And President Trump does not want to talk to president xi. The highestcords number of deaths in a week. And we have the gdp data from germany. Welcome to daybreak europe and welcome to friday after a rocky week in the market. On thee bit of green screen coming through from asia. Yesterday there was a rally on wall street. Initially, u. S. Stocks dropped after jobless claims again but we got a rally. Making a comeback. The gap between tech stocks and banks getting to an extreme level. Utures, a mix for europe, right on the screen yesterday. European futures up 1 ahead of the german gdp data looking to post the worst contraction for germany since 2009. 10 year yield dropping about eight basis points through the week. The dollar heads for a weekly aim speaking to risk off as well and oil heading for a third weekly gain as well. Some science the markets are slowly rebalancing. Kick off the latest development of the coronavirus with the global death toll exceeding 300,000. Cases fueled alarm among officials over a second wave in asia. Have been. , states issued of initial guidance on how to reopen restaurants, bars, and businesses. And recorder and joins us. Annmarie hordern joins us. The guidelines for the political football. The cdc wanted to release something but the white house said the guidelines were too prescriptive. The cdc well now release guidelines for states going through phased reopening. For washingactices hands and how to spot potential symptoms. For bars and restaurants, parties size. Limiting routes to heavy transmission areas. The kinds of things we have been talking about for the last few weeks. This is coming into play for new york. In new york state, five of the 10 regions will begin reopening. Not so quick for new york city, long island, and western new york. The epicenter come at the tristate area will remain shut for the foreseeable future. One thing that might get traders excited is the New York Stock Exchange will reopen doors may 26 with a small contingent of brokers with masks. Fair enough, we cling to any signs of life at the end of the tunnel. Speaking of the tunnel that still seems pretty long, if we turn to meet u. S. China relations, this could be playing into the risk off sentiment. Tough rhetoric from President Trump. Does it look like rhetoric or are the relations souring . A bombshell in beijing. The president of the United States saying he does not want to talk to his chinese counterpart. He also said the u. S. Would save some 500 million if it cut off ties with china. It is just it is ever more clear that the relationship is 180 from and what a january. Relationship is on thin ice and what a 180 from january. Visas are an issue. Cyberspace. Journalists being expelled. The status of taiwan. All of these issues yang resurrect dead and get ready, this is going to be the theme from now until november. It is not just President Trump blaming china for the virus but we are also hearing from joe biden who is also making noise about china. Going into november, china and covid will dominate the election. Nejra thank you so much, annmarie hordern. Let us get to the first word news. Wti prices surge to the highest in five weeks. According to petra logistics, the cartel cut exports i nearly 6 million 6 Million Barrels a day. The latest jobless claims numbers for the u. S. Were error. D by a clerical 300,000 filings were incorrectly reported. That error likely distorted the National Figure pushing the eight week total to over 36 million. Boughteral reserve board etfs on its first day of intervention in the corporate debt market. It also showed total assets rose to a new record of 6. 93 trillion. France is set to unveil aid packages for the auto and aeronautics industries. 18 billion euros has been promised for the tour iism sector. And klm as well as air france have obtained billions of euros. 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. Coming up, the coronavirus outbreak could cost the Global Economy nearly 9 trillion according to the Asian Development bank. We discuss the fallout of the pandemic next. This is bloomberg. Nejra this is bloomberg daybreak europe, i am nejra cehic in london. Risk radar. Green on the screen for asia. U. S. Futures edging into the green after a rally at the end of the session yesterday mainly led by banks. The 10 year yield is steady. Dollar heading for a weekly gain and oil heading for a third weekly gain as well. Overall, a painfully a pay a painful week for Global Equities. The Asian Development bank adds that it depends on how long the pandemic will last. A shorter containment period coupled with strong policy measures could impact could limit the impact. The latest jobless claims report from the u. S. Has been marred by inaccuracy. Connecticut incorrectly recorded unemployment claims, 10 times higher than the correct number bringing significant distortion to the latest report that is take on elevated importance as the pandemic upends the labor market. The gdp republicans say the fed chairman Jerome Powell backs further action to prop up the ailing u. S. Economy. More is needed immediately. For the hour is Georgina Taylor from Invesco Asset management. Thank you for joining. I want to talk about the fact that we saw quite a big recovery in bank stocks yesterday which led the s p 500 higher. Thanks along with Energy Companies have been the most enough industries during the crisis while tech has been outperforming. What does that disparity between tech and banks tell you about the recovery of u. S. Equities right now . Georgina good morning and thank you for having me. I think the disparity has been so extreme for such a long period of time, i think investors have been searching for quality and how you is a big that challenge in the current currency market. The recent performance of thanks stocks, and energy is almost a positioning affect where u. S. Had a lot of people hiding in the Technology Stocks with some visibility on cash flows but environment, it does feel as though technology is an area you can take a fundamental veto. Where it is interesting if we think about bank stocks in particular is during two of the previous crises, banks were at the epicenter of that and now there is a huge crisis in the current environment. Perhaps though it is a reminder that banks are not the epicenter this time around. What has been dominating markets long before this crisis hit maybe there are signs that can try to reverse or become less extreme going forward. Nejra interesting. So come it has obviously been a tumultuous time for all of us. As you say here now in may and we have seen a significant recovery in Global Equities from the march 23 low and how tilted toward risk is your portfolio . To be honest, we are fairly neutral on risk. We have the flexibility to invest in all asset types so we are lucky in one aspect that we are not reliant on equity markets at the moment. That there have been a big recovery in risk assets and i think it is because initially we all wanted to put the coronavirus risk on a very limited timescale. Q2s was about end of q1 into and it would be a shortterm shock to economic growth. Of the commentary this week has alluded to and from policymakers as well, it may go longer than we expect. When we do our valuation work on equity markets, we feel there is another potential downturn to calm, to equity market to come, to equity markets in particular. What has not been priced in is how slow the recovery could be and what that means for equity markets is it will take quite a long time to get back to the earnings levels of 20. And the complication of that is the valuation model has longer input and that will dominate and it will bee think harder to find what the valuation is if you think the recovery will be quite complicated. Nejra if it is hard to find where the value is, what are you doing around u. S. Equities versus u. S. Credit right now . Georgina i think within the space, there are some relative value opportunities potentially. We may not want to add a huge amount of equity risk but favoring the larger cap stocks in the u. S. Relative to the smallcap is something we think takes a lot of sense. And in a way, the smallcap stocks are still quite expensive to us and also there is quite a lot of credit risk embedded in capital arena from the Balance Sheet perspective. As this carries on, that may become more of a focus. Even though we do not want to add a lot of equity exposure to the portfolio, favoring large caps over small caps make sense. In terms of credit space, we do want some exposure. Maybe more so outside of the u. S. From a policy perspective. I think having some Investment Grade exposure makes a little bit of sense for the portfolio space. T our global nejra i have heard that from quite a few people. Interesting. Regina taylor from Invesco Asset management stays with us. In taiwan, a semiconductor plans to spend 12 billion building a chip plant in arizona. Tsmc plans to complete construction of the factory by 2024. It makes semiconductors for names like huawei and apple. Any shift in european production will be part of broader discussion between the two companies. May come when Nissan Unveils its threeyear plan on may 28. Renault has also promised to share cost cuts this month. A vaccine from santa fe. The seduction from the pharmaceutical companies chief executive has sparked outrage and france. The french president plans to meet with Company Officials next week. That is your Bloomberg Business flash. Googles former chairman eric schmidt says china should have alerted people more quickly about the spread of the virus. He spoke with David Rubenstein on leadership live about that and how the text or is hoping to limit fallout. You have to solve both problems. The health care problem. And the Health Care Workers in our country have done a fantastic job. As weer, this all started worried that hospitals would be overwhelmed. We have managed to abide that through extraordinary work from state, federal, and local levels as well as a hospitals. You also have to come up with an economic solution. The level of unemployment that we now have is on the order of and approaching that of the depression. We need that perio to be as short as possible and the treasury has generally done a good job of getting money into the system. I worry that a bankruptcy problem. Eventually come you can float the businesses long enough but if there is no demand, they cannot be in business and those are permanent job losses. When i look at the actions of people, my primary cynicism is this bead with which action occurred. If you think about it, much of the deaths could have been avoided now had we acted on months earlier in every decision. And that is a lesson from the pandemic. David you are a major philanthropist. How have you changed your philanthropy as a result of this crisis . We decided to work on this. Was it became clear this not a one or two months scenario, we formed a special task force to look at things that could act quickly. We have now given tens of millions of dollars in that number with that number increasing over time. The initial focus was on things that could happen quickly. Ventilator training was the most interesting. We thought we would need an infinite number of ventilators and nobody knew how to operate them. We funded a number of projects to train people on ventilators. David you have also been a venture investor. You stepped up Venture Investing at google. What are you saying to someone that might be a venture investor who might want to follow eric schmidt . Venture investing is a long game and it is based on key entrepreneurs. Venture can be understood as find the entrepreneur and give them some money and hope and pray and help them. I dont think that is any different now than it was 30 or 40 years ago when i was in a small startup. What i would say today is that and i always believed that biology would be an enormous issue. Pandemic has emphasized the incredible scale of businesses that can be built now. The most obvious ones are in telehealth. In two months, you have changed the economics of health care. In two months you have reimbursements for telehealth which allows you to think about connected devices. Wearing a smart watch that is helping monitor your health. It calls you and says, it you need to have a Video Conference with a doctor. Why is the system not triaging patients in . Do an analysis again with my pin the permission and say, he looks pretty good in them we will decide what health care he needs to be routed to whether it is urgent or not. That would make my time more efficient as well. Lived much ofe your career in the Silicon Valley area. How has selleck changed as a result of this how has Silicon Valley changed as a result of this . During my career, Silicon Valley has changed dramatically. Tech companies have institutions of governance and they have embedded competitors. Opponents of political strategies. I dont think that is going to change. They are clearly going to be bigger. And the simple answer there is because they are doing more fundamental work. Googles former chairman and ceo eric schmidt. Coming up, chinas industrial output increases for the first but since the outbreak retail sales remain weak as the country tries to recover from the Economic Impact of the pandemic. We will discuss this next. This is bloomberg. Nejra this is bloomberg daybreak europe. Here is what you should be watching today. The third round of brexit talks between the u. K. And the eu are due to come to a close today. Euro Group Finance ministers are meeting to review the progress on the safety nets. We will get a read on how hedge funds are navigating markets during the pandemic when we get filings later. And we will be keeping an eye out for u. S. Retail sales and Industrial Production data. Chinas industrial output rose in april for the First Time Since the outbreak but economists cautioned it would the slow. It would be slow. 7. 5 more thanll the projected drop of 6 . Georgina taylor from Invesco Asset management is still with us. We dont want to necessarily focus on one data point but does this suggest to you that the recovery in china is much more supply then demand led and if so, what are the implications of that . Georgina the difference between the retail side and the industrial side is interesting. Discussions of the mathematical affect of switching things back on and i do wonder with the Industrial Production data if we are seeing the effect of factories coming back on stream, production beginning again which is clearly a positive. But the demand side may take a little bit longer. That feeds into earlier comments about how complicated and slightly disrupted the economic recovery may be because it is going to be hard to get all of this all aligned and for everything to recover at the same pace. It also feeds into the policy response that is required from here and that we are not done yet on that. Nejra all right. You do have an idea in your portfolio to deal with the dollar versus the renminbi. We observed yesterday how steady the yuan had been. I think what is interesting for currencies is cross emerging markets, there seems to be a renewed not enthusiasm but acceptance that perhaps a weaker currency has to be part of the solution. Our view on the chinese currency innot one that expects a cap the currency but a steady depreciation appreciation of the currency can be helpful as part of the policy toolkit and is part of the economic recovery ahead. I think for us it is really taking the longerterm view of where we believe the fair value, the level of the renminbi will be on a longerterm basis. And it would be helpful from a policy perspective in terms of the global recovery. Interesting. Georgina taylor from Invesco Asset management stays with us. We have much more to discuss including global bankers pushing back on negative rates. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Good morning from london. This is bloomberg daybreak europe. Global coronavirus deaths top 300,000. The cdc publishes guidelines for u. S. Businesses. The Asian Development bank says the global cost of the pandemic could top. Sales in china shrink further amid Political TensionPresident Trump says he does not want to talk to the chinese president. Italy reports the most daily fatalities in a week as a government prepares to ease the locked down further. We have the gdp from germany. Welcome to daybreak gear. It has been a rough week for stocks heading for a weekly loss. Looks like we could have some risk on coming through this friday. U. S. Future is not giving us a lot of direction after we saw a rally late in the session yesterday led by banks. Starts taking an initial hedge. European futures firmly in the green though we look ahead to what could be the worst reported gdp data from germany since 2009. The 10 year yield is fairly steady though it has dropped some eight basis points this week. It also speaks to the risk off tone thi