Go higher. The crash stride an hour away. Lets get your top headlines off the bloomberg terminal. China p. M. I. Data Beat Estimates but it is a mixed picture for asian stocks and u. S. Futures turned in the case negative. The w. H. O. Said the coronavirus outbreak in europe may be approaching its peak but across the atlantic new york city reports a 16 increase in deaths in just six hours. Plus lenders from howards bank to unicredit halts dividends at the request of the b. B. C. Well speak with the chair to have Advisory Board in just over an hour. We do see futures positive here. Certainly in germany. 3 4 of a percent. Up on the dax futures. U. S. Futures we pointed out are down right now. Of course that can change. Volatility is the name of the game these days but we see a little bit of a split in terms over the risk indicators. Anna, what do you see from your g. M. M. . Anna before get to that, lets get to breaking news. We have numbers coming through from shell. They are talking ookts a new 12 billion reinvolving credit line commitment. They say they have available liquidity that will rise from 30 billion to 40 billion. Shoring up oil giant Balance Sheets seems to be the name of the game. They talk about the dividends. It is going to be something that many in the Financial Community are going to be talking about over the next year or so. Where the dividend goes in the near term and the longterm perhaps. They are expected to be lower. They see a q one post tax charge in the range of 400 to 800 million. We heard just last night about how they were walking away from a multibillion dollar gas terminal. That was planned for louisiana. The pandemic driving demands, destruction story as well. We know the Oil Companies are very much under pressure and we have seen much Weaker Oil Prices as a result of that. Let me just get to the g. M. M. A more positive picture coming through. In all, the asian sector has been pretty mixed. Mixed asia. U. S. Futures mixed negative now. Nasdaq futures look fairly flat. Are we going to be disregarding the bounce we have seen in china Manufacturing Index . Well get to that conversation a little bit later on. We see that supporting crude prices. Oil prices more secure this morning than they have been. Global stocks set to end the quarter as their worst quarter. It has been a very volatile month and quarter. New york city reported a 16 increase in deaths in six hours. They emerge as the new epicenter to have coronavirus outbreak and europe is expected to start stabilizing soon. The World Health Organization has given that assessment. Italy saw the slowest rate in new cases in almost two weeks. It is interesting. Asian equity markets making small moves to the downside. U. S. Futures look pretty stable. Todays trading environment not at all reflective of the month that was and the quarter that has been. The extovente volatility we have witnessed has been incredible. Investors are hopeful that the worst days are behind us but ultimately it takes quite a bit of time for marks to bottom. There is still great deal of uncertainty out there. I would expect this volatility to continue. Really a lack of clarity in terms of where markets are heading. Overnight we did see that quite firm surprise p. M. I. Coming out of china. We are seeing mixed reactions to that. Ultimately when we strip away from the headline indicator, there are still a number of headwinds. Given the fact that ultimately the market that continues to be a challenge in terms of trading and global demand. It is a positive indicator but i dont think it is too much to get excited about. Matt we have just seen headlines out from w. P. P. They are suspending the 950 Million Pound Share Buyback. We have been talking about banks doing away with dividends at the request over the e. C. B. Is this going to be a market wide phenomenon that companies are going to be canceling dividends, suspending buyback programs, stopping shareholder payouts . What kind of result do you expect that to have . Ultimately this is going to have a greater impact in terms of European Banks. They tend to be more dividend focused opposed to what we see in the u. S. Ultimately this will shore up more capital on their buffers if they dont pay out the dividends. When we look to European Banks specifically, their Balance Sheets are stronger when we go back to preglobal financial crisis. We are in a situation where we dont annoy the duration of the impact on economic activity. Ultimately if we do see companies default, if we see households become more yes, these dividends are likely to provide a lift in the near term for shoring up Balance Sheets but there is still a great unknown in terms of the outlook for the European Bank complex. Anna i suppose everybody in markets is trying to get a handle on how deep the recession is going to be in various parts of the world and how long the tail to that will be. How long lasting will the effect be . Interested. The coronavirus outbreak in europe may be approaching its peak. I wonder if that starts to give investors some comfort and if they can pencil in how deep the recession gets. Do you have a sense over the timings that the market is looking at . At this stage, it is that pace of increase in terms of the infection that is going to drive sentiment. We begin to see the slope, the flattening of that socalled curve that will provide some support that we could see the economic activity. Ultimately though, i think Economic Data captures the magnitude of the depth of the crisis is not likely going to impact markets. Even when we see the economy coming back to some kind of form of activity, it is hard to gauge whether well see this bounceback of whether sentiment will continue to be strong, whether the stimulus packages a certainly it will be something that will propel risk support Risk Appetite in the near term if we begin to see stabilization in terms of inflection rates. Matt thanks very much. Laura cooper from the n. Y. Blog. You can check out the blog by checking out nylvgo on your bloomberg terminal and contribute to the question of via the f you like bloomberg terminal. Today were asking when will data matter to assets . Reach out by typing ib plus tv go on your bloomberg. Up next, mirrororing the peak. Could europe be turning a corner . The World Health Organization seems to think so. More on that story. This is bloomberg. Anna welcome back to european open. 50 or so minutes until the start of the european trading day. A little undecided as to where we head. Markets could be a little bit more optimistic. Looking at u. S. Futures is any kind of guide, u. S. Futures down by. 1 to. 3. Here are your top stories. The u. K. Government is facing renewed pressure to speed up virus testing. There was confusion after the government said it hit a target of 10,000 tests a day but Health Department statistics showed only 7,000 people received them. They said it was because people were tested twice. The u. K. Is falling behind its european testing piers in terms of testing for the virus. The emergency rules pose no threat to democracy but opponents the e. Sumbings probing the erosion. The white House Democrats are preparing for the fourth round of stimulus. Officials can compiled lists of request from government agencies. The proposals include more state aid as well as Financial Assistance for Mortgage Markets and the travel industry. Chinese manufacturing rebounded in march. The coronavirus outbreak spreads in the rest of the world. Despite the improvement, output remains far from normal. China faces a slump in external demand. Powered by more than 2700 journalists and analysts in more than 120 countries. Matt . Matt thanks very much. Now the virus could be approaching its peak in europe. The World Health Organization said there are signs of some stabilization in europes outbreak. Hardest hit italy reported the smallest number of new cases in almost two weeks. A number of other european nations are moving toward tighter restrictions. Pain is announcing further curbs to public life. The e. C. B. Boosted its asset purchases last week. Or more, our reporter joins us now. Have we turned a corner here . Matt, that is the question. If you look at the daily number of cases and daily number of new cases, that would senate that auld signal at the very least lag. Between someone catching the coronavirus and dying from it. It is best to look at how many people are sick. That has slowed. Having said that, i would not say that youre going to see this crisis of course be with the space of just weeks. Today we have a report in the italian media suggesting that the lockdown will be further extended until may 4. When you look at the situation in spain which is the other big focus point in europe, you have a horrible week last week. A Record Number of deaths but the numbers are improving in madrid and that is a focus point of the government saying they do see signals that the numbers have become stable. Anna we watch the infections and are very aware of the way the infection numbers can be changed by testing policy over time and between jurisdiction. Let me ask you about what the e. C. B. Is doing here. The asset purchase program. Any latest information on that . We did have data on that. What youre seeing is the European Central bank is very active on the bond market. They bought a Record Number of debt last week. That went up by 40 billion euros. That probably explains why youre seeing the bond yield in italy and spain in a week, with a higher number of deaths. It is very active and there is a total the policy we had from the Central Banks, Christine Lagarde said my job is not to bring down the yields. You look at the data and the market reaction, that is exactly what the European Central bank is doing at this point. Anna thanks very much. In brussels with the latest on europes fight against coronavirus. Joining us now is the head of he Equity Capital markets at u. B. S. Raising money must have been a fairly Peaceful Place in a sense of late because the conditions maybe havent been right for companies to come to market. Do you see what is the latest state of play for european Equity Capital markets . Thank you. We have seen a change in the business mix. In a normal year this would be peak i. P. O. Season in europe and probably the reason that part of market is on hold. Were spending our time at the moment looking at potential for primary raises whether it is through the shortterm block trade to really raise primary capital for companies that need additional equity at this point in the cycle. Matt how is liquidity for that kind of business . Actually it is pretty good. I think there is a group of investors you have a longterm duration who have been effectively waiting for any kind of pullback as an opportunity to put money to work. Also there is a group of Hedge Fund Investors who have capital and are willing to look at doing that. I think we will see reasonable appetite for this story as long as corporates can really convince them that the amount of capital being raised is enough at this point. Anna let me ask you about the underlying conditions, the i. P. O. S a it this point. Volatility is not necessarily a friend of the i. P. O. Market. I was looking at the volatility and see the 90day volatility. Below level wes saw during the financial crisis. Is this the kind of thing is it volatility that they see markets for you . Yes. I think investors were talking to are looking for three phases. The first phase is the derisking phase. There are signs were at the end of that. The second phase is stabilization and the third recovery. You have to be in the latter stage of the stablizeation and into the recovery phase. If youre looking for metrics in the market that help, the vix index is right. You will probably see closer to 20 rather than 60 currently and we like to look at the credit market and look at the high yields. Matt what are the biggest problems now . What are your biggest concerns on a typical day . I think the market volatility is clearly the front and center of that. And then secondly, it is trying to judge investor positioning. At this stage, we dont know the duration of this crisis. It is very hard to understand what underlying earnings look like. Youre much more focused on a daytoday basis on technicals. The retail selling we have seen has potentially stopped. Were seeing positive signs of Pension Funds rebalancing into equity markets. I think it is shortterm a focus on technicals. Matt how are you doing with staffing, people on trading floors. People working from home, etc. . We have backup facilities in place. It is a balance between a few critical people being in the various offices that we have in locations and were using the backup facilities that we have and with technology as it is, i think the working from home model is continuing to develop but so far has been fairly successful in terms of allowing people to work a fairly orderly day. Anna i know you talk about the different stages here and were probably still in the derisking, you mentioned stabilization and recovery. Do we recover the Capital Markets that look exactly as they looked before this crisis or will they look fundamentally different . I know this is a question that requires a thesis and maybe a lot of thinking. Is this a conversation that is being had at the moment . I think it is a gradual phase. What were focused on is engageing with our clients, understanding what their objectives and shortterm needs are and trying to balance that with investor activity and investor appetite and i think it is really looking to the secondary markets for signs of stabilization which will allow us to go to the help and corporates, suspending dividends and buybacks and looking at the tools they have available to raise money and were splitting that into two categories. Tactical shortterm and then more longer term, actually what should their Balance Sheet look like and what are the right tools to get the equity balance right under the longer term . Matt if i went through the list of companies that suspended buybacks or dividends today, we would not have time for the rest of the program. Is that over for now . Are dividends and buybacks done for the time being . What are the self help measures that you have . Suspending your dividend, stopping any Share Buybacks, see how the situation plays out and then you can either go back to paying those dividends or go back to Share Buybacks. Obviously the levelses for buying back shares at the moment are pretty attractive in most cases. You have to look at the tools available and what you can do yourself relative to what the is saying. Matt as well as the naming and shaming youre going to get from the political level. Thank you for joining us. Gareth mccartney. Great to get some time with you. Speaking over the political level in some senses, were going to be speaking to chairman of the e. C. B. Bank Supervisory Board about bank dividends. Not to say that he is political but the things that he says will be certainly discussed at the highest levels in berlin, in london, in paris. Dont miss that interview at 8 00 a. M. U. K. Time. Coming up next, as europe is set to stabilize, the u. S. Is emerging as the new epicenter of the coronavirus outbreak. Well be bringing you the latest news from the virus in new york. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are just about 35 minutes away from the starts of cash trading on a day when the World Health Organization says the coronavirus outbreak in europe may be starting to stabilize. But over in the u. S. , the number of cases and the number of deaths is surging day on day. President trump seems reluctant to follow europes lead and introduce a nationwide lockdown. Here is more from new york. Good morning, matt. Thats right. New york state is one of the hardest hit for the pandemic in the united states. New york state alone, the death toll rising 26 for coronavirus led deaths just in over a day. New york city, that number was up 16 in just six hours. Now the u. S. Outbreak is not expected to peak for another two weeks according to projections. The situation is very likely fluid. Donald trump is saying that the u. S. At the moment doesnt think a nationwide stay at home order is needed but that can obviously change and just yesterday we had maryland and virginia ordering those and here in new york were seeing a lot of help is on the way. Usnc come ford is in the new york hor borrow provide regular leaf for some of these hospitals. Anna thanks very much. Joining us from new york with the latest. Up next, could the coronavirus pandemic have been prevented . Well bring you our interview with the black swan author. Interesting to get his thoughts on the pandemic. This is bloomberg. Nowadays you do more from home than ever before. The xfinity my account app puts you in control with Digital Tools to give you the help you need when you need it. Get fast and easy answers with personalized help 24 hours a day, 7 days a week. Change your wifi password to a phrase thats easy to remember. Even troubleshoot your services on your own. Were working to make things a little easier for everyone. Download the xfinity my account app today. Matt welcome back to the european open. 30 minutes away from the start of cash trading across the continent. We have gains in futures in europe and the u. K. Looking at awe are turnaround there. All futures pointing higher this morning. It could ea risk on start to the session. Ae coronavirus pandemic was preventable event according to the former options trader that predicted the 2008 financial crisis in his book the black swan. Here he is speaking to our own erik schatzker. It was a white swan. September 11 was a white swan. It is no excuse for companies to not be prepared for them. And no excuse for governments to not be prepared for Something Like this. Jinnyjoining us now is yan, chief china economist at Icbc Standard Bank. From your perspective, do you agree with him that this was for the western world predictable, preventable . Have reacted more quickly after we saw it start in wuhan . Jinny even china wishes that ofhaps there were more words warning that this was happening. I dont think anyone could have expected the extent of economic damage that this epidemic has had. I think china, although was very frontto react on a policy , many countries have found it quite challenging to react given the Global Economy was already slowing down even before the virus situation. Anna let us get to the latest data we have out of china. The manufacturing pmi with a stunning recovery from record lows. Jumping to 52. We are showing an image that shows a very vshaped rebound in the data. Data and thatt can rebound strongly after what we have been through without taking the economy fully with it. What is your take on the latest data . Jinny when we read survey data, it is important to note that this tells us how confident manufacturers and nonmanufacturers are about the outlook looking forward. Both manufacturing and services are looking positive indeed, however, we have to remember that the activity began to recover at the beginning of march. If we are looking forward in numbers the industrial and the recoveries in other business act committees particularly when it comes to retail sales that data will be out on the 17th of april. To be frank, i think it will take some time before we see that vshaped recovery that people are hoping to see in the Economic Data. Matt when we have consumer is coming back post crisis with a lot of debt they had to take on to get through it, does that hinder a vshaped recovery . Or are there other things that will hold us back from a strong recovery . Jinny debt is a worry and it has been for a while particularly if we remember back to the financial crisis. Post financial crisis, we are still living with that underlying debt, particularly corporate debt. The Risk Appetite is reflecting that bitter memory of what happened after the post financial crisis. And banks are still dealing with some of that risk. And more challenging is that thecymakers are focused on market. The manufacturing pmi data shows an extension on the employment component. 2017,e First Time Since that is very interesting. We see that the micro enterprises, private sector are still seeing a huge challenge when it comes to layoffs and keeping people on their jobs. From a policy perspective, beijing will be keen to support jobs growth. It is important for social stability and the chinese model. Employment in services and construction still seems to be contracting in the latest report. Bringing the Services Sector back which require so much confidence from consumers will be more of a challenge may be ople backing pe into power stations. Is moreonsumption important than gdp growth. At the politburo meeting on friday, they highlighted that consumption would be a key component of supportive measures. We have already seen support for the auto sector. We see that more policies will be broken out including tax cuts. About anon really is underlying confidence in the outlook of the economy. Growingl Income Growth relatively slowly in recent years already come i think that will be a tough challenge for beijing Going Forward this year. Matt but you do expect more stimulus out of beijing Going Forward. I wonder if there is any possibility of helicopter money to induce consumption . Jinny i think that is not really the emphasis of the stimulus. And by the way, i think stimulus heavy of a term. Q1 gdp may be negative. The targets for this year are likely to be quite different. Around 5 . Q4achieve that means that q2 have to be a bug target. Policies have to be rolled out to see those numbers appear in the date of this year. I do not think helicopter money is the priority for policymakers. , what isthe contrary the priority is to boost confidence, stabilize jobs, and fiscal powers. Those, in the form of special central governments investments and issuances. These are for a special purpose projects. New infrastructure. That will be very important Going Forward. Anna jinny yan, chief china economist at Icbc Standard Bank with an analysis of the latest data coming out of china. Is thinking of selling its stake in the pipeline unit. The Worlds Largest producer needs some cash. The company reaffirmed its commitment to pay 75 billion in dividends this year. It also has to make its first installment in its acquisition. A group of banks are stuck with 23 billion of loans to finance tmobile. The coronavirus outbreak disrupted the plans to sell the debt to thirdparty investors. The two companies have to finalize the longawaited merger. Johnson johnson cert Johnson Johnson shares surged after an announcement that it is developing a vaccine for the coronavirus. Have earlycould doses ready for emergency use as soon as january. That is your Bloomberg Business flash. Matt coming up, why blackrock boss thinks there will be a fundamental reshaping of finance after the coronavirus. That is next. This is bloomberg. Anna welcome back to the European Market open. 7 41 in london. Start ofs to go to the the trading day. European futures to the upside. And u. S. Futures also pointing higher by around 0. 4 . Blackrock Ceo Larry Fink says as dramatic as the coronavirus has been, the economy will improve steadily. This situation lacks the obstacles of a typical crisis. Let us get the details from Annmarie Hordern. What were the takeaways from the letter to shareholders . It was about Climate Change and now it is about the coronavirus. What he is talking about in the start of the letter is the fact that hes hard it working it out while he was in office. Now, he is writing it in isolation. In my 44 years and finance, i have never experienced anything by this. The outbreak has impacted Financial Markets with a swiftness and for r. O. E. City ferocity of a crisis. He says this will change the psychology of how investors invest. The as our infatuation of just in time supply chain and our reliance on International Air travel. He says consumption will change as well psychology. An interesting letter. He is also talking about what is going on with the Central Banks and their swiftness to act. Matt blackrock was tapped by the fed to help with the latest stimulus programs. He talks about this in the letter saying he is proud to be tapped by the fed along with the bank of canada. The fed also asked him to act as an advisor. Overseeing three debt by in programs. Buying programs. Nk was also speaking to the fed. Managingblackrock was 1. 7 trillion. Guess how much they are managing today . 7. 4 trillion. Pretty astonishing. Matt that is a heck of a lot of money. A be he met. Emery hard earned joining us for Annmarie Hordern speaking from new york. Another important opinion coming out of st. Louis. James bullard says the u. S. Can afford adding trillions of dollars in Coronavirus Relief debt and it will not hamper the countrys ability to grow in the future. He speaks exclusively to bloomberg. I did want to see pandemic relief. I would not call it stimulus. I would call it pandemic relief. What i interpret the program trying to do is to stabilize incomes and businesses as we thisour way through investment in our National Health in the next couple of months. , we do have at blog on this. If you read it carefully, you will see that there is a way to bind the Unemployment Rate. I think the upper bound is 42 . From 10 . We are identifying vulnerable workers in this environment. What is going to happen is that those workers, some of them, are going to have to seek relief so they can pay their bills through this area. We expect the Unemployment Rate to spike. Let us call it pandemic relief. They can pay their bills and once the virus goes away, we can return to normal. If this all works smoothly and there is a lot in the legislation as well, we will be able to come out on the other side and get the economy rocking again. Wednesday is april 1. Mortgage payments are due. Rent payments are due. Could we have a problem with people not being able to pay their bills on wednesday . That a of course, we are in a crisis situation, but my sense is that everyone understands what is going on here now. It has obviously been the topic but around the u. S. The world. I think people understand that the relief is supposed to be able to people to pay their bills as best they can. There may be some delays. You would expect that in a crisis situation. But body and march, i think there are plenty of resources in this stimulus package to handle what we are going to go through here. The main Street Lending program how will that work . When will it start . Phaset is in the design right now. Point ofrom a firms view, there are two ways to handle the crisis. One would be a traditional way would be to shut down temporarily and send the workers over to the pandemic relief or unemployment line. A lot of that is going to occur. We saw the claims number last week. It has already occurred. And that is ok. The Unemployment Insurance benefits is beef up so is beefed up so they will get close to 100 that they wouldve gotten had they continued to work. If the firm goes in that losetion, they may connection with their workers. Another direction to go would be to go to the Small Business administration and get a loan which is ultimately forgivable if you meet some conditions. Namely that you keep your payroll more or less intact. If you go that route as a firm, you might be able to retain all your workers and when the startup occurs later, you will be able to have the same workers and you dont have to higher all over again and get your business ramped up again. That might be the better way to go for many companies. If companies decide to go that way, we will see lower unemployment and more uptick on the loan side. Matt that was st. Louis fed president , jim bullard speaking exclusively to Michael Mckee on bloomberg. We have a slew of companies out today suspending dividends and buybacks. Probably the biggest dividend suspension or buybacks suspension we have seen so far this morning is wpp. Thereby that program has been suspended as well as their final dividends. Akzonobel isingly, out with a statement saying they goal. Spending their 2020 when you say you are suspending your financial ambition, i feel it has a broad meaning. Anna anyone wrestling at home may be suspending their ambition but in terms of hearing that from corporates, ericsson is also interested. Saying the 5g market is growing faster than most analysts had expected. They have notr seen any Material Impact on their business. Points to how difficult it is to break contracts in that industry. Do they have more visibility in that industry . And a lot of people need these telecom surfaces services. Matt another question to add is does this mean that businesses and maybe National Governments are steering clear of huawei instead of ericsson when it comes to 5g contracts . Goldman sachs touts companies that is likely that are likely to buck the trend when it comes to dividends. This is bloomberg. Anna eight minutes to go until the start of equity trade in europe. Dividends for Corporate America are set to fall by 25 . According to goldman sachs, there are still a number of theanies willing to buck trend. Dani burger has your morning call. It is amazing the number of companies we have seen this morning alone cut dividends in both europe and the u. S. Companies are increasingly slashing their dividends. 25 man puts the figure at a decline in s p 500 dividends. A say if you are an investor do not fret. There are still companies reliably giving out payouts. They named 40 companies in total. We dont have time for that but they span every sector. ,n financials, wells fargo, pnc bank of america. You have tech names including ibm. And some Drug Companies as well like Johnson Johnson. Matt the interesting thing is to ask whether they will be shamed out of it eventually. Whether there will be so much social pressure on companies to use their money for things other than dividends. Let us talk about oil. Shell warned the coronavirus was creating major uncertainties around oil prices and boosting volatility. Say they do not expect the pandemic to have an effect on overall demand. Joining us now is the executive editor for energy, will kennedy. This is amazing. At a time when you look at airports, airports dropping their usage 90 . No one is driving anywhere because you cannot cross borders in europe. How is it possible that demand can stay the same in this Current Quarter for oil . Will the first two months of epidemic, there was not a big impact. [indiscernible] there will not be an enormous hit. The real takeaway is that from here on in, it will be catastrophic. Demand down more than 25 . That would clearly be a huge hit on shell and others. We will draw a line in the conversation. Apologize for the quality of the sound. Will kennedy. We did manage to get the Important Message which is that there is a History Lesson from shell. That is interesting itself i suppose but it does not look forward to the rest of the year with oil prices as low as they are. 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 300 off when you buy a new Samsung Galaxy s20 ultra. Thats simple. Easy. Awesome. Go to xfinitymobile. Com today. Estimates,data beats but the who says the coronavirus outbreak in europe peak, butroaching its across the atlantic new york ity reports a 16 increase in deaths in six hours. Enria, peak with andrea chair of the Supervisory Board. Thats coming up shortly . Bit of w this morning a a mixed picture in terms of futures. T least european futures were gaining slightly. U. S. Futures were down. Now we see big strong gains in futures, and u. S. Futures rising up to back them up. We should expect an up open on tuesday. Anna anna futures did resolve themselves to the up side in the equity markets. We have an expectation of some of trade. He start up by. 4 . Always for some of the other markets to get into their stride this morning and to us some of the gains. U. S. A point higher. Up between had. 4 and. 6 . It is the end of the month today. The end of the quarter. Its the end of the financial japan, and that should more. Icate things even if we end up in this forecast, it is a scheduled stop to end has been the worst quarter since the Fourth Quarter of 2008. That is a background context of the modest gains that we are comparison of the European Equity market. 1. 5 . C up the chinese Manufacturing Index, the a big rebound there. Weve got Oil Prices Going higher on that. Of course, as e, ever very mindful of the latest toll that this is taking, not in italy and spain and in the united states. Parker, us now is bob Investment Committee member at wealth management. Great to speak to you today. We talked earlier on during this crisis. I wonder how your thinking is the ing about when we see peak of the crisis, putting aside none of us are have tologists, but you make assumptions about that, but the crisis and what the recovery afterwards will look like i think, first of all, lets start off with china and the think its , and i very clear if you look at the china and out of also south korea, which is very hard hit by the virus. The data points to peaking in early march and the rate of curtailment, as i call it, now looks actually positive indeed if you look at sort of the number of people number of new cases, which is very small. That statement comes with a caveat that there could be an answer to the waves in asia. To answer your question, it ooks as though the peak has rest of china and the ava. If we look at europe, obviously, worrying. Still is there is initial data that the the process of being reached. The countries such as spain and italy. Big uncertainty in those countries is the pace f curtailment, ie how quickly do we see an improvement in the figures. Certainly it seems as though we at or near the worst point at the moment. N the states, obviously, the data remains fairly worrying, few he peak may well be a weeks on but does that mean, bob, that you want to be buying now or you have bought already, frankly, because once the peak means sed, i assume that that the bottom is already passed as well in terms of the market. Well, i think the important at the lets then look Economic Data. Clearly mic data is starting to improve in march in a very weak january and february. January and february, it looks was only the economy operating at about 50 capacity. March that Capacity Utilization number is moved up to probably 75 , so we still go, but as we to saw in the pmi number earlier data is e march starting to improve. I think thats improvement that will continue into april and may. Now, if one looks at europe and the states, the january and recently ata held up well. The march data, obviously, is weakening. To say the fair pril and may data will also be fairly dire. The improvement seen in china ill probably only be seen in europe and the states in probably late may and june . Anna obviously weve seen a lot of response from monetary here. Scal actors thinking about what Central Banks is doing and theyre orgetting Money Lending money to businesses that are going to need to and encouraging hem to borrow even when they might be struggling. Partly because they are struggling. Saw the problems Corporate Lending curve and problems for the future, or is that something were going to have to deal with in the future . The interesting question is what would happen if the Central Banks were not action on lending and utting Interest Rates like the bank of england. What would happen if they hadnt taken that action . Think that we would be looking at amuch more serious position know, ets, and, you whereas the s p for the is down about 1 if and other the ecb Central Banks had not injected liquidity, i think we would be looking at numbers significantly in e than what weve seen the first quarter. I think another point to make is spreads, and its very ignificant that the federal particularly in Investment Grade actually has started to improve ten days. T week to i would argue that has been a response to the action in n by the Central Banks their asset purchase program, some accelerated lending to the banks. What do you think about companies cancelling dividends buybacks then in terms of returns, bob . Mean, how does that affect market returns Going Forward if told to do itther or shamed into it as a result of this crisis . I think, first of all, one has to make a distinction between the banks and nonbanking sector. In the banking sector, i think coercionquite a bit of on the banks to either cut or dendz, and the Central Banks the message from the Central Banks is very clear, and thats while there is no Systemic Risk or major systemic system, theyanking want to make sure that liquiddy ratios are maintained and, also, they want the banksry sure that . Ntinue to lend just seen a headline across bloomberg that march is the biggest month on record. The u. K. Grocery sales, no who stepped nybody foot in a supermarket during the month of march, im sure, and we also heard earlier from theyve not seen any Material Impact on their business. There are still these pockets that can remain robust through this, you think . Absolutely, yes. Fist point to make is the distinction between onsumer staples and consumer discretionary. Consumer discretionary and particularly the luxury goods has been hit very hard indeed. Staples are holding up, and suppliers too. He retail sector, the basic retail sector, obviously accident looking at very strong ash flows and improvements to their cash flows. If we look at the i. T. Sector nd the telecom sector, you mentioned erickson. The fact that a large number of working at home, i dont think that ive used conference calling, zoom, or i. T. Waysther sort of to communicating with friends nd colleagues so much in my life. I think as a result i. T. Telecom flows are cash obviously strong. We talk about the health care obviously, as part of the virus, very Strong Demand what the Health Care Sector or Health Care Products dont forget video games, bob. Get an encourage you to xbox and sign on to call of duty right now. A lot of people are spending playing hours a day those games. Bob parker there, investment vest tee member at kill wealth management. Thank you for talking to us this morning. Coming up, were going to speak ecbs chairman of the Supervisory Board, andrea, about banker idends and bonuses. Dont miss that top interview next. This is bloomberg. Anna were 12 minutes into a European Equity session that looks positive. We are up by. U. S. Futures also point high are. Half of the euro areas largest lenders have announced theyre delaying, reviewing, or dividend payouts on 2019 earnings. Ommerce bank joins the growing list of lenders bowing to ecb amidure to retain capital, the coronavirus turmoil. Were joined by andrea, who is ecb supervisorye board to discuss this further. To speak to good you today. You clearly are putting pressure on banks with regard to dividends. In a piece this you talk about banks showing on bonuses. For us . Define that do you mean bonuses for 2019 or how you bout 2020 and shape the bonus structure there . What do you mean about restrandz on bonuses, and what will you do banks that dont show restraint . Good morning, first of all, very much for having me here. Say i think that as we with our recommendation on payments, we want banks to have strong commitment to preserve and its useful to lend to economy and to lend the months to in come. Showing strength on balances also paying out shares or share instruments. Pays 45 on bank their organization in having nt, and so restrained and then preserving right now priority although people, andrea, have made obviously already have obligations from 2019, right, so is it too late for that . Is that done and dusted . Should banks with focused on restraining 2020 bonuses . Well, again, the same that applies for dividend. Our economies are going. Extraordinary measures. Banks and also managers take y risk takers should also their part of i think here we are right now and capital as eserve much as possible. As we say theres concern for in ions of euros that are the pipeline to leave the sector right now, so its important for us to go out to the recommendation. Bonuses are less of a test of quantity and in terms of the large at they are to a extent already paid in nstrument, but still, in our recommendation to banks is to be very moderate on that as well. What happens to banks that dont stick to your dividends, around andrea . First of all, let me say that pleased to see that banks are reacting very positively. They are taking responsibility. That its also an own tant step for their reputation, for corporate esponsibility in this time for our economies. If banks decide not to comply recommendations, we will decide whether taking other measures. Can also take legal advisory measures. Who are the biggest banks are the biggest dividendpaying banks that havent fallen into line yet . A notice in france there are number of big banks that havent statements on ny this yet. Commenting on t banks. I expect all banks to come in with recommendations. Anna let me ask you about sign that you are seeing reported by banks, andrea. Obviously, you want the banking ector to keep lending to customers. Are you seeing any date why or any conversations with the suggest ector that their customers are in distress the Current Situation already . Andrea well, let me say, first measures are not reflecting the fragility that we see right now in the banking sector. Its really aimed at banks to support their customers. What we are seeing, of course, that the Bank Customers for it g on committed lines as there is ed to be, so credit from banks from that are , especially probably making some decisions n terms of the freeze in their revenues, which is expected measures by government. We expect this to continue, and banks to be able to support to support their customers. F course, these measures which have been issued by several governments in terms of the ntees, moratoriums and like should also have this respect . How about in terms of the Financial Health of banks in liquidity . Are you noticing any wearing out deposits . At the moment were not seeing outsource. Its actually deposits to some extent. The liquidity is being, of affected by customers the lines, but i think its important that markets, investors, also message is hat our using. Nks are now the Capital Buffers and the bufrz. Ty it is to be used in times like this. Or us there should be no negative judgment attached to banks that are going down capital bufrz right now . Andrea, you say this on ividends and we have the message around bonuses. One of our viewers is writing to sk under what circumstances would you recommend suspension of daeshl tier one payments to or is this a matter for individual regulators . Ways that you will be intervening in the way money to pay back those that have invested in them . We have no us, and plans to suspend tier one or either capital instruments payments. In the e clear rules legislation to suspend the payment, and banks are very far the triggers from for the suspension of those things. I ask about bank lending right now, andrea . Do you see banks continuing to lending that you want to see them do, that governments do in order to get other corporates through this crisis . I say, at the moment there is indeed the great lines to which in channel the banks are supporting their customers. Hope that the measures that have been put in are by governments operational soon so that the teams can be used to ontinue and even support the economy at difficult times. Anna youve obviously given a ot of relief to the banking sector. Youve told them to use the buffers as you have he described. The relief that you also say is any danger that that could damage the reputation that the for rigorous supervision . I hope really not because thats exactly how the ittcrisis framework and how should work. You should have the buffers in your time, and be ready to use in bad times. Theyve not changed at all the capital that we request have available in tough times, but the buffers, we have made them available because they are there for, we gave is that substantial. 120 billion of euros of capital amounts be used, which according to our potential ly 1. 3 of it is to households and quite a significant space of now. Sorry. Go ahead, matt. Matt are you concerned about the buildup of debt throughout crisis . When we come out the other side, is the amount of debt in the a concern foro be you supervise . Well, the point is that we economy in a e freeze during this period, so we corporates, small nd medium enterprises, not to fail just because of the their s of freezing revenue side. That should be painly support for working capital, and it easily paid back after the crisis and the government of course, relief from that point of view in terms the final of the banks. Anna andrea, thank you very much. Andrea, the chair of the ecb Supervisory Board. Thank you very much for joining us. Up next on the program, well the stocks on the move this morning, including the that rises after beating estimates. This is bloomberg. Anna European Equity markets. But not off a lagger, by much. Your stock movers this morning. Emory has a breakdown. Emery weve seen a lot of Companies Come out and say what the impact of the virus has to them, and hello fresh, one of the stocks more than 14 . Fresh worker. Hit above market estimates. Spurring growth. 2020 are suspending financial ambitions and being part of the transformation and deal with the detrucks pandemic, from the and loreal is suspending 2020 guidance. Visibility onk of the timing at the end of the health crisis. Maybe a silver lining, though. They see recovery in china consumption. Maybe thats something of a ipstick effect were seeing taking place in china. Anna, matt. Matt ann marie thank you very much. Some of the individual movers. Coming up, why black rock larry ink thinks the economy will eventually recover from the coronavirus, but its going to be different. Letter to is shareholders next. This is bloomberg. Anna welcome back to the european open. Matt, were seeing the marks up 100 re than 2 on the ftse the dax. Than 2. 4 on also, i think based on the fact that this is the end of the month,ing and this is the end of fiscal year in japan, and that could be adding another dimension to markets today. Of the sector that is are on the move then, in terms of what weve got on the sectors for European Equity markets, the function on the bloomberg. Fairly evenly. Actually, suggest that is we are positive on most of these the European Equity markets. Theyre up by 4. 6 . Insurance and oil and gas also higher. Were seeing about essentially, matt, in some of the most beaten sectors of late. Matt absolutely. Second day in a row really of gains for european stocks. Certainly for the dax. Its very interesting. Ets get to your first world news. Here are your top stories after the bloomberg terminal. Outbreak in us italy and spain may be approaching a peak. The world hope of health organization. The World Health Organization. W. H. O. Says there are signs of stabilization, and italy sees the smallest number of new cases in almost two weeks. To extend, s set nonetheless, its current until aftermeasures easter. The u. K. Government is facing up wed pressure to speed virus testing. There was confusion after the government said it would hit a tests a day, 00 but Health Department statistics 7,000 people actually received them. They say thats due to people twice. Ested there are concerns the u. K. Has fallen far behind its european testing for the virus. Hungarys parliament has handled handed nister had Prime Minister victor orbon the decree rule by indefinitely. This effectively puts the nation as the s sole command Coronavirus Crisis hits europe. Orbon says the emergency rules to democracy, but opponents, of course, disagree. Is probing the erosion of the rules of law in the country. Month on record for u. K. Grocery sales. Cantar. Ccording to no surprise to anyone thats been to a supermarket in the month of march. Face shortages of key items, including Hand Sanitizer and toilet paper. For the past ales 12 weeks have grown by the astest rate in over a decade theres really nowhere else to shop and nothing else to do. A day on s 24 hours air and a quick take powered by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Anna. Anna yeah. Ceo larry fink thinks that as bad as the coronavirus has been, the will steadily recover, in part, because he says this some of the recovery of a typical crisis. Where the about economy goes next, how we navigate our way through this. Phone. Oins us on the chairman of capital economics. Also of many, many books. To speak to great you today. Larry fink says that the global but it will recover, will reshape investors philosophies, and it might not rook the same as it did before. Different do you expect a new economy to look the other side of this virus . Well, i think we still dont know, frankly, because theres an awful lot yet to play out. Im hopeful that what were going to see is actually a recovery. Id there are signs its already happening in china and my china that they think next year the chinese economy is 14 , which is by back to the old glory days. Were not there yet, of course, in europe. Far from it. A lot depends on how strong that recovery is, but then youve got questions about how weak Balance Sheets are, how damaged banks damaged the confidence is of Corporate Executives with regard to investment spending. He was will linger for quite some time. I think it will be a very, very long time indeed, if ever, that back to quite a position we were in without the virus. Do you think will be the result of the debt, consumers are piling up as a of bailouts, roger . It strikes me that theres a of society, you know, restaurant workers, trainers, barbers, musicians. I mean, this whole service sector, right, that is getting no income for an extended period time, but taking on debt in order to pay things like rent, phone bills, et cetera. Doesnt that slow down any kind on the other side . Roger i think its bound to, yes. And overnments here elsewhere are doing what they can to try and help, but it will be help. Be something that prevents there being a problem. Yeah, i think consumers are going to be scarred for quite time. Theyre going to be loaded up with debt and be cautious. The result of that is going to be difficult to get them to spending after the initial bounce to Something Like what it would have been before. I think, ing to mean, that policy, both monetary and fiscal policy is going to have some sort of stimulus. Its going to have to be loose, it otherwise n would have been what do you make of the way look, apital markets will roger, through this and on the other side . Businesses are taking money from governments, and that is adding to levels of debt that average back. Have to pay is it going to be possible for those businesses to pay dividends to buy back shares in way that we have seen rightly or wrongly in recent years . I think it isnt going to be possible, no. Think youre going to see businesses having to conserve cash, and i think theres to be a ly going popular backlash against businesses too. Me. S is what worries authortarian ut talk and its how badly britain managed it, and at the same time praising the Public Sector and denigrating the private sector. Im worried, actually, that after all this were going to public pressure on companies against some of the the last few years. That may be just tiedfied, and thats fine. A lot of it wont be justified. Matt will we see a more united state of europe, roger . This crisis push us to share european debt and then, of course, bigger european budgets power in f a central brussels . Roger i suspect its going to or the other, as ive been on this subject, of course, for a very long time. View has been for a long time, and i dont think the e. U. Survive, but ll itssurvive, but its been said before that europe has made through crisis, it this is a big crisis, and does give european leaders who want to move in an integrationist direction, i think it gives them a chance, but at the same time, you know, you look at whats happened over the last few weeks, and i Community Spirit on the show in a number of european countries. Ermany initially banned the export of vital medical equipment. E. U. Ding to fellow members. That wasnt exactly much, and response all along has been predominantly national rather than e. U. Wide. Think, is a country weve got to watch most closely. Bviously, its suffered terribly from the virus. Its economy was weak to start with. High, and evel very its population pretty euro skeptical to start with. Think were going to see when all this is over the population e. U. Ly looking at the very much scarred. Anna are we going to see a nice at thes, because the can just spend, spend, and Central Banks will buy up their debt. Spending in 1996, the debt. Good time to try out. I never believed in mmt as such. He issue is can and should governments resolve to direct financing from Central Banks. Overblown think its because at the moment governments or most governments markets, ebt in the and then its up to the Central Banks as well. Debt ant to buy that through programs of quantitative hesing. I dont think that ends up different fromat direct monetary financing. F you look at the pure analytics, its difficult to see much to make a fuss about. You look at the history, inflations, assive and you look at the politics of all this, and the thing about governmentscing and is its a sort of taboo, and the goal there may be something at the bottom of it, but theres a lot of magic and mystery and nonsense. It comes to time it we can see Central Banks governments ncing without that much difficulty or trouble. Say government automatically leads to inflation. Well, i think the answer is doesnt know. It might do and it does pose a challenge for Central Banks and how they avoid massive inflation. Initially thats not going to be the problem. Look at japan and the enormous monetary expansion in japan. Do they have an inflation problem . No, they dont. I think it wont be for a while, its going to be i think on public really huge policy problem . About your most recent the a. I. Economy worth the robot welfare in age. Does this change the way we work roger . Ntally, i mean, is is coming to the office going to be in any way a past after this crisis . A thing of the past, but you are right, i links to point out the between this gastly thing that were all going through, and for people, of course, they had pretty e to work uccessfully from home, and i think that will continue. Im in Constant Contact with my colleagues, and theyre all pretty well, and thats wonderful research, but verybody says, oh, gosh, its so much more difficult than actually being in the office ogether with the complete Constant Exchange of views. I think there will be a tendency homeworking. Surely there will be question marks over travel. Ots of people will have realized that they can have eason for the factory meetings without actually traveling. Its interesting to see whether that has a permanent effect on practice. Thanks very much for doing this. Chairman of capital economics. Next on the program well bring you another look at some this morning, including royal deutsche shell. Have earnings out at the end of next month, i think, and perhaps well get a bit more of outlook then about the rest of the year. This is bloomberg. Welcome back to the european open. 8 45 in london. European into the trading day, and things looking positive, but off their highs of and ession, i should say, looking at u. S. Futures, they are in positive territory. Only just. In mind as you look at the European Equity markets. We are seeing gains for some of he sectors that have been most beaten up of late. Travel and leisure and oil and gas getting a boost from a price. Oil matt. Att speaking of gas, engineers from a mercedes formula one team, the mercedes one team, and University College london has helped to for op a new breathing aid coronavirus patients that could free up ventilators for only the most critical cases. Will cut the need for invasive mechanical ventilation among patients. The aid has been approved in the u. K. National health service. Joining us now is professor rebecca shifly, director of the l institute of health care engineering. Professor, thanks very much for joining us this morning. Us through what this device looks like, how does it work . Are we talking about . Device r this is a enables you to for patients that need Critical Care in hospitals, the most common that is because of the failure, and they need more oxygen than you can deliver through a face mask. A couple of ways that you can do that, but essentially what you the up and splits open lungs and then you can deliver bloodstream o the of the patients. Anna sorry to jump in, rebecca. These are not the type of ventilators that you are maybe the , but you can take pressure off those ventilators. Where does this lee the u. K. For getting enough ventilators before in intensive care . These devices basically have been used quite in nsively, for example, italy and china for the covid response, and knee been around 60 of patients from progressing to mechanical ventilation. Meets a hat it different part of the but aleveates the burden on the ventilation, so that can be to the sickest patients the most. T matt a lot of talk has been of the possibility of carmakers like General Motors or ventilators. Ng i have spent some time in cant factories, and i understand how it works. An advantage t here because of the specialization possibilities of cclaron . Ebecca we have a Long Partnership with mercedes. Htp. Ula one and essentially theyre perfect for the role of manufacturing at cale because of their engineering expertise, but also because of the capacity that do things in volume. Will these be made then at such volume . Devices are core being produced at scale in the u. K. , and also, we are developing and working with a called oxford obtronics, and theyre making the kits in in r space in the u. K. Oxford. Matt how soon, professor, will devices be out to patients . How quickly will you be able to lives with these things . Rebecca we already have nhs and the n the health in the kuchlt k. And doing patient trials in the London Network hospitals, well, we in the next few days, and these devices beginning ofby the next week. Rebecca, thank you very much. Fascinating happening on our set. Lets get a look at some of the stocks that are on the move, though, today. Emery morgan has the are a breakdown. Mery theres a lot of movers to the up side, including shell. They say they dont expect the virus to have a significant overall demand for its product in the first quarter, the worry is going to come in the next few months. Here on out demand is catastrophic. About 25 . Erickson also to the up side today at more than 3 . Going to heyre not move any Material Impacting the virus, but om the they are closely, obviously, watching these developments, and then the advertising giant jumping more than 5. 5 . Hey suspended their final dividend Share Buyback withdrawing their guidance for 2020. Ou might think why are they jumping today, but a note is out saying they have a strong start to the year, and they highlight savings getting a boost today at 6 . Annmarie looking at some of the individual movers. Up next, when will data matter markets once more . Well put that question to christine aquino. Next, this is bloomberg. Back to the e european open. Equity markets making decent gains by up more than 2 , and are predicting u. S. Futures so up by just around a percent on that. A little less than that on the major markets. Of the us now the head market todays trading session would seem to be being a little bit by u. S. Futures. What is it that the market is watching for . Chinese data overnight, which seemed to go assurance, i suppose, but maybe that is news as you look at the loss of life globally from the coronavirus anna. Solutely, i think the chinese numbers, while they were a glimmer of end of a have i sour quarter, i think the focus among traders, everyone in markets, is detection tate of rates and virus. Were still in that exponential seeing infection rates grow in other parts of the world. Asia. And until that showed some signs of plateauing, i think the best for would be hope a couple of days of gains. Im afraid. D that, matt i wonder what you think announcements of weve seen from companies today and over the past few days. Dividends, cancelling buybacks. This is something that you guys as bn have kind of previewed, but how is this Going Forward . T markets going yeah, matt, i think its worth looking at because it is a of how companies are being affected by this realtime. Terms of the economic shift that globally companies have patience, and also moving forward. Focus on ee a lot of action. Te what that means for their Balance Sheets or earnings moving forward, also going to be under the microscope. Ertainly were talking about the impact of the virus measures but e aggregate economy, its another thing if you are looking at it on a more microlevel. This is how you gauge kind of past the moved initial sentiment shock from the irus and on to the more microscopic individual level, spaces. Ual company that might be what kicks off the second phase of weakness and negativity from the virus. Thanks very ine, much for joining us. Markets s from the live. That begins germ an unemployment numbers. A little bit backwardlooking. Middle of fore the march, i suppose, doesnt feel to markets right now. Matt no, and as a result theres not a big change. Looks like the unemployment 1,000 here, although we were looking for 25,000. 1,000. Thats in thousands. But its not much of a change. 5 in terms of the unemployment claims rate that we march in the most recent data, but it is fairly backwardlooking, and its not the ting, as you can see, dax. Currently up 2. 5 . Gains across European Equity indexes. Gains in terms of beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. The World Health Organization since the outbreak may be today over 25,000. The pandemic rages on in the u. S. With reports of increased. The white house could consider a fourth round of stimulus. China pmi strongerthanexpected. If volatile quarter from markets. Good
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