emergency like no other. She says the fund has been quick to add funding and said everything is on the table when it comes to responding we have 1 trillion lending capacity a reminder, prior to the crisis, it was four times less it was 250 million. That really makes a difference today. With he were able to immediately deploy emergency finance, double access for our members so 102 countries knocking on the door of the imf for lifelines can obtain rapidly financing also stressed that times would be tough for eu markets. Right now, we are shutting down the average european economy, onethird is shut down. That means for every month that goes on, it would cost 2 of european gdp we assume we could start gradual normalization. If we cannot start a gradual normalization by midyear, that would be a renewed shot down passing until now when a vaccine has been found and effecting treatment, then it gets much worse. I thought the imf packed a punch yesterday seeing a Great Lockdown investors knew it would be rough. In recent times, it would be difficult to weather and wed see the context around the extend of the decline. Yes it is important the imf will continue to tell us how seriously they think this virus is going to Impact Global growth one of the challenges, i know they have been working to relieve the pressure on members struggling at this point one of the challenges for her is that the imf like many bodies largely relies on the largeness and generosity in this situation, it is difficult for the managing director to get particularly the United States to agree on some of the dispersements it would like to make back end of march, they sought to raise an additional 500 billion through the rights they have which are effectively given to them by members the United States has objected to additional fundraising and continues to object and doesnt want to see that money dispersed to china, and iran that is understandable given that imf is the largest source of funding that does limit what the imf can do at this stage to ease pressure on countries. She has lobbied very hard. We saw the go20 freezing. The Bigger Picture is are they able to distribute more money to members asking for support not at this stage. Not without the say so of the United States and without other key providers of funds and if we see a second and third wave of the infection, what is the response then. Having enough stimulus in place. If there is a second infection, you have to say they are back to square one you Start Talking about those poorer countries the imf is trying to support. A w scenario would be very damaging to the economy, i would think. Absolutely. Thats why it is so critical that lockdowns are eased gradually and that we have, perhaps, sensible plans that look similar by countries with significant levels of infection. Nobody wants to see a s asymptomatic carriers boarding planes there has to be a plan of how everybody should react if we see this resurface in the autumn they have now built in that we would see a return of the virus in the autumn. Critical is perhaps some coordination on the question that weve seen the National Government respond to this virus. Perhaps there should be some coordination on what there should be done in terms of easing restrictions and make sure there is no more cross contamination if we get a second round later in autumn. This is unknown territory we are dealing with i think most people are looking to china for some hope there there are other countries in asia destroying optimism singapore, japan talking about widening the lockdown to nationwide clearly, there is the potential for reinfections to flair up again. Are they considering the prospect that are negative rates that they had before new zealand was talking about that should they have the attention to the United States i dont think it should be a red flag to the United States. At the end of the day, governments and countries must choose what is right for their own circumstances. Just to note the comments about singapore and other asian countries. That plays to the point i made about needing to be careful. If you look at those cases of new infections emerging from the first round, they were returning students from western countries or travelers who were back home and brought the infection back with them and began to lift the count again. On the issue of key recovery, the key largely is that governments and Central Banks have to manage conditions for their own domestic situations and they have to find a way of cleverly allowing Economic Activity to restart without compromising health. Morgan stanley is up next on the u. S. Earnings season as we get more from the lenders state side well take a look at how the rest of the sector is fairing after this save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Apple has unveiled a new cheaper iphone released without the typical fanfare. It costs 399. It carries the same name launched in 2016 the tech giant has been hit by delays and has warned on revenue for the Second Quarter google says it will slow hiring for the remainder of the year. The ceo told employees in a memo, quote, just like the 2008 Global Financial crisis, the entire Global Economy is hurting. They will maintain focus on strategic areas. Lvmh with disappointing numbers. Is there a feeling you perhaps give everybody equal help. One of the Strongest Companies in germ stiany still looking top assistance originally, there were reports they were going to take on this partal employment scheme, which a lot of European Countries have copied where the government promises to pay at least 80 of employees that has been scrapped weve heard from the french government that companies should not pay dividends. If they pay dividends, they would not benefit from the state aid. Here they pay the dividend, some of the biggest ones and they dont want the government having an eye on their affairs. They have both announced they will not take this on. Well hear after the close of the market what they postpone through june beyond that, they have both warned on sales at the end of march and said their sales would be down 10 to 20 these luxuries have been the Chinese Consumer they are down partially in the beginning of the year. We have seen the impact there. Then europe and america closing in the middle of march there is a way q2 could be worse than q1. Asia pacific was first region in revenue for the first time last year we see here comments the ceo said the beginning of a recovery in china. We see this is console i hidati. Whether seeing the lockdown and people staying home whether there would be an eye on that. Looking at weakened brands that have done well top brands are doing better than smaller brands well get comments tomorrow with the ceo of loreal jeanpaul agon at 9 30 cet thank you. Morgan stanley set to unveil results. The last big u. S. Bank to report earnings after a warning of the damage caused by the pandemic. See a lot of this in the coming weeks. Miss, miss, miss this is the biggest american lender that set aside 5 million to shore up finances b of a expects to see negative growth into 2021 citi posted loan reverse when it comes to Goldman Sachs a report at the key Trading Division and talked about being effected by economic dislocation. If you take a look at some of the movers, Commerce Bank Higher Deutsche Bank 3. 6 and also across to credit ag with a pop of more than 2 . John will join us Research Analyst. And geoff on the line too. 12. 8 billion in the First Quarter for loan losses. There was a lot of guesswork do you think the banks are being conservative or the very opposite at this point i think everybody is trying to run with all the numbers as developed. The numbers have closed up and theyve changed since then i think the banks will keep the pace longer than these how long will this provisioning go for . Youve got banks trying to tap the Government Schemes it is taking a little time for assistance to reopen does it feel as though there could be a number of quarters ahead where we talk about provisioning and losses . Thats right. Banks have been clear to provision over the fortnite. We would be surprised if we saw the same again in q2 provisions will be quite high. Seeing a shift in the chargeoff. Probably slightly lower reserve. It really depends how quickly the u. S. Could get back to work. You have to balance that with the health and safety with the economy. It is a difficult balancing act. Setting aside the provisioning i was impressed with some of the numbers with the likes of Goldman Sachs around the markets and citi in terms of general business activity. My question to you is, look, it is a black box are these banks in a resilient enough position now that they are actually well placed to deal with whatever comes down the pipe i thinks that exactly it. If you look at what they say, it is a preprovisioned market certainly goldman has strong trading numbers. Three of the four have revenue at 3 or 4 citigroup also as youve pointed out with strong trading numbers and efficiency has dropped down. The key things the banks are looking at here is covering the earnings i dont think investors should look at the buy backs. Theyve canceled them through the end of q2 anyway you shouldnt get hits into the book value of the companies as with you move through. That can deter it for a little bit and it might take higher provisions at least the u. S. Banks are generating preprovision numbers and that should be enough to tie them through briefly, who do you like . Who do you own in the space at the moment i think a number of the banks are fairing pretty well. We like citi group that is expected to generate absolute losses and hit into their capital. With he dont think that will happen we think they are very well placed we also like morgan stanley. They are reporting later on today. We think the trading numbers there will be good too it will take higher provisions but again trading on a higher dividend john, thank you for joining us Research Analyst Atlantic Equities for goeoff and myself, thats it for us today we are expecting 5 million to mbs. Ck those unemployment nuer Worldwide Exchange is up next. Shouldnt you pay less when you use less data . Now you can. Because Xfinity Mobile gives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 200 off when you buy an eligible phone. Thats simple, easy, awesome. Go to xfinitymobile. Com today. Breaking news, stocks look to bounce back after tumbling on the onetwo punch. President trump set to unveil new guidelines to potentially reopen america claiming the u. S. Is passed the peak of the coronavirus outbreak markets bracing on the impact to the u. S. Economy bracing for millions to file unemployment it is thursday, marc

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