120 reports are in, but next week is the big week for earnings reports. Yearoveryear Earnings Growth is down 17. 6 right now as we stand. The s p before today was down 13. 4 this year. He did make back some of that ground lost, but we will see what comes our way next week. The 10 year yield has been in its range as well. We have crude limits high for the week, but nevertheless, up and helping to send Oil Companies higher. Down 0. 4 , but still around 17. 25 an ounce. Lets get back to what is happening with italian bond yields and european bonds more broadly. Italian bonds catching a bid today. Are tightening up in germany as well, despite the fact that we have an s p rating review this evening and eu leaders essentially failed to reach a significant conclusion regarding funding, how they are going to fund europes economic recovery, and yesterdays video call. Are we overestimating the risk when it comes to italy and btps . Lets get a sense of where we are at the european economy. Peter dixon, Global Equities economist at commerzbank, joins us now. Are you worried about what is happening with italy at the moment . The ecb seems to have italys back. We are ultimately probably going to have some help coming forward orm the euro zone or the eu the ecb. Is it something we should be concerned about . Peter yes and no. Yes in the sense that it has worried me for a long time. Economy is in a pretty bad state. Ecb does have italys back. Its provided support. I think the biggest question is not so much what happens in italy. It is what is the best thing you can do to help. That is the potential area of conflict does putting strains on alleuro zone, and it is very reminiscent of what happened a decade ago. That didnt end well. Hopefully this time around we can find a better solution. When do you think that is going to come . Angela merkel clearly believes a large stimulus packages going to be required, but those are words. As you say, weve been around this whole story before. I remember it vividly during the euro zone crisis with greece. Words are one thing. Actually getting down to nothing bolts, getting to details, that is a very different story. Close are we to settling this story in europe . Peter i think we are a long way getting a deal patched together. Countries like germany are saying we do not want to finance the package via grants. We want loans that they would have to repay. Point,s is that at some European Finance ministers will sit around the table and realize that if they continue with this hardline behavior, they are some kind of theyre going to create an even worse situation. They will have to end up with some kind of grant. Ultimately, they have to decide do we want to keep the euro zone together or not. Vonnie we had this debate once, and more or less decided that every buddy whats to stay in the euro except for britain, which obviously wasnt in the euro area, but in the european union. Arent those decisions made . Can we really get back into this morass . One of theink consequences of the corunna with is that all questions are back i thinke with one of the consequent is of the corona shock is that all of these questions are back on the table. There will be some soulsearching among political leaders as to whether they want to remain part of the euro zone. Not necessarily the eu. That has all sorts of horrendous consequences, etc. But you can imagine that unless things start to improve, unless the italians feel they are getting more support from eu partners, this debate is going to gain more traction, particularly given that the inulists are flying high italy. Vonnie how much fiscally leeway does germany actually have these days . At some point it is going to hurt germany as well if italy is on its back, if spain is on its back, and yet germany still wont acknowledge that that day is coming if it wants to stay in the euro zone. Peter theoretically, governments have an unlimited amount of firepower. Of course, the difference in the euro zone is that the likes of germany or france do not actually control the currency. That has been seated out to a supranational body. But if the finance ministers were to sit around the table and say we are going to do whatever it takes, they could probably patched together a sufficiently large package which will satisfy the italians. Unfortunately, there are costs i mentioned before. So in theory, they can do it. In practice, it will be rather difficult for them to go perhaps as far as the italians would like. But i do suspect that in the end, you will have a come for my ultimately will satisfy, but the germans will continue to grumble that the italians are being bailed out and not structuring the economy. So we will get into this neverending loop, and every shock,e economy has a these kind of discussions will recur. Crisis. Emember degrees now it is comparable to now. Some point say, at we will reach this conclusion. At some point, eu finance ministers will reach this conclusion. We dont know when that is going to be. In the meantime, the ecb is literally buying time with its programs. Is certainly front and center, and giving them quite a lot of latitude. Next week we got an ecb meeting. Do you think the ecb next week is going to up the amount of firepower available to protect the euro zone, and in what form do you think that will come . Peter i actually dont. I think next week is the point at which the ecb has got to say lets allow some time for measures to be put in place and have their effect because frankly, there was very little they can do anyway to prevent the worst of the economic crisis from happening. So what they are trying to do is ensure that economies are in a , butnable state to rebound i think this is when they can set for now, through the course of march and early april. Think ultimately, they will have to do more . Peter i think it is likely that they will, for the simple reason that it is all most a neverending pop, unless governments are able to find the. Iscal firepower whichis a comp my package if it is a comfort my package, then the ecb will couple he have to step in with , soidity providing measures the ecb is not done yet. On the a quick question u. S. Now, on the Federal Reserve. Andurveyed some economists the majority of them are not looking for the fed to be able to raise rates until 2023 or later. What do you see . Peter i think that is entirely possible. Banks canhat central pursue activist Monetary Policy i think is off the table for now. Monetary policy is all about socalled unconventional measures now, but when it comes to Interest Rates themselves, if anything, they have to the good nesscentral banks willing to increase monetary stimulus. I think it is going to be the they will stay for a long time to come. Vonnie thank you. That is peter dixon, Global Equities economist at commerzbank. Lets get a deeper dive into equity markets with abigail doolittle. Abigail we are looking at jittery trading on the day, slightly risk off. We are looking at very small declines, fluctuating. The stoxx 600 down 1 , but what really makes the picture at this point risk off, take a look at ud d elk ud and elk and lqd. Investors moving away from risk assets across the board. On the week, we are looking at the worst week for the s p 500 in about a week. Etf, downighyield for a second week in a row, the first time we have seen that in five weeks. Perhaps we are looking at some sort of Inflection Point around the nearterm rally. Maybe it will be interesting to see what next week rings. It seems like it was a long time ago, but it was this week. If we take a look at a fiveweek chart of oil, the gains over the last two or three days are not enough to overcome the huge selling pressure. The june contract down 34 on the week, despite the fact that we had two 20 up days. That is probably some of what has bled into the credit and equity comp lexus as well. Interesting, if we take a look at the s p 500 energy index on the week, off of nonethelessme but , but nonetheless up. It does seem as though some investors, Equity Investors out there are trying to bottom fish this beatendown sector. Is actually the only up sector for the s p 500 this week. Vonnie thank you for that. Coming up later this hour, intel is another company withdrawing its fullyear sales forecast, causing uncertainty citing uncertainty caused by the covid19 pandemic. We will speak with ceo bob swan. This is bloomberg. Guy from london, im guy johnson, with on a in new york. Ons is the european close bloomberg markets. Lets get the first word news update with rick with ritika gupta. Ritika the u. S. Is now the global epicenter of the outbreak. Some 870,000 people in the u. S. Have been infected. New york city has been the hardest hit. More than 16,000 have died there. Progress congress has now inroved almost 3 trillion spending since march. The latest is a 484 billion manager that adds funding to the Small Business loan program. President trump signs the measure today at noon new york time. The Federal Reserve may hold Interest Rates near zero for three or more years, according to a Bloomberg Survey of economists. The central Balance Sheet the central bank Balance Sheet storing about 10 billion. Almost all said that chairman powell has done an excellent or good job communicating the fed action. That was led by slumping demand for commercial aircraft. Motor vehicles and metals also declined. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Vonnie thank you. German Business Confidence plummeted in april as europes largest economy anticipates subdued demand because of the chromedome us because of the coronavirus pandemic. Francine lacqua talked to the ifo president. It is very hard to predict what is going to happen, but this forecast, 5 , is certainly on the optimistic side. It is very hard to make any protections at this point in time because uncertainty about the course of this pandemic is really very large. Francine but what do you think is the biggest risk for the German Economy right now . Thate risk is certainly this recovery everybody is expecting maybe a little in the Third Quarter, may not be coming, or maybe very slow. As people realize this, they will adjust their plans, and we cannot exclude that the credit will spread to the other areas of the economy, to the financial sector, so there may be knock on effects of the very strong impact of the crisis, which can make the recession a lot worse. Francine so you think the applications of the German Economy havent go into full the implications of the German Economy having to go into full lockdown will have other impacts . If Companies Open up, they face a large cost of getting things running again. If they then have to shut down again because there is a second wave, it is catastrophic for them, so that is some thing that needs to be avoided. I dont think we should take it for granted that a second wave comes, but there are other risks. We see that with this uncertainty. Companies are really cutting down their capex. Consumers are cutting down their purchases. s we consider that germany export markets are collapsing, all of this put together generates a very grim picture for this year and maybe also for the next. Francine when you look at the gross effect expected from the Government Program of 1. 2 billion euro, how difficult is it to quantify . Can you give us a sense of how you model it out . It is very difficult to model the gross effect because in the absence the gross effect the growth effect because in the absence of any help, we would see the outcome of catastrophic depression. What the government is doing with this aid package is really preventing the worst. What it cannot change is the fact that we are shutting down parts of the economy, other. Ountries are shutting down not one we want to imagine, but it is certainly the case that we are not in a situation where a Stimulus Program will have the normal effect where we can expect an increase in growth, stimulus and of economic activity. That is not what is going on. When we have lifted lockdown restrictions, we can talk about stimulating activity. The Current Program is more about survival. Francine do you see a risk that this economic crisis will spill over into a Financial One . The risk certainly there. At the moment, governments are intervening to try to provide liquidity to companies in germany and other countries. We have guaranteed loan programs where credit sums are guaranteed up to 100 , which is unusual. I think this just demonstrates that there is a huge concern that the crisis may spillover to the financial sector. That this important is preserved. There will be some kind of credit crunch, but the objective is to keep that under control. Ifo Institute President speaking to Francine Lacqua earlier today. What have we got ahead . We are talking to this man, the ceo of intel, bob swan, coming up on bloomberg. York, imve from new vonnie quinn, along with guy johnson in london. This is the european close on bloomberg markets. At t. Ge at the top of Randall Stephenson is retiring as ceo. He had been running the Telecom Giant since 2007. The current cfo replaces stephenson as ceo july 1. Stephenson will remain executive chairman until next january. More cutbacks on the way at boeing. The company is set to production of the 787 by about half. Plus, it will announce job cuts is set to slash production of the 787 by about half. Plus it will announce job cuts. Beend for jetliners has crushed by the pendant. The Small Business loan program created a bit of controversy, where hedge funds continued to work and arguably work harder given the volatile markets were allowed, because there was no reason not to, to apply for the ppp program, which gives you forgivable loans if you continue to keep on most of your staff. It looks now like they are going to be barred from getting in where perhaps other people needed more. Guy. At european look markets as we head toward the end of trading. We are down on the day. We do have some positive stories , stocks like nestle and santa fe rising today on the back of good numbers and sanofi rising today on the back of good numbers. We will have the details in just a moment. The close is next. This is bloomberg. Guy 30 seconds until the end of trading this friday in europe. European equities ending the week. Thats take a look at numbers. These are the pictures we find ourselves with. A negative day, negative week will ultimately emerge. We have had a bumpy session. And we hit highs midsession. A couple of attempts at that high failing and fading as we come in at the close. A quick look at the story over the week. Lets linger for a moment on what kind of damages being done over the last few days. I think cumulatively over the past few weeks we are bearing in european markets have gone through three back to back negative weeks. Not particularly great. A reasonably high range. Gaps worth paying attention to. In terms of todays session, lets take a quick look at what the numbers look like. We have seen some of the Oil Stocks Trading lower. That has weighed on the london market. Lvmh weighing on the paris market, down 1. 3 . We have seen lufthansa and a number of stocks weighing on the German Market more broadly. In terms of the sector breakdown, let show you what has been happening. Travel and leisure has been one of the worst performers in europe, particularly the session. We start to get the numbers over the next few sessions from the likes of lufthansa. We will talk about the European Airline space in a moment. Compass is down, lufthansa has been down, the Banking Sector has been week. Only health care in positive territory. That has been driven by a france. Today in utilities have done ok. That is the defensive story. ,estle was out with numbers those numbers look good. That has helped out more broadly. Still the food and beverage space down. Let show you other individual stocks stories were focusing on as we come towards the end of the week in europe. Atlas, Big Industrial company, coming out and say demand will drop significantly in the short term. Not seen the full impact of the virus yet, the Management Team saying earlier on. That weighed on the nordic market. That stock down 6. 3 . Lufthansa down a. 25 . It is suffering a liquidity crisis. Its numbers are out of next thursday. That will be interesting. We will talk more about that in just a moment. Vonnie in the United States we started out mixed and we are mixed once again, but very small boost for the overall indices. We made it up to 2800 and change , we are back down to 2795 and the s p 500. Longerek will be even because aside from the dire Economic Data we can expect, we also have a serious amount of earnings. We are only 125 companies in. Is down just. 1 . Each company individually getting looked at. We will be speaking with bob swan of intel in a moment. Investors not loving the report although it is hard to see what investors are reacting to. We will get bob swans taken a moment. The 10 year yield in its range. Crude at a 16 handle but we are seeing gains on the session and that is helping Oil Companies. Gold is erasing some of its gains as a little bit of Risk Appetite is coming into the session as we approach midday in the United States. Lets move to the individual 500 and seehe s p what we can thank for these moves. As you can see, we have