Color to, it is that the new york police department, the acclaimed nypd, has five deaths within the organization, not just police officers, but their staff as well. Really bringing home the seriousness of this in new york we are in the interregnum, francine, up to jobs day. Of wednesday,rts thursday, and friday will be extraordinary. Francine . Francine i have to say, we are going to spend a lot of time talking about those pmi numbers in china. They are nowhere near normal, but they are much better than they were a month ago. Lets get to first word news in new york city with viviana hurtado. Viviana we begin with the white house, and Congressional Democrats are preparing for a fourth economic stimulus. The proposals include aid for the travel industry and the Mortgage Markets. Says states and local governments will need more help. Over to japan, where the party the ruling party proposed the guest ever stimulus package, valued at 554 billion. A third would be at private initiatives and developments to make up the rest. 16 of the total would be handed out to the public, in a combination ofs of cash subsidies and coupons. Now to china, where Manufacturing Activity rebounded and strongly. It comes at a time when there is a growing threat from slumping demand in the rest of the world. Employment in China Services and Construction Industries are still shrinking. Oil futures in new york rising today for the first time in four sessions. Crude is wrapping up its worst quarter on record since the end of december. Oil is down 65 . President donald trump says he is concerned. He spoke to Vladimir Putin about russias market share battle with saudi arabia. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, viviana hurtado. This is bloomberg. Francine . Tom . That is as so much p great overview of some of the stories we are seeing out there. Datalds right in with dado involving bonded equities. The equity market is up again. A whole bunch of discussion yesterday about end of quarter ballet, and we are beginning to see the first charges of bond be thereat appears to as well. The yield market, the spread as clearly as i can. I dont want to oversell that, but the flattening is there. Strongerr market, against e. M. , but just fractional. It is almost range bound, is how i would put it. That gets us to oil. Javier blas, who appeared with us yesterday, truly expert in this hydrocarbon market. Javier blas making clear that the plats delivery price is way below the market quote. This is highly unusual. What it signified is that the massive tension between riyadh, moscow, and now washington dragged into the oil story as well. President i think trump tried to weigh in on the oil story, which is filtering through a lot of the commodities last week. European stocks are up. Travel, measured shares are leading gains in the stoxx 600 peer the World Health Organization says there are some stabilizations in europes else per in europes outbreak. We did have china reporting stronger than anticipating manufacturing data, so i am looking at stocks in europe, up 2 falling 2 . Europe shares are rising. There is one thing i thought was significant because we did speak to the unicredit chief executive yesterday, and he was saying they were delaying the dividends per the European Central bank saying they may force lenders to postpone Dividend Payments if they do not actually voluntarily comply to bolster capital during the crisis. Something we need to keep an eye on. Joining us to talk about the outbreak, talk about the economic impact, am delighted to be joined by erik nielsen, chief economist at unicredit. Great to have you on the program, as always. Give us your thoughts about how we have changed in the last couple of weeks. Central banks have done quite a lot. Fiscal stimulus is here. What else can europe do . They are not speaking with a common voice. How damaging is that to the economy . Erik good to be here. A lot happening really. I would characterize it as follows. The different policy institutions and instruments have different roles to play, and the central banks, including the ecb, have come out extremely aggressively to primarily keep markets rolling, but also in the case of the ecb, made clear that the transmission mechanism must be protected so it works well. That translates into saying sovereign space cannot be too large, to put it simplistically. So they have instituted flexibility on the capital keys, for example. That is the important part. Then there is the issue of how you shelter the economy from the effects of the necessary social distancing and the lockdowns that we are having. Out enormouse put fiscal measures, including guarantees for smes and households and others to come through this liquidity crisis and make sure it does not become a solvency crisis. , this hasy in europe been done very well with the exception that italy, in my opinion, has been way too timid. It is badly needed because they are only a fraction of what germany and france and spain have been doing. For those countries, it is more erik, why is, italy behind the curve . Are they afraid they do not have the right models, or are they afraid they cannot afford it . Erik im not quite sure, to be honest. They can afford it. If you look at the issue of guarantees, in italy the state has at this stage only guaranteed me before percent of gdp, where in germany it is more like 13 , 14 . 4 of gdp,aranteed where in germany it is more like has only guaranteed 4 of gdp, where in germany it is more like 13 , 14 . Interest rates are so low, so to what was not sustainable three years ago is sustainable today. So i dont think there is an absolute sort of physical barrier to what they should do. Tom wonderful to have you today from london, from new york. The clear need for income substitution immediately the clear idea that one day this will end, and then we have a massive debt buildup that can be paid back. What is the most efficacious way to retire trillions of dollars of global debt . ,s it perpetuity bonds literally pandemic bonds, or is there a nielsen path that makes more sense . Erik it is a very good question, tom, but i dont have the answer. The first thing to say is for sure on the others of this crisis, there will be a lot more debt. I hope most of it will be on the sovereign side because it is the role of society, in my opinion, to shelter those to the extent possible who are hit by this crisis. But also, corporates and household will probably be hit with more debt. In america, this is particularly concerning for the core sector, which is much more indebted than the europeans. Then the question is, is it sustainable on the other side . One analystest like to vote rinsed it yesterday the peer imte wrote yesterday not too worried about this. If you look at the magnitudes of how you bridge yourself through this period, i think one should be reasonably optimistic that life is sustainable on the others. Are trying to keep ahead of the conversation, and the gentleman from the Peterson Institute will join us tomorrow on Bloomberg Television and radio. A very important study. If that is the case, you have to believe we will rapidly get the spigot turned on. In europe, for those watching midday morning, the amount of last 12hs in the hours have been absolutely extraordinary. Certainly no precedent in my lifetime, no question about that. It literally goes back to the kind of depression tone that our parents and our grandparents told us about. We do not really need to fear that, if we have a government that can come in and assist, do we . Correct. W, this is no, this is correct. And there is a little bit of a debate whether the Economic Cost of this furlough is going to be too large. In my opinion, and from what i isd from the scientist, it not so. There have been studies done that show that the totality of the drop in gdp would be lower if you hit the economy hard now , socialating people distancing. It is shortterm pain for longterm gain, but we have to be on with this. Continue. Ll erik nielsen from unicredit, thrilled that he could join us today. We are trying to give you the best and conversation we can on these different moments within this pandemic crisis. That great of the that greater lead that great leadership from Jeffrey Currie from Goldman Sachs, he has been outstanding in getting out front of these supply changes and demand collapse that we see in oil and gas. Jeff currie in the 7 00 hour across bloomberg. Please stay with us. From london, from new york, this is bloomberg. Banks are reacting positively and taking responsibility. That is an important step for their own protection, ensuring Corporate Responsibility in a difficult time for our economies. If banks decide not to comply with the conditions, we will decide on taking other measures. We can take measures in italy. Francine that was mr. Enria of the ecb. That is about what europe asked banks to do on friday, pushing back dividends and buybacks at least until october. A number of banks complied with that, in upper have yet to do so. You modelback to how the economy in this unprecedented epidemic lets get back to erik nielsen of unicredit. Lasts, the this lockdown and what we are seeing right now for 3, 6 months, is it inflationary, or could it be deflationary for the world . You that depends on if think that the policy measures will do too little or too much, in a sense. If you come through, then forget about the next few months, where we will be hit by huge relative price changes because of demand and supply. The next three months through this, i dont really care about the number. But we will have big relative price changes. After that, it depends on whether we over did it with liquidity and we get back to normal or we get into a situation where people are still guided by the economics of fear, in economic terms, that velocity of money will stay very low. But i am of the opinion that it is not going to be inflationary really, but i wish it would be a little bit because that would be a sign that we are back at full speed again. Would be. It certainly overall, what is the best way to deal with this . The u. S. Is going for the helicopter money approach, putting a check through the door as people will eventually spend it either online or when the lockdown is less severe. Here it is focusing more on companies. Is it because the economies are at different stages, or is it just a different approach . Erik let me start by saying what we sometimes forget, that the most important thing to spend money on now is the health issue, and that is money on testing and preventing, and healing people, and then dealing with what we are going through right now. So it will be about the money in the household stuff. Money should be plowed and researched to find a cure, the vaccine, and to do with people who are sick or this is the number one issue, and i do not think we talk enough about that. Number two, my preference would be that you have to try to make it targeted to those who suffer the most. You can send checks to you and me, what i dont think we are going to go out and buy a lot of new stuff. It will be nice to get the money, but it is not going to have an impact at this stage. The priority should be that those who are impacted, the small enterprises, businesses, the shops, the bars, the restaurants, each may run out of cash flow, get a way through tax relief and guarantees of credit that they get through this crisis. Umbrellasome overall kind of helicopter money will be quite nice also, but that is a third priority, in my opinion. Tom there seems to be a real , oning, without question america and small business. It seems to be more diffuse in america and more targeted in the United Kingdom. At least that is the hope we have seen going forward. In the last 24 hours, i have nted 24,000 for rose 24,000 furloughs just in retail. What do you see in the United Kingdom in terms of getting checks into the hands of individuals and Retail Businesses . Is it truly a distinction from america . Is, tom. Hink it but britain has done well. The programs they have done here are good, and they are working hard for the Small Businesses and households, ways to try to keep people employed and subsidizing their salaries through this period. I think this is working well. If i could say one thing in europe, the number one issue now is to implement it. We have seen a lot of come in my opinion, good targeted measures, but we are still in the implementation phase. It is difficult to actually get all these enormously detailed policies into process that actually then give the cash or relief to people. That is where the emphasis should be, in my opinion, in britain now. Tom i look at all that is going on, and goes back to the same nielsen optimism as well. Path, a new glide set that is set lower than where we were before, or do we actually get the nielsen glide path back to where we were in december and january . No, tom, i wish i could be optimistic on this. Even if you do a b shaped trajectory to gdp now, i think it is unrealistic to get back to january levels until the end of next year, at the earliest, but more likely somewhat eight or than that. It goes slowly. 15 , 20 ,ome down by it takes a lot of growth to come back up to where you were, and that will be businesses by definition who have gone out of lostess, so we will have capacity, unfortunately, also. Tom there is the keyword, capacity, folks. This is something people are thinking about once we get beyond this pandemic. Erik nielsen is with unicredit. We are going to continue forward now. We are absolutely overwhelmed by how global wall street is reading, listening, and watching a product of bloomberg. If you are on the terminal, there are all sorts of important things, including the famed bloomberg intelligence. The work there is just worldclass. I also direct your attention to tv , a good way to stay up on the conversation of Bloomberg Television. Worldwide, stay with us. This is bloomberg surveillance. Viviana we begin with saudi aramco. It is considering the sale of a stake in its pipeline unit to raise cash. It hopes to raise more than 10 billion. Saudi aramco is dealing with a historic route in oil prices, plus it has a long list of spending obligations. Now to a group of 15 banks come off the hook in the 23 billion in loans. Tmobile needs them to close the takeover of sprint. The money is due tomorrow. The banks hope to sell the debt to thirdparty investors, but that has been disrupted you guessed it by the coronavirus outbreak. That is the Bloomberg Business flash. Talked aboutiana saudi aramco. West Texas Crude Oil rising for after a three day slump. Yesterday we had some wonderful announcements from of your blos. From javier blas. Positioning brought adjustments, and i am also looking at european stocks,retty much on the opposite treasuries advancing. Francine spreads come in tom spreads come in, a fractional move, and we are poised for tomorrow with the adp report. Many people dismissing that. Then we go into thursday with claims, the jobs report on friday. Coming up, we look up that we look at institutional with the cio. This is bloomberg. Good morning. [ one more time by daft punk ] woo [ laughing ] woo play pop music no way dude, play rock music yeah woah no matter what music you like, stream it now on pandora with xfinity. And dont forget to catch trolls world tour. Lets party people one more time good morning, everyone, from london and new york, tom and francine. Lets focus on huawei. It released its annual report and is showing healthy revenue and earnings for 2019. Looking at the bloomberg terminal, this comes despite u. S. Efforts to curtail the business on a u. S. Stage. We are thrilled to be talking with the vice president. We have a number of questions spanning on a number of things, but what is the market looking like in china, after the lockdown and concerns about coronavirus . Are people slowly buying new phones . Is there a pickup . Victor thank you very muchs much. Nice to talk to you. I would like to see you hope [indiscernible] cities and impacting families, so huawei, we have come through this period from the earlier fabric and full production will be recovered. The first part is to make sure the safety and health of the employees and make sure we are in a safe position. Francine give us a sense of after the lockdown, are people ready to spend . All of our heartfelt console it those whondolences to are fighting for their lives or have lost their lives, but are people in china ready to buy a new phone because of the measures put in place . Are people feeling more confident about their future . Victor yes, the people are back. O work and their confident we can see the markets have recovered. We have Just Launched our new phone and people love these phones, and the new features that are supporting 5g. Coronavirusrom the crisis was shortterm and people still use to work from home and buy online. Phenomenon. A new we have to make sure to have a Stable Network to support people. At huawei,f you look it was at the center of the storm that led to possible trade wars between the u. S. And china. Our Chinese Companies now ornted, because of the virus because people are more inward looking . Globalizationnk now going forward, will huawei lose sales abroad because of coronavirus . Victor there are two points. Huawei, wezation of promote the Global Supply chain so that is why we work closely with all of our suppliers around the world. We have strong cooperation with all of the companies which includes american companies. As our annual reports showed, our business achieved 19 year on year growth and we spent more purchases in the u. S. The globalization is definitely the trend for the Global Economy outcomepport that to the Global Corporation supply chain and innovation. That is why huawei has been successful. Mean for what does it the rollout of 5g in europe . Some countries have decided to partially use some of the things done by huawei and others have decided to forgo it. What does coronavirus mean for these agreements . Victor going to 5g in 2019, we can see Good Progress on 5g. Seen demand have and the function and i have already seen more than 600,000 stations to our customers. Start andries will some countries will be slower and some customers love huawei and continue to work with huawei into the 5g. Other customers have another choice because there is some impact from the americans. Tom you have over 15 years of strategic messaging for huawei in europe, ireland, and the United Kingdom as well. What we see in this pandemic is the belief in china data has been destroyed. Arguably the technological integrity of the nation. How does the leadership of china get trust in data back . The virologists, the economists we speak to flat out dont believe the data coming out of china on this panic pandemic. How does china get the trust back . Is, we provident the communication equipment to our customers we do it through the network so we dont own any data from the consumers. This is a reality. We are working with our customers to make sure the network will be reliable, so from the current situation, most people are working at home. Network, we will allow them to have the Remote Access to their business and their family and friends and and receive the latest information. The open standard and Global Cooperation will enhance Data Protection as long as the company, we always comply with the likes of gdpr. So much forou joining us, victor zhang with huawei. We thank him for the messaging out of that company. The messaging out of Selective Companies is difficult. It is extraordinary to see the glide path of madrid and catalonia and barcelona you barcelona. It is the new york equivalent in europe, those numbers in spain. Just dreadful. We will continue to discuss finance, economics, and investment, grim data worldwide and in this United States. This is bloomberg. Viviana you are watching bloomberg surveillance. We begin with the bloomberg redhead , spain reporting the deadliest day with 491 virus deaths. Your first word news continues with the Mortgage Market and travel industry, they may get aid and a fourth round of stimulus. The government compiled lists totaling 406 billion. States and local governments will need more help. Goldman sachs sees deeper contraction in the u. S. Economy, forecasting and the Second Quarter the world will shrink at an annualized rate of 34 , compared with an earlier estimate of 24 . Goldman revising its midyear jobless to 15 . The coronavirus outbreak in europe may be approaching a peak , according to the who. Italy reported the smallest number of cases in two weeks and the lockdowns are starting to pay off. In the u. K. , there is rising pressure on the government to speed up coronavirus testing. 10,000 tests are being carried out each day but the actual rate is about 7000. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom it is an extraordinary Early Morning in america, very early, and the tents are outside mount sinai in new york city, thunderstruck by the statistics and the depths of this pandemic which spreads out across the nation. The spanish data was equally grim. We spoke with a Government Relations type from huawei and we got about seven nonanswers in a row. This is what we like to do best on surveillance. Miranda carr joins us, fabulous on reading china and reading it within the chinese language. Maranda joins us from london. Virologist and every economist i speak to does not believe the data out of china. Are you in that camp . Miranda all the data in every country has differences. China, we see dramatic data and whether that is kept as well as germany or the u. S. In the same manner, it is difficult to know. Key as the cases. Deaths, rather than the cases. The deaths have been limited but whether they are counting all question is a question. Tom respect to medical professionals worldwide, there has been criticism of mexico, but some of the localities in the United States as well, one of your gifts is to read the chinese press. How are they pitching this pandemic to their people . Miranda you have had a shift. Instead of so much about the domestic cases and domestic transmission, it is much more what is incoming and putting orders back in place. You cant get the income in cases. That is where they are keeping it. You have seen where some of the restaurants and Leisure Facilities are opening back up opening back were up again are reclose because people are worried about incoming infections. That is where the biggest risk is now coming from. Francine what can other countries learn from china . There is speculation that some of the medicine used to treat patients with covid has been used in china and is not always used in european countries. Do we need a world locked down and reopen at once, if we are seeing things stabilizing in china but then people coming back to china and reintroducing the disease . Miranda i am not an expert on the medicine. The lockdown in wuhan seems to have limited the spread quite significantly. That has been factored on a worldwide basis, so those measures need to be accepted in china and internationally. Obviously, just waiting now for any vaccine to come in or any treatment to come in. Whether it comes from china, the u. S. , or europe, everyone is racing to do that. We are hoping to get it done as quickly as possible. Francine what can you tell us about the pmi today . Is it a sustainable turnaround in china after the lockdown . Does it definitely mean that things economically in china are Getting Better . Miranda you would expect a bit of a rebound. There was really awful figures in february and it is all about month on month expectations. Is this month better than last . Yes, it is. Will that be sustained in q2 . They have seen a lot of companies restart activities in anticipation of the stimulus and the orders coming in, but they may be jumping the gun because if the demand does not come through from the international areets and because they still in lockdown, it may be temporary. Say whetherrly to it will affect q2 because of the international and domestic demand. Tom we are looking at emerging markets and within the pacific leakages, the mix within china and other nations, there each each their own story, what is the knock on of the pandemic . Finance, aamic, trade flow dynamic, what are the knock on effects . Miranda the trade flows will potentially be, as you have so china, thattions to in keyfect manufacturing asian markets. You are not going to get the demand from the international side. How much china is willing and able to its stimulus policy is different. It is not about infrastructure or a huge commodity demand. That is the 2008 stimulus package, a lot of the things like 5g technology and all the tech investment, that is domestically focused. Using domestic technologies so increased demands of copper potentially but not the same stimulus as 2009 2010. Tom absolutely interesting. I look at the Institutional Ownership in europe and america, everyone waiting to see with the International Monetary fund does with their emergingmarket challenges, which institution matters within an interesting government of china . The do you watch besides easy answers of president xi . How the institutions work together, and you are seeing which ones are restarting because where you know china is back up and starting as things where we have the schools and conferences restarting, plus all the provinces restarting. Still quite a difference of which are terms of doing what. Shanghai is taking different then you are seeing in may be quite dong. Guadong. Inn you see coordination , i think within china that is when we can see china losing to the other side and that is when things might start to turn to normal. Francine how much more tools there washave, if something to go badly from here . Miranda it has got quite a bit with the 20 basis point cut yesterday. Instill has very much to go terms of it is not at zero. It is about 6 . The interesting dynamic is you are going to now get every single government issuing massive amounts of debt. Market and the bond encourages International Investments into its bond market, so where will investments investors put their money . You are potentially causing tensions in the global monetary market. China is quite destabilizing if you are ending up with significant flows going into the Chinese Market and not being taken out of other markets at the same time. Deficitnning a fiscal and then a current account deficit. That is where the longterm past might lie once we get the initial panic phase. Francine thank you so much,. Iranda carr stays with us later today on bloomberg, carmen reinhart, professor of International Finance systems at 8 30 a. M. In new york, 1 30 p. M. London. This is bloomberg. Viviana this is bloomberg surveillance. Spending, consumer sharply declined. Visa lowering its outlook. Visa cardholders spending dropped 4 while spending is down 19 . Said he wasorker fired. He told bloomberg he was fired for standing up for what was right but amazon said he was fired for violating safety regulations. That is your Bloomberg Business flash. Tom thank you so much, lots to talk about. Good morning to all of you. America,ift in beginning to see companies adjust the expense side of their income statement. It has been extraordinary in the last half a day, full day. Francine . Francine i am looking at data. All of our thoughts are with the families losing family members to this deadly pandemic or have people trying to fight for their lives. At the same time, we try and track the markets to see what they are looking at. They are looking at the number of deaths, the World Health Organization saying maybe we have peaked in europe. U. S. Equity futures up. And that wonderful analysis on oil yesterday. Jeff currie of Goldman Sachs joining Bloomberg Television in the 8 00 hour as well. Mickey levy joins us from baron berg. Him about theo huge response to this pandemic. Please stay with us. Worldwide, this is bloomberg. W . W . Uhiono tom this morning, this end of quarter does not look like the last quarter end. New years eve 2019, Climate Change was all the range rage. 90 days later, a pandemic rages. Worldwide, a primal scream for government assistance. The president s april hope has become june may be, millions will be furloughed, laid off, or fired. Miami, a doctor in five, commissioner shea, we really do not have time to mourn. Londonin new york and and the somber and this of this tent hospital set up hospitals of this tent set up out bellevue
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