At when it came to adding subscribers but terrible in terms of revenue this quarter, down about 25 . A dismal day in the euro zone. These are the kind of numbers that should frighten markets. I think the ecb is doing the damage in europe, disappointing some people. The stoxx 600 is near session lows. We will get to that and i moment. Banks are down 3. 5 and maybe a little bit more. The eurodollar is down. Month, u. S. D of the stocks have had an absolutely cracking month. In europe,by 13 and nothing like that except for the dax which is up by around 10 . To the auto sector has come back. Vonnie lets get to where first guest because we want to go through some of the reasons why asset prices are at these levels. We had more out of the ecb earlier and we are joined by michael mckee. Michael, is the central bank keeping asset prices at this level the reason why we are bouncing so hard in the s p 500 . Michael its hard to tell. Many people are saying that. Newfed Just Announced a Loan Facility as part of its main street loan which has not even launched yet. On the basis of comments they got, the editing neutrons for businesses which are more highly levered or less credit worthy, a minimum of 500,000 will be acceptable and you will also be you to get the money if have less than 15,000 employees and certain criteria are met in terms of earnings. I advise everybody to read the term sheet. The banks can sell these loans to the fed. The original main street was at 95 and now they can sell 85 and the banks will retain 15 in this new tier of loans and we will see how attractive that is to banks once that starts up. These are for your loan so making the main Street Program available to more people. The fed press release as they are going to develop a program for nonprofits. Thats being thats been a big issue who say nonprofits need help as well so they are looking to expand the program to nonprofits but they dont have details on that. Theie this extends eligibility for the programs but its just one of the amount of ingrams the fed has unveiled munis and Investment Grade and high yields . Fed want to be dominant in these markets or does it indicate that it could be if it wanted to . Michael the fed wants to make sure these markets work. Jay powell was firm on this yesterday. These are not spending programs but lending programs in order to seen as athat its buyer of last resort so the markets will function. If you dont think somebody will take your paper, you dont want to buy it in the first place in the market seizes out. To make sureying that transactions continue. Apparently, when they got comments on the main Street Program which is the idea of lending to company smaller than the Paycheck Protection Program but not as large as big corporations that can finance themselves, they found another corner that needed to be served and thats the announcement today. Lets talk about the ecb. Im trying to understand exactly what the ecb did in totality postup it looks like a rate cut to me but the market seems disappointed with the new programs. Michael i think the market is trying to figure out everything that was announced. The ecb did not change his deposit rate remain refinance rate so the headline read no rate cut but really, what they are using is Monetary Policy is the targeted refinancing operations and they did cut the rate on that significantly. Thats kind of a new benchmark these days it seems. Those are loans to banks and then the bank lends that money to the Business World and if they do, they get a lower Interest Rate from the ecb and they can land at a higher rate so they profit off of that spread. Toy lowered the rate teltros 150 point lows even get down to negative 1 on a loan you are taking out in the introduced the pel whicht seems to be be open toit may nonbank lenders and it has fewer conditions and what you can do with the money. Taking seems to be policy in the direction of using banks to get money into the system rather than putting it out there directly. The euro zone rides on the banking sector. What was interesting is in the last crisis in the euro zone, the ecb used similar tactics. To looking at the peltro, maybe encourage banks to buy Government Debt as well. Is this part and parcel of what Christina Lagarde is signaling by providing the supercheap loans and reducing the criteria around them . They are keeping the spread a little tighter than maybe Christine Lagarde would have appreciated before a few weeks ago when she said it was not the ecbs job to keep the spreads even. Be that theyay will not have to spend on lending to buy sovereigns. And teltros are supposed to go into the economy not to make real loans but extend the economy. Pandemic Emergency Purchase Program that the ecb is using is designed to buy Government Debt. It still has a 750 billion euro cap but she made it clear that they would expand it if alsosary and they are being very flexible with jurisdictions which means we dont have to necessarily follow the capital key. We can buy as many bonds from any country as we want to when we will figure out how to make it fit under that later. If italy is in trouble, the ecb can buy italian bonds and bring down the spread to the extent that they need to and if they run out of money, they will increase the amount of money they will use. Vonnie thank you for that clarification. Bloombergk in on the first word news. China is rejecting claimed by President Trump that it deliberately mishandled the coronavirus. The president blamed beijings response on politics. The chinese want to see him lose the election. China does not want to interfere into an internal u. S. Affairs. The u. S. Oil industry is like to become the next sector to get a bailout. The Trump Administration may announce a rescue plan as soon as today. Oil companies could apply for loans and they might have to give financial stakes to the government. Thehead of the fda says agency is moving at lightning speed on an experimental coronavirus drug. They have reported encouraging drugs from a trial in the fda commissioner says the agency wants to see all the data before deciding whether to let the drug go to the market. Los angeles will become the first major American City to offer widespread coronavirus testing. For those who have symptoms to be prioritized. Day,l news, 24 hours powered by more than 2700 journalists. This is bloomberg. Vonnie live from new york, i am vonnie quinn. This is bloomberg markets. The latesta look at Business Stores in the news right now. Twitter has more users than ever. The coronavirus hit the advertising business hard. Down 27 percent in advertising yearoveryear. Twitter has 166 million users which is up 24 from last year. Mcdonalds says it has seen dramatic changes in customers. First Quarter Sales held at 4. 23 . Is planning to open 68 stores monday and lyft restrictions. The ceo says he expects the 775 stores will reopen within six weeks. Thats if the Coronavirus Infection rates continue to go down and state and local governments allow it. Thats your latest Bloomberg Business flash. Its been quite the bumpy ride already this morning for stocks. Major indices are mixed now with the nasdaq higher and the other two lower. Aylor its pretty risk off but some of the tech earnings are doing better than expected. You have the emerging markets index which is higher even with a stronger dollar. 10 of 1 . P 8 underperforming the broader income the broader index of the s p 500. Its the highest going back since march 11. A lot of this is related to the crude story. Crews gaining again today. Its up about 17 . You are to see the impact on the energy stocks. Shell is cutting their dividend for the First Time Since the Second World War and exxon mobil raising their dividend for the first time in 13 years all amid the energy crash. Thanks very much. Andclosure of many bars restaurants across the globe has lower sales. Will continue to drop and they are cutting costs. The ceo of key partly joins us on the line. Thank you for joining us. Lets talk about what is happening with the business. Are the Biggest Challenges you face now and how are your people . Thank you. Our people are fine. Many peoplee infected by the covid virus. Im happy to report that. Its a challenging time to the business. In all markets we are impacted to a greater or lesser extent and while we are starting to see signs of recovery in our largest market, china and initial signs of government cautiously lifting restrictions and other european markets, other markets remain low. Brewer ath for the this moment in time. Can you extrapolate from what you are seeing in china what lessons are you learning from the reopening we are seeing in china . We see signs of recovery, many bars and restaurants have reopened. Especially small bars and restaurants have less risk of spreading the virus. Thats where we see our business coming back but eager restaurants and bars are othercting distancing and things like Night Entertainment remain largely close. People are visiting bars and restaurants less frequently than what we have seen before covid. Vonnie you depend quite strongly on people drinking out so not necessarily the home segment of the population. Are you doing anything to increase your attractiveness to our customers who drink at home right now . 25 of our volume is coming from the home. We reengage in a different way with our consumers and customers. We see the consumers show up less frequent and move to wellknown brands. They want to be in the shop for a relatively short time and take the brand that they know well. No buyback so as a consequence, its a different mix in our portfolio. Doing too what are you offset the lost revenue from bars and restaurants and breweries who are not selling carlsberg right now . Can you offset that lost revenue . Broad, we have a very commercial support that means about our sales reps are business they would not normally go for. They go to retail shops and we move much more toward digital communication. The business is focusing on socializing because thats what beer is about. Suffers a bit from the. Urrent social distancing its beer is known for in person and this is been transferred online. We are basically redirecting our business toward at home. Do you think there is enough support currently for the bar and restaurant sectors . Is there anything you can do . Pubsw people who run around where i live in the u. K. And they have been struggling with the kegs they have and trying to find homes for those. What are you doing in terms of dealing with managing the inventory . Its tailormade, the kind of actions we do. Homeve been supporting the market is much as we can. Activations,ngful is an independent outlet so facilitating them and being able to process the orders. One is an idea called adopt a keg which is aimed at supporting the inventory by earning drinks to redeem when bars open again. Those have been wellreceived by the trade. Its been received well in the u. K. And denmark so we are engaging with our partners to help them through these difficult times including making sure they have fresh beer at the moment they will reopen again. Lets talk about what happens when economies reopen. I appreciate normality is probably a long ways off. You have one of the strongest Balance Sheets out there within the sector. How will you leverage that to take advantage of some of the longterm trends that will likely to be opened by covid19 . It is almost a privilege at this moment to have a strong Balance Sheet. We are weathering the storm in this amount of time. Have our ideas of what to do at the moment with some assets coming available. At this moment, we are fine. E focus on managing its an advantage to have a strong Balance Sheet at this moment in time. Sales in asia were actually quite slow. You have nearly 30 of your sales in asia. What are you doing to prepare for that kind of reopening environment . Asia is difficult because china is reopening with good figures coming out of china. Whether itrly to say is reloading the trade for good secondary sales. More positive signals coming from china. China andt in paul nepal and india are still in lockdown or just opening again so they are the cells is very slow. Vonnie we saw dismal gdp numbers out of europe. What are you doing to hold onto customers that may be switching to economy brands because of the coronavirus . The good news about the portfolio is we have quite a number of very strong local like the one in switzerland and one in sweden. Of when thererms is a crisis. You tend to choose the brands we know well. That they are less focused on premium parts of these brands. Changes inee some the portfolio and we prepare for that. Another part of the business we see growing well is the alcohol free beer. , very already a trend positive for beer producers but we see that accelerating a bit. If that is because of an underlying trend that people are more focused on health, we dont know yet. Maybe its too early. For ourpositive sign portfolio. Coming back to the issue of the Balance Sheet, are there opportunities out there . Are there any assets you are looking at and thinking about or wondering about whether or not there are trends you should latch onto. Any assets out there that you were looking at to say that looks good now and thats a trend to take advantage . Disappointed if you dont look at it and you would be surprised to talk about it. It is good to have a strong alance sheet, it gives us rebirth but we are very much focused on preparing repairing error business in the stores. Vonnie our thanks to you. The breaking news from the Federal Reserve are the hour, they are expanding the scope of its main Street Lending which wille mslp help more borrowers become eligible to help the economy at this difficult time of coronavirus. The 10 year yield is moving within a basis or two. Dismal Economic Data earlier particular consuming spending which is down 7. 5 and personal income is down 2 . A couple of stocks that are andng, tesla is up 4 twitter has been pretty volatile today, down. Still ahead, we will preview the csrt Quarter Results with eight media and entertainment analyst. Media companies have been reporting. This is bloomberg. Vonnie in new york, im vonnie quinn, alongside guy johnson in london. This is bloomberg markets. Amazon is facing criticism for how it is handling Worker Protections. We are joined for all of this i tuna amobi, cfra analyst. Itself, what will the street to looking for in terms of balancing Worker Protections with looking for better sales growth . Right. Good morning, and thanks for having me. Quarter,bviously this amazon is wellpositioned from its ecommerce business. You always hear a lot of noise about things like this, health is whose and show on Health Issues and so on. I think the company has done a good job navigating those. I would view those as headline risk as opposed to having any major impact in terms of this quarter, which is that they are probably going to beat expectations based on the guidance they provided last time. We know that there is a major spike in ecommerce volumes. The prime membership should benefit significantly from and forgetfinement, the amazon web services, which should be a major for sherry of this transition, as we saw from microsofts Cloud Business yesterday. Theres a lot of powerful headwinds that should really bode well for the q1 results for amazon. Vonnie right. Amazon seems to be in the winning camp in many of these niches. Overall, we have seen several media stocks already report. Who will be the winners, and who will be the losers . Tuna thats a great question. We just got out of the comcast earnings call. Clearly, the broadband business, companies that have highspeed internet should benefit from this surge in traffic. We are seeing streaming platforms, we just talked about amazon, guys like netflix and comcast going ahead to launch peacock in this environment really spoke to how trends are benefiting from these tailwinds. That havee companies themepark exposures, Live Entertainment that have really been hit hard. The advertising is down dramatically. That should affect media companies. I thing it is a mixed bag at this point, depending on the portfolio. The more longterm revenue streams, multiaffiliate deals, those seem to be relatively immune to this cyclicality. I think as with think about the , the questionar becomes how long the recovery takes, and no one really knows. For the most part, investors should be looking ahead to 2021 to see which of these companies are best positioned, and we think this companys have stable we think those companies that have stable. Usinesses guy i want to put these two subjects together. The prime video business that amazon has come a competition is heating up. Clearly it is a high cost part of the business. It, given theue multiples being applied elsewhere . Have that is a question we tried to navigate. One thing we know is that the crime Media Business is actually a major catalyst for the prime subscriber business, prime subscriptions. The Video Service is in a is a perk which we would expect to accelerate in this environment. You cant really value it at this point as an independent, standalone business. Theres not enough granularity to do that. That being said, theres a lot of intangibles that they are getting from the ability to provide that is a perk alongside somebody others within the prime subscription, and that is why they are spending heavily in content and whatnot. This year, we think that content spending could be north of 6 billion. On return of investment, i would argue that in these times that people are staying home, that argument for continuing to provide that will be even more compelling, as we see from others like netflix and disney plus. Guy can i ask you a more broad question . The s p is being driven by a handful of stocks, and concentration into those names seems to be getting greater and greater. As an analyst watching what is happening in this space, how are you factoring that concentration into your thinking about whether or not you want to own these stocks or not own these stocks . Tuna that is a very good question. S have really taken that lead, and some of that is these tend toause have a longerterm cycle, maybe less cyclicality in tech spending and things of that nature. That being said, when you look at the landscape, theres no question that there are sectors that are hit the hardest, whether the travel or casinos and all of those areas, retail. Investors are looking for safe havens. As you look at the faang stocks with all of the reduced noise about regulatory, nobody is talking about that at this point. The focus now is on which companies have the strongest Balance Sheets to be able to ,avigate these Uncertain Times ample liquidity, and i think these names have a significant amount of dry powder that should enable them to be in a much stronger position. I think that is what investors should be pokestop should be focused on. Mentioned the gambling industry just then, and i know you cover some of the casino companies. I am wondering, when we see personal spending down, do those kind of industries bounceback in 2020 . I dont think they bounceback in 2020. There is bifurcation in the industry. In china, by far the largest Gambling Market in the world, they just reopened not too long ago after this major shutdown. We know that gaming revenues in macau were still down almost 90 in march. April numbers are still awaiting. With think it is going to be a very long and arduous journey, and we dont see that happening as casinos have come back with limited reopenings. In the u. S. , the recovery will likely take much longer. Wynn resorts saying they will reopen by memorial day, which we think is optimistic, but even if they do, it will be significantly below capacity. A lot of these casinos have a fairly high daily expense rate that they continue to incur in the millions of dollars, even while these casinos are closed. It is really going to be a tough battle getting anywhere close to some semblance of normalcy, and we dont see that happening this year. We are going to leave it there. We really appreciate your time today. Ask for the analysis. Cfra media and entertainment analyst. Facebooks First Quarter revenue showing Strong Demand for the covid19 pandemic. Facebooks cfo spoke with bloomberg about which sectors were under the most strain. Be morenk we will cautious. We are blessed with being able to work from home and operate relatively effectively. I dont think we are operating at 100 , but we have 95 of people working from home. Content,le to moderate keep connected with business customers, so we are able to do a lot of the essential functions without coming into the office. We do have a handful of employees that have to go in, so we are focusing on safety for those folks, but we will probably be more cautious. We can do our jobs from home, and we want to make sure the shared infrastructure is available for those who do need to be going into the office. We dont want to overload public transport and the like by going back to quickly on that front. You recently did a 5. 7 billion deal in india. Are we going to see more investments like that . Will they be more like investments or partnerships . India is a very special market. This is a very special company who has done really great things to bring hundreds of millions of people into the digital world, so geo is an exceptional effort. India is a very important country for us. It has been a driver of growth for facebook and whatsapp for many years now. India is a critical market for us in the long term. We were really fortunate to have the Balance Sheet to be able to make an investment like this in a troubled economic environment, and we look forward to platforms toth geo help Small Businesses connect whatsapp andle on drive payments through that. That sounded on the call you would be doing more of this. I am curious if you can shed any more light on regions or economies in particular that might peak facebook its peak facebooks interest. Generally, whatsapp and the power of that platform and doing , ie on the payments front think there are opportunities to do that. This was clearly a very special opportunity and something that warranted by far the largest investment we have ever made. The facebook cfo talking to bloomberg a little earlier on. Coming up, we are going to hear from the mayor of columbus, ohio, andrew ginther, as they navigate the pandemic. This is bloomberg. Taylor this is bloomberg markets. Im taylor riggs with the muni moment. I am joined by the mayor of columbus, ohio, andrew ginther. It does look like columbus would qualify for the feds liquidity program. I am wondering if you plan to take advantage of it. Andrew at this time, the city of columbus does qualify for that federal municipality plan, but we dont plan to reuse that. Columbus has a aaa bond rating from all three major rating agencies, and these likely would be higher. The fund from the muni plan will be critical to other ohio cities that are struggling. Taylor how much of a deficit are you forecasting given the drop in revenue as the shutdown continues . Cities as you know, ohio are different than many across the country. Only 2 of local governments in america are funded through individual income tax. Aboutbout 70 per 78 of our general fund. So resources come from income tax, so it is critically important that we continue to do our part to slowly and carefully becauseur economy here ohio cities are particularly at risk, and that is why we are pushing so hard for phase four of stimulus that will go to local governments. Taylor curious if you are seeing a bit of a drop in revenue. Any plans to help the expense side of things to help the projected budget deficit . Anticipatinge anywhere from 15 to 25 reduction in revenue tax this year, so we have done a couple of things. Travel. Ires, no we have been able to, and the past quarter alone, realize about 30 billion worth of savings. We have a 1 billion annual budget. We have about 100 million available, about 10 of that, in our rainy day reserves, so we are positioned well. That is why we have been able to maintain and protect that aaa bond rating, but a lot of other ohio cities are not in the shape that we are in, so really pushing hard because ohios economy can only recover if metro areas are driving. 85 of the state economy comes from our metro areas, so we have a Critical Role to play not only in the state, but obviously metro areas for the country. Taylor the governor has said he wants to start looking at opening up ohios economy. On the local level, what are your plans for reopening . Andrew we will begin to reopen slowly and thoughtfully on may 1, with our top priority being Public Health and safety. Any business that reopens must adhere to strict guidelines around masks, social distancing, and personal hygiene. On may 1, dentists and veterinarians can resume practice. On may 12, retail can begin to open. We havent quite decided yet on barbershops, salons, restaurants. We are working closely with governor dewine on this. Mass gatherings of more than 10 people are still forbidden. We are investigating complaints at local health departments, focusing on education first, citation and orders only to clubs if necessary. Taylor what are you hearing from some of the Small Business is about how comfortable they are reopening, and maybe how effective the ppp program has been . What are some of these Small Businesses telling you . Andrew what we are seeing and hearing nationally and locally ppp if that up to 90 of women and minority owned businesses are being left out. Toks are giving them out companies with existing loans. The disparity is huge. 79 of black Business Owners have applied for loans, but only 40 have been approved. For a woman in columbus who owns a beauty parlor, she was unable to get ppp loans and was told most of them were given to businesses that were under 500 employees, but here in columbus, 80 of companies have 20 employees or fewer. Because of the lack of access to minority andmall female owned businesses, we are creating a local micro loan program to support our companies. Taylor our thank you, as always, to the columbus, ohio mayor, andrew ginther. Much more next. This is bloomberg. Guy from london, im guy johnson, with vonnie quinn in new york. This is bloomberg markets. A massive months for equities. The bond market is in focus. Lets talk to bill baruch of blue line futures, who joins us out of chicago. As i say, the s p, massive month to the upside. S p futures seeing a similar story. What are you seeing as to where we go from here and whether this movie is overextended . Bill huge move, and i do believe it is a little overextended, especially in the near term. I think we have seen a little bit of exhaustion, but big tech tends to lead the way. We saw good earnings from google earlier in the week. I think we are also seeing a little bit of a paring back from these exhausted levels ahead of apple and amazon today. This puts the s p at a critical level. Guys,ot a chart for you 2870. Indicatorsumber of that also come into that area. Youe get below there, will see the selling snowball, so that is your line in the sand for s p. Guy bond market, what do you thing of the 10 year . Has been the this 50 basis points which is become a psychological, almost round number. Market is buoyed from that 50 basis points. I think we are setting up for one more leg lower. In the futures, we use the prices, so we think the prices will rise. Our program got long and the fiveyear treasury yesterday, so we are looking at the shorter end of the curve as well, seeing lower rates being below those five years. We are also positioned long the 30 year bond crisis, so we think across the board, prices are going to rise. The sort of correlates with exhaustion on the equity side. That is what is going to get those yields lower and treasuries higher. Guy final quick question. Obviously, massive month for crude, particularly in the united states. What is your sense of where we go from here . Bill looking at the july contracts, that is what everybody is focused on. Huge support level. Now we have moved back above 20 in the contract. I think we are going to see one more big wave of weakness come when the june contract starts to expire. Washout. Cting one more i dont know how low it would go. I would be surprised to see june at five dollars. Weve been negative crude for a while, but we will switch that bias probably middle or late next month. Will wait and see what happens. Thanks for your time today. Bill baruch of blue line futures. Vonnie lets get the latest Bloomberg Business flash now, a look at some of the biggest does this stories in the news. Socgens trading unit was wiped out in market volatility. Thananks shares lost more half of their value this year, one of the worst performers among european banks. It was a stunning move by Royal Dutch Shell to cut its dividend for the First Time Since world war ii. The ceo called the decision inevitable because of turmoil in the oil industry. Still, it is likely to be a shock for investors who have counted on the companys generous payouts. Betbanks net losses will worse than expected, now saying it will lose 8. 4 billion in the year that ended in march. The reason, the drop off in the business of Office Sharing startups wework. That is your latest Bloomberg Business flash. Coming up, ecb president Christine Lagarde says the european economy may shrink 12 in 2020. We will get the take from socgens kit juckes as we count you down to the european close. A quick look at where we are market wise, the s p 500 has been paring its declines, still down 0. 7 , and the nasdaq has turned negative as well. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. From london, im guy johnson, with vonnie quinn in new york. We are coming you down to the european close on bloomberg markets. Last trading day of the month, and we are at session lows. We have basically roundtrip to the gains since yesterday, almost exactly back to where we started. The stoxx 600 now down by 1. 85 percent. What was seen from Christine Lagarde. Eurodollar now in positive territory, 1. 0953. Brent crude up by 14 . Percentage tombs percentage terms, a fairly big move. Vonnie here in the u. S. , we are off our lows at the session, but even the nasdaq turned higher for a moment. Broadly speaking, we are a bit risk off. Given yesterdays bounce, it is probably not something
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