Investors raise a glass to remy sending shares to the stop of the stoxx 600 it expects demand to bounce back in the second half of the year saudi arabia and russia reportedly reaching an agreement to extend the counts for another month but will still be held today. Lets kick off with fresh data crossing the wires. Weve got uk car registrations coming in for the month of may 89 lower year on year to just over 20,000 unities. We are looking at a picture of sterling versus a dollar recently trading coming off 60 basis points the auto sector selling off quick sharply. A few Different Reasons for that part of that the reversal for the trade come together in the last several sessions. Part is to do with the german stimulus package unveiled in the last 24 hours. Let me give you more detail. German stocks making autos the worst performing sector in europe after the package announced overnight failed to provide must feeding help. Providing a raft of measures including help for electric car buyers the 130 billion euro plan aims at restarting demand and sweeping vat cuts and tax help for families with children and on the back of a 750 billion euro deal agreed in march. Speaking to reporters after talks extended in the night. Angela merkel said the package was an investment in the countrys future translator i believe especially if we want to give the next generation the future, we must vest in the future today. That has guided us it is right and will prevent worse things from happening. That does not mean the future will be easy it is an Ambitious Program and not one that gets out of hand. That is why im convinced we have found the right balance we are looking at a negative picture in stark contrast to recent trade yesterday, the stoxx 600 surged 2. 5 that was led by 4 in the dax. Clearly, we are seeing a little profit this morning. We have the dax down about a quarter percentage point the ftse mib teetering around the flat line. The main event, the ecb meeting, the main request regarding Christine Lagarde and the governing council and the bondbuying program. A lot of attention there we are seeing a little reversal in the euro trade. That has strengthened very much and we are seeing a little bit of eye retreat as we come in today. Lets look at the dax in more detail you had daimler down sharply this morning we have bounced off the lows of the morning. A bit of green on the board. We did hear from adidas earlier today. They are seeing a return to growth in china in the month of may. So optimism there. German index is trading a little lower this morning lets look at banks. Commerzbank, Deutsche Bank very central to todays trading session given the ecb meeting. On that front, lets flush out what to expect today the central bank is forecast to ramp up the 750 euro emergency bond buying scheme the ecb may also expand purchases to include corporate bonds. Analysts will be looking out for any response and move towards debt neutralization as well as the forecast of growth in the eurozone getting out to annette madam lagarde has been clear she thinks the fiscal authorities need to be doing more. We have seen the fiscal part of the nation has stepped up. Can we expect more bold action from the ecb today it is widely expected, the ecb scale up the Purchase Program by up to 550 billion euro the current rate, the 750 billion euro package initiated in march is running out of fire power in october that is probably not the right signal given of the eurozone that might shrink by 8 according to estimates by the ecb. Estimates at 0. 1 that is clearly close to danger territory that it could contract well get a bold move from the ecb today. Also given other commentary from other Central Bank Governors influential in the governing council who were saying it is not the time now to see. It is the time to act and we need to get a bigger package of course, we want to hear we need to hear more about the point of flexibility for constraints from the German Court Ruling Christine Lagarde, b the ecb president said that they are undetoured from deploying the program at full flexibility. Also saying there is no such thing as a key for the program it is important for the market to hear that again and again given all the abundance of the bond issues which we are most likely getting this year given all of the debt that the sovereign states will have to raise on the markets in response to the coronavirus crisis. Apart from that, we might expect some tweaks to the tearing system here and there. Most likely not on the front where weve got some and some commentary where the ecb are expanding the asset horizon where their buying most likely corporate junk bonds because they are already allowed to buy sovereign debt which has junk state tuesday which they have a grandfathering rule since april on sovereign debt which has the rating there will be a wide arena of topics they will cover today it will be a virtual format the press conference they will not go on the inside of the ecb again thank you very much do stay with us. Director European Finance at citi why do you think it makes sense for the ecb to announce the possible extension of the Bond Buying Program given the Current Program is so far from being exhausted . Thats going to be one of the arguments put on the table to say they think this is true and the emphasis too big you have to remember the institution has to deliver on the priced mandate over the medium determine if anything the hero system will have crunched ahead of the meeting. Well show by 2022 it will be an even bigger gap. If you have an even bigger gap, what is your mandate if you want to prove you have one in your compass, you need to increase the size of the program. More debt, more purchases. That has to be the logic of the ecb. Yet Christine Lagarde has made clear over the past few months, she wants to see fiscal authorities to do more in the role supporting the economy. Now we have seen that with the recovery funds delivered a long ways off from the approval the commission of germany and france if this isnt enough to give ecb reason to pause, then what is. How does this dynamic really work it should be the other way around with the behavior finally, they are putting their money where their mouth is there is this final leg of the stool of the economic and Russian Union to establish the whole system the ecb will buy that issue on behalf of the eu 27. If you think about the proportion of things and the need to lock in cheap funding, that issue ens requires the ecb in the company it would be a problem if ecb was upping the ante on the Purchase Programs where governments would not be seen behaving as they should they will not deliver on the fiscal side of things. I think now is the right time to be more reasonable think about it, there is about 1. 5 trillion euros that will be the fiscal hit that the crisis will create. The ecb has to absorb and is the name of the game once they bite the bullet to realize some sort of visualization is necessary, thats when the ecb should accompany it i have a real problem with debt beyond a certain level. They tried to show us after the last financial crisis as well. Surely there has been a lot of evidence as well when you increase, it does not increase activity and gdp arent we going way beyond the realms in which increased debt will increase the Economic Activity arent we leading ourselves into a disastrous position . Caller you only have two buyers of that debt, central bank sector. You will need somebody else to do so. The risk is that households will then have to be the buyer of that debt as the buyer of that debt, they will have to spend that money you are today creating the opportunity of buying debt really cheap to fund future investment programs. That has to be the priority. Ecb being the central bank but also having the secondary mandate. Once they are the elements kicking off next year, it has to be the economy it would be sensible to think that would allow Central Banks to go up one final point, perhaps if the ecb doesnt surprise with something positive today they will have to do more later. This is a wasted opportunity in terms of time and liquidity. Despite some divergence in the council, they will see the light. What they need to go long, go big and talk about investments let me ask you about the divergence and the governing council. Would it be a problem for the stimulus to come replicating that standoff last year before mario draghi left. I think justifying the position from the different angel was a valid position they will bare fruit when those become available in the meantime, the playbook cannot change it is one country, one vote at the time support is absolutely needed. Imagine the siesz of the program skpapded as much as 760 billion. If you expand by 750 billion, everyone knows that is inefficient. Thats going to be counterproductive and it will force the ecb further down the road to do more. That is when it started to do more and yet, we have the reaction sounds like this will be an important meeting to watch director european economics at c citi be sure to join annette and me for this afternoons ecb decision time. Coverage begins at 13 40 cet freeing up access to loans to smaller towns and counties and several key institutions all states will be able to designate two cities or counties for notes. And designate institutions that rely on activity such as transportation or airports to borrow under the plan. Coming up, well look at the ftse review. Easy jet and carnival falling out of the stoxx 600 no surprise what britain has been doing during lockdown Home Improvement back b q is one othf e top brands benefitting from it. Insecurity on a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley in supporting feeding america and your local Community Food bank. And your local Community Food bank. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back remy cointreau has warned profit falling. But marks an improvement of previous forecast of 55 slum thanks to consumption in the united states. The group will focus on higher priced products and set new medium term financial markets. Adidas posted a positive performance earlier than fraft and expects chinese Second Quarter sales to come in under 2019 levels again. Over twothirds of Global Stores have at least partially reopened including shops in europe. Outperforming the broader european market. Lvmh says it is not considering buying shares of tiffany on the market. Finding ways to negotiate the 16. 2 billion deal to acquire the jeweller lvmh shares down about 0. 5 . Getting to charlotte they havent really reached the billion dollar question. They have just said they are not looking to acquire shares on the open market. Thats right. This is the key question something they already said before at the end of march already whether rumors started to swirling that lvmh may be trying to find a way to get the deal cheaper they bought tiffanys in november at 150 per share. Now shares are much lower on the back of the pandemic reporting that the deal was uncertain. Confirming it was a Board Meeting focusing on the development of the pandemic with results of tiffany and agreement between the two groups that is really key is lvmh trng to negative ocean yit the timing the deal is 2020 but it is now quoted yesterday as to named sources saying they are seeking legal ways to renegotiate the price with tiffanys reporting the quarterly numbers tomorrow well hear from their side saying lvmh hasnt asked tiffanys to renegotiation one of the ways would be if tiffany bridged the financial government one of those rules they are exploring there. Shares trading in the red this morning. Down 0. 5 on the frencor flushit for us the easy jet has dropped out of the ftse 100 having lost 45 in market value so far this year as lockdown measures took its toll on the airline the Aerospace Company from falling into the ftse 250. Diy Company Fisher has been added to the index instead for sports better and repair company homeserve. Lets get to steve the reshuffle really reflects the lockdown trade that has suffered the most now investors seem to be focusing on the reopening now when the current market narrative is changing a long, long time ago in history i usedd we had di mention data c was probably the most famous reentry and it fell 31 there was a degree of the passive trackers that had to own that stock they all got out it was an interesting move that got out. They are pretty much rules based. They are getting the market cap. King fisher and the reason im in the glamorous location of valley park and retailers and one of the most glamorous locations yet is showing king fisher really on the up over in france as well have been on out. What have brits done during the lockdown no, no apart from that. Theyve done diy and Home Improvement now. Kingfisher have moved in easy jet down 45 . Carnival down 67 have fallen out as well. We have seen trends moving weve heard british airports are trying to open i spoke to citi airport and they are trying to get flights back on that depends on the home sector who yesterday was underlying tough quarantine for those coming into the uk also potentially on the move again if easy jet and carnival can have a swift rally steve, i think everybody is a little tough i made a trip over there i was plently surprised. I drive through there twice a day. You can never be too tough ill have to make a return trip you do know our boss comes from croiton i do. No conflict of interest there. Thank you steve. The Trump Administration has picked the collaboration between astrazeneca to be one of the Top Five Companies the only European Drug maker on the short list joining moderna, johnson and johnson, merck and pfizer we are seeing a strong bid for the Health Care Sector more broadly as they have taken more out ofthe cyclical sector and put it back to work on those names. Fda has green lighted a test developed by roche to identify those likely to develop covid19 the socalled alexes test could help doctors make an early call whether patients will need mechanical help with breathing hydroxychloroquine said to be no better than a placebo to fighting covid19. The results concluded there was no difference in both sents of patients but minor side effects were more common in hose who took hydroxychloroquine. Still coming, remains unclear whether opec will meet mo aeciorm the disn. Refter the break 300 miles an ho, thats where i feel normal. Having an annuity tells me my retirement is protected. Protected Lifetime Income from an annuity can help your Retirement Plan ride out turbulent times. Learn more at protectedincome. Org. Welcome back to street signs. Im Julianna Tatelbaum these are your headlines a government road block drives stocks lower as they fail to fuel incentives. Reversing a threeday rally in u. S. Markets the ecb is largely expected to expand the Purchase Program as the staff prepares to release the election for the eurozone economy. Trump administration plans to block Chinese Airlines coming into the u. S china says it will allow more foreign carriers to enter the country. And breaking rank. Speaking out against President Trumps plan to use the military the option to use active duty Law Enforcement should only be used as a matter of last resort and only in the most urgent and dire situations. We have some fresh uk pmi data crossing the wires here on the construction front the may construction pmi has come in at 28. 9 up from april which came in at 8. 2, the worst on record. Analysts were expecting slightly higher but is significant bounce off the april low. A little color from the market who produces the survey. A gradual restart helps to alleviate the down turn in total output during may and highlighted ongoing business closure across the supply chain held back the recovery thats the picture and sterling trading there off. Dollar trading broadly stronger versus a range of industry this morning. The ftse 100 has dipped back below the flat line. The dax has come off about 35 basis points lets put all of these into con dechl. Yesterday, the stoxx 600 surged 2. 5 for the week. The stoxx 600 was up 5. 3 . Weve had a very strong run. A little profit taking ahead of the ecb meeting ahead where the investment communities expecting bold action from the central bank and Purchase Program. Lets get a check on u. S. Futures. We saw equities continue to rally but interestingly again underperforming in europe. So stronger gains on this side of the pond. Well see pull back from the u. S. As well but fairly muted moves. Another part of the market in focus. Energy agreeing to back extended output cuts by 9 million a day in one month. Thats according to multiple media reports. Opec has yet to say if the group will meet today to confirm extension amid concerns over compliance thats a look at price where well stand. Youve got brent trading light about 50 basis points. Wti trading 1. 3 lower to just about 37 a barrel lets get out to dan murphy. There has been a lot of back and forth will they, wont they . What is the latest you are hearing and what they can expect if they do meet today . N such a g story to follow. If you look at the price and heading into european and u. S. Session. No real catalyst or major headlines coming out of opec only reports and suggestions of what they might do reporting that saudi arabia and russia reached an agreement for one month. Markets took a positive sign from that and got a boost of that headline. The Sticking Point here appears to be on compliance. Weve heard saudi arabia is concerned that it is shouldering responsibility for these cuts. Inted it is pointing the finger on a lagarde producer and calling on them to do more any new deal would be contingent on those to pick up the pace of cuts and to do more. The only thing weve been looking at is the oil weve been tracking oil has had a stellar month up over 80 reporting the best monthly gain ever yes, coming off a low base the other thing to take into consideration is perhaps some of these producers are concerned about the pace of that recovery. Oil prices have come up quite significantly. There is a concern any price above 40 a barrel might produce the producers to turn the taps on again managing the priced recovery is also weighing on their inds. We have reported yesterday about the meeting that could have happened today still no clarity on that the next scheduled meeting is 9 10 whether they meet is uncertain thats the latest. No real catalyst or headlines to drive direction moving forward and a lot of uncertainty about the Producer Group is going to do next. Back to you. Thank you for that report. Lets bring in a guest to continue the conversation on this the head of oil and gas research steve also with us for the conversation thank you for being with us. How significant is this potential Production Cut looking at extending the cuts of 9. 7 Million Barrels a day what do you make of the recent reports and significance of this extension . I think it is significant that opec plus is coherence in the message that it will support the market understanding this is a complete shift. From that perspective, they understand the oil markets are looking to extend an agreement by at least some measure our understanding is that russia is opposed to any significant measure. They want to assess the situation before committing to any further cuts i think the realistic expectation will be by one month or two and will stick to the baseline agreement asking you about personalities. When i was following the opec story. They seem to be getting on very well and kept the alliance close. Now youve got his excellency. It seems his personalities have a more fractured relationship or is that a side story that is unimportant . In terms of the negotiations and coming to an agreement the decisions here are taken at a higher level than both ministers. And i believe that market situation is dictating that two sides come to the agreement and do whatever it takes those two are the banks of oil oil prices cannot be supported as a result. For the compliance of all the members is important russia is supportive of that given the data showing approximately 97 of compliance before doing any previous agreement. Right now because of the market situation seen eye to eye. One old question we keep having to ask is the relevance of opec and the significant was that the relationship of russia and saudi had overtaken the cohesion itself. Come at the expense ofopec opec was given up and causing them to be relevant with other big producers like russia into the fault to produce the relevance was successful that would be increasing especially relying on cap x including the shale. Do you think this could encourage u. S. Shale to open the taps again it will encourage them to open production. Remember. They need to keep production the dramatic sharping they will see could be reversed but that doesnt mean that is going to continue we could have zig zag with the return longer term decline, we expect that to produce about are 45 billion per barrel it will make hedging difficult for u. S. Shale producers thank you for being with us today. Head of oil and gas Research Bank of america global research. China has announced it will permit more Foreign Airlines the move comes after banning Passenger Carriers from coming into the county. The u. S. Is reportedly set to label four more Chinese Media outlets as chinese embassies moving the two largest stateowned networks on the move to the operations. The Trump Administration placed five other Chinese Media groups saying they were being used by beijing to spread propaganda coming up on the show, defying his boss the pentagon cefhi breaks on the issue. More after the break across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back u. S. Defense secretary has spoken out at President Trumps plan to use the military he told reporters hes against invoking the act the law that would allow President Trump to use u. S. Troops to quell the unrest triggered by the death of george floyd. Former u. S. Defense secretary mattas also issued a scathing statement on his former boss you can check that out on cnbc. Com large scale protests against Racial Injustice continue with most remaining peaceful. Meanwhile, all four officers linked to the death of george floyd have now been charged. Jay gray joins us live from minnesota. Some Significant Developments around the protests in the last 24 hours or so the new charges against derek and the other three officers present at the death of george floyd. Tell us how protesters have reacted to these developments. Good to talk to you this morning. It is news they were waiting for. They were pleased with the charges against the three other officers and the upgraded charges. They say the fight is not over it wont be over until there is a change in the way policing is done across the country. That is one of the things part of a Memorial Center University Center behind us is where they will gather across the street is a park where thousands will gather to watch on video screens this all comes hours after those new charges were announced a lot of people bolstered by that but understanding they still have work to do. They will continue to protest until they see that change but pausing here at least today for this memorial which should be a very emotional time thank you for keeping us updated. Amazon has announced it will reopen two warehouses in the midwest. Facilities in chicago and indiana were temporarily closed amid the unrest and will be back opened by today. Bank of america will commit 1 billion to combat racial and economic inequality by insisting people of color have experienced greater impact by covid19 the Company Hopes to contribute to social progress and help solve underlying issues. He added the Business Community must redouble efforts in this regard caller you are seeing two things come together one is the longheld issue of Economic Activity. Other side, you see Health Care Prices affect those communities more adverse way than the broader society. We thought it was time to put up the money and we are doubling our efforts to drive success in this area. The latest adp survey shows 2. 7 million jobs a large number of states began easing restrictions on the month. Analysts has declared the covid19 recession over barring a second wave of infections. Warner music group completed 1. 9 billion ipo on the high note with shares popping well above the 25 listing price as it debuted on the nasdaq warner listing the first debut in the u. S. Since the beginning of the pandemic the music label hosts artists such as lizzo, ed sheran and bruno mars the Video Conferencing app zoom raised 945 million. Priced at 21 per share above targeted price range lets look at futures. A bit of red on the board. Following similar of what we have seen in europe. Underperforming european markets. S p 500 posted the longest winning streak since february as of yesterday despite protests taking place across america it continued yesterday and value. It will be interesting to see when wall street opens whether they see a little profit on that trade, which is what we are seeing in europe today on that note, lets take a look at auto stocks here in europe. A few factors driving down those shares the top down trade into the more valuable sick call market as investors look towards the reopening. Now questioning whether that reopening trade is priced into the markets. The german stimulus package also potentially driving auto trade it has come under criticism given that it has failed to incentivize purchase of conventional cars. The package from the government, this 130 billion stimulus package providing incentives for the vehicle purchases. Nothing towards the Traditional Cars daimler on the back of the news of trade we are seeing out of that market. Lets take a look at the broader markets. It is ecb day. We are eyeing the meeting set to take place later on. The big question is whether Christine Lagarde will deliver on expanding Asset Program we have energy in focus. Let me bring you fresh comments on opec plus according to the sources. The meeting is still possible this week if iraq and other noncomplying countries pledge to improve compliance the opec plus meeting is still possible this week saudi aramco to delay initial crude prices sunday pending the opec plus meeting. There has been a lot of will they, wont they awaiting any real confirmation as to before as to whether it will go ahead the plan is to extend the current cuts about i a month huge issues around compliance from their perspective as steve pointed out, personality no doubt is playing a role in opec plus. That is certainly complicating things there that is it for street signs. You can catch me and annette later on for ecb decision Time Beginning at 13 40 cet thats it for me, Julianna Tatelbaum. Worldwide exchange is up next. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. It is 5 00 here is your top five at 5. The history of the new american stock market and dissention in dc. Relief for small business. Congress updated terms on the massive program. Pentup demand, duelling ipos te
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