Drug failed in trials. Good afternoon afternoon and good evening, good morning. This is viviana , this is bloomberg surveillance. First thing is first, this is what your markets are doing. A lot of the focuses on earnings. A lot of the focus yesterday was the fact that we saw this blunder through w. H. O. Leaking. We understand gilead and the impact we saw on the markets because the trial was not as successful as a lot of people were hoping it would be. Overall, your markets are also focusing on oil. Touch today, west texas actually extending the recovery, treasuries climbing with the dollar, and a lot of the focuses what is going on with italy, the Italian Government bond fell after the europeans felt signed off on this plan, immediate follow from the pandemic, and we also look at Corporate News and some of the earnings. Ifo german Business Confidence falling, but it was expected. Of the 79. 7 figure. Again, that is the lowest ever, and in about 30 minutes, we will speak to the head of the Ifo Institute, clemens fuest. Now to Viviana Hurtado in new york city. Viviana u. S. Treasuries want equity stakes in exchange for a share of 70 billion in aid. Public companies are critical about security that want a rescue deal, they will have to offer shares to the government. For private companies, he may assess debt. It is similar to those for airlines seeking payroll assistance. In the u. K. , Health Secretary matt hancock valley to dramatically ramp up testing and rollout a Contact Tracing program after weeks of criticism the government is falling behind your secretary hancock says testing will be available to all healthcare care workers and their families. This as Prime Minister johnson is expected to be down the street as early as monday. And gilead, as francine mentioned, tumbling after a summary of its covid19 drug appears to show it is a failure. The company and scientists working on it say it is not fairly represent the actual result. Posted theally results online, but they were quickly removed. In italy, the number of coronavirus recoveries has overtaken new infections for the first time, and it is a sign that social distancing measures are slowing the spread of the disease. The news coming around seven weeks into a nationwide lockdown. It has crippled the economy. Prime minister Giuseppe Conte has planned d containment measures for may 4. Nestle is back to sales growth in almost five years as customers loaded up on frozen food during the lockdown. Nestle is working on an improvement in sales growth this year, but there is a big caveat it says it is too early to assess the whole impact of global lot of the global virus. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Francine . Viviana, thank you so much. We have a number of stimulus packages both in the u. S. And in europe. First the u. S. , and congress has approved almost 3 trillion in coronavirus spending since early much early march. To 484 billion measure as Small Business loans. Do not agree on something more shortterm. Joining us now is on your allowed chief Investment Officer at legal general. Sonja, thank you for joining us. Are you confident that at least we have a package for the shortterm, or are you disappointed that eu leaders did not do more . Sonja good morning, francine, and thanks for having me. I think this is good that we have seen a flurry of announcements, and it is very clear that the size of most of these measures is quite unprecedented, obviously a term we have used on so many occasions and throughout the crisis now. I think for europe in particular, there was an exultation that the eurozone leaders would go one step further this time. You remember during the global 2009,ial crisis, 2008, and subsequent eurozone debt crisis, there has always been debtpush for further utilization. It is very clear that the experience of covid19 is very uneven. Italy in particular has been hit very hard. The size of the measure that governments put in place will probably be different as well, and it is very clear with italy and some of the steps of sustainability, what we are focusing on on these gross financing means. You are looking really at what is the starting position of the government and the deficit and maturing debt and what is the extra stimulus that the country needs to provide . It is very clear that the starting position is very different, and hence the attempts yesterday, and im sure we have not seen the last of it. How can we make it where it will benefit from the eurozone as a whole . I think the reaction today, i am sure we will see a lot more. I thought it was encouraging. As we know, the devil is in the detail, and to come to a full agreement probably was too optimistic for the first real conference yesterday. Francine do you worry that if we do not do more solidarity, this will actually lead to much more extreme politicians, and actually we will see a breakout of the euro . I know we talk about this. Crossroadsns are at a lot, almost every summit. It is obviously, again, i would be careful in saying this will be it might be the final piece of the jigsaw, although, again, i try and hope that we will get to the next level, although, as i know, it is a very laborious process when it comes to the eurozone. I think the tendency to want more populist government or populace politicians, to put it this way, had been on the way even before covid19, you know, came about, and as such, we might see the friction reappear that never, lets be really honest, never feels close to the Global Financial crisis, and just now comes back to the forefront even more so. And i think there will be an additional, you know, level right now because of the human the human tragedy not only for those who have suffered and those who have survived, but you have a double impact here that governments need to wrestle with and coming to its far and fair measures to help these people is a, you know, gigantic task, and i think it is why it comes back to the point, you know, we need to see more solidarity, and it is clear that people want to see more solidarity, and this is what we are facing currently and what we need to see politicians pick up. Francine sonja, what does it mean for your markets . What are you buying right now . Sonja in terms of markets, it is very interesting. Again, i think that only the speed with which markets discounted the complete standstill in economies but also how quickly they are starting to look through what will be inevitably a miserable Second Quarter and earnings season and starting to look through to q3 and q4. I think there is a sense for pause right now, because we are entering the earnings season. You mentioned nestle already. It will be an uneven picture appeared we have netflix with early picture. We have netflix with early extra suppl subscribers in the quarter, and elsewhere, it will be a disaster. I think it is time to reassess and take stock, because we othirdsy came back tw of the initial selloff, and i think for investors really it is now about to assess what will remain a viable business model, because what we are trying currently to focus on is the longerterm indication, what we refer to as economic salary. What will be the implication on consumer behavior, on our confidence . We learned now over the past week that social distancing measures will be in place for a lot longer than i guess originally anticipated, and this will shape the way we consume, we go intoand how our understanding of each individual company. Overall, isnja, this deflationary, or is this disinflationary . Sonja that is a very good question and a very important one, because if you think about the demand shock and the size of the demand shock, then inevitably, you know, alongside the decline in the oil price, this has to be deflationary. But on the flipside, i think we just heard yesterday or the day before, the first indication on what money growth has been, and i think the money was plus 40 , so theres obviously opposing forces at play, and i believe this is more of a timing factor initially. But right now, the first impact will be deflationary because of the demandside shock we are seeing in the system. Francine welcome back. This is bloomberg surveillance. I am Francine Lacqua in london. Many think this pandemic will change not only the way consumers shop it also the way businesses will change. Here are our numbers now. Things are going to permanently change. It has clearly accelerated the whole use of Online Banking and digitalization. There is more of a willingness to take risks, to engage. We are convinced we are going to have to reduce population density in our offices, so we think there will be come on any given day, fewer people back in the offices. Companies will have more of a tendency to go to virtual offices, even then, i would say, production environments or production Manufacturing Type of Companies Like ourselves. It is definitely going to increase dramatically, and this may be something good for banks. What we see is now the importance of diagnostics, be they continue to invest in diagnostics, i think recent events have shown how important it is. I think if you ask some of the companies that have had to make a transition three months ago whether they thought they could switch to home inside of a week, they would have said, impossible. Francine a number of chief executives that we were speaking to in the past couple of days about how the business will change in the pandemic. Laud,get back to sonja chief Investment Officer at legal general. Where usetalked about of value and what you were worried about. A lot of companies are getting to huge debt now. Is there a point where markets turn on debt and only focus on the debt, and will it completely reopen, or will it consume us . Sonja that is a really good question, and i think for debt and credit markets alike, it is very interesting, the Immediate Reaction to the lockdown measures, and so similar to equity, we have seen the mechanisms working very clearly. What we obviously have seen since then is unprecedented support measures from the Central Banks, and i think the fed in particular has rolled out an incredibly comprehensive list measures to support debt and credit markets, and i think that is very important. If you try to assess the attractiveness of these asset classes, then it is very clear we have two opposing forces that will work out over time, and one we just highlighted is just a question, and for governments in particular, it is that sustainability and attractiveness of their government bonds, and on the credit side, likewise, what we talked earlier about the, you know, viability of Business Models and whether the credit you are buying into is safe, but the support from Central Banks really provides instability that otherwise probably would have created a lot more volatility across these two segments. We still have to be very careful. I have highlighted these as an indicator that we are looking at, because it gives you an indication on where the journey is heading towards it, and particular, assessing what the starting position is from a countrys point of view, because that will give you a good indication on the health and effectiveness of the underlying bond. This is not an easy picture, and i think that is very important to understand. Not even in the developed world, and let alone in the emerging markets. We require really a casebycase analysis, because otherwise you will risk just, you know, buying into the story without understanding the fundamentals. Francine yeah, i, you know, love the nuance, and it is something that, of course, investors worldwide need to remember, so what does it mean for emerging markets, sonja . How do you distinguish between, you know, emerging markets that can still be ok during the pandemic intimate a difference between and to make a difference between the oilrich countries and those that are not . Sonja you highlight a very important point, because, again, it is very clear that the experience will be very uneven and will be a difference between the starting point where you are. First and foremost, there are quite a few emerging markets that are still on an upward trajectory when it comes to the virus development. And so we have to acknowledge as well that the starting point for most emerging markets, in terms of health system, the feasibility of implement a lockdown measures, and then, the systemsecondary, support are very, very different and even very different across emerging markets, hence trying to use the blueprint we have seen emerging from all of the developing world is probably wrong, so we have long debated internally how to make sense of this. What is clear is that support measures are very low in emerging markets. I am sure we will see more of it, but it is very clear as well oft the headwind for a lot the emerging markets is not as generous then what we might find in the developed world. As i said, to us, as well as the understanding, how emerging markets, if you take a country like india to inform lockdown measures, it is a very different situation than if you look at the u. K. Or germany, and it is that understanding that will help us understand how this might develop and, Going Forward, likewise what we should not forget is enforcing lockdown in a country where a large part of the population still needs to earn daily money to buy food is a very different situation to think about when it comes to lockdown than, again, in the developed world. This does not mean emerging markets are not an unattractive way to invest. I think we have to friendship between the virus and development and then economic consequences. It is important for investors to understand. Emerging markets actually have seen quite a dramatic rally from the initial end selloff, so again, what i said for everything else, i think it is a good time to pause, to reassess, because we now have a lot more information that allows us to understand the Economic Impacts and the longerterm implications. Francine sonja, thank you so much. Sonja laud, chief Investment Officer at legal general. Up more on gilead. This is bloomberg. Up next, more on gilead. This is bloomberg. Oomberg. Francine this is bloomberg surveillance. I am Francine Lacqua in london. Lets talk a little bit about gilead. We had the leak summary with chinese trials. The company and the scientists working on a trial say this was not fairly representative of the actual trial. Pharmaceuticale analyst at bloomberg intelligence, sam sweeney. Sam, what does this mean in the virus . Drug for sam it is an unpublished trial, it is a very new disease that is not understood, and doctors and companies are trying various trials. This is an antiviral that is aimed to kill the virus, so you would expect it to work better if given earlier in the disease process. Advancede quite sick patients, so if the data is correct, i am not surprised, perhaps, that it did not work, so it is really very difficult to judge. Obviously, everyone would have loved to have judge, but it will be wait and see how the bigger control trials report. About . E so what are we what about vaccines . The chances of a drug treatment are higher. If one of them shows some benefit, again, lets be careful, not people should run away thinking there will be a magic Silver Bullet somewhere, some benefit, that would be a good thing in terms of managing to reduce the risk of deaths. Theres lots being developed, lots of science out there, and i am very hopeful someone will be able to develop something soon, but we really have to stop giving timelines, because theres a possibility it could take several years rather than 12 months. Francine sam, thank you so much, sam fazeli there on gilead. Francine this is bloomberg surveillance. I am Francine Lacqua here in london. Markets, politics, economics. First with your bloomberg word news, here is Viviana Hurtado in new york. Hi, viviana. Viviana the bipartisan approval coming at lawmakers who wore masks. They also entered the chamber following Strict Health precautions. The white house as today at noon, washington time, President Donald Trump will sign the legislation. Now to eu talks, they ended yesterday with no agreement on a recovery package. German chancellor Angela Merkel pledged to back the stimulus plan. Well, it was not enough to force through a deal, and it comes as ecb president Christine Lagarde warns of a block being too little, too late. The central bank thanks the euro shrink this could year as much as 15 . President donald trump casting doubts on reports kim jongun was in Critical Condition following injury, but he did not give any more corrected on monday, Officials Say the leader of north korea was in Critical Condition after cardiovascular surgery. South korea says kim is conducting, quote, normal activities. Citing, quote, significant economic uncertainty, caused by the coronavirus pandemic. Optimistic Quarter Sales targets, but intels outlook fell below estimates. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Francine . Francine viviana, thank you so much. Now lets focus on the German Economy, and we had that Ifo Institute at the top. If you look at pmis for the month of april, they actually plunged to 17. 1, way below economists forecast and