President trump warns of hard times ahead, as u. S. Health ,000cials estimate 240 americans could die. Global stocks fall. The worst is yet to come. Warns that investors asset prices have further to fall. Jeff good luck says expect the panic of march. A debt binge. Companies raise a record 752 billion last quarter. They look to build up cash buffers. The Carnival Cruise airbus cash in on credit rebounds. Lets take a look, first off, at futures, down across the board, as i said, after big losses in asia overnight. U. S. Stocks also closed lower at the end of the day. Europe was up. We have catchup to do in terms 3. 5 e drop, now down about on european futures. U. S. Equity indexes also trading lower, but not as severely. What do you see on the gmm . Anna yes, so we see a negative session for the asian markets. Asian equity markets under pressure, the japanese nikkei down, south korean market, hong kong all looking weaker. Bears back in control at the start of the Second Quarter. It is april 1. Be careful of that date, of course. U. S. Data then, that is very much in focus. The trajectory for infections in the United States and the tragic death toll in the u. S. Very much in focus for those tracking the global outbreak and therefore the global recovery. President trump outlining the painful two weeks that lie ahead. The last quarter saw the worst global Stock Performance since the financial crisis at the end of 2008. We have had some better data overnight once again coming from china. If youre looking for the upside, the china manufacturing rebounding. That was after the broader measure also being on tuesday. There is some positive narrative coming from china but it is muted by the global negativity and the warnings we have had coming from the likes of investors. Here are todays top stories. Officials in the u. K. Now accepted the country has not done enough to test for coronavirus. The prime ministers team blaming a shortage of chemical components and experts struggle to agree on what to do next. The u. S. Health Department Says the first ventilators will be delivered to the nhs. In italy, the number of new coronavirus cases hit a two week low. The nation has reached a plateau. It is a sign the outbreak in europes at the center may finally be coming under control. Spain suffered its deadliest today yet. A Record Number of france u. K. In france and the u. K. Banks have agreed to scrap dividends and buybacks this year. The u. K. Regulator wrote to the lenders asking them to cancel the payments, adding that it expects banks not to pay any cash bonuses to senior staff. Hsbc and Standard Chartered are falling in hong kong trading. Stocks have further to fall below their march lows, according to jeffrey gundlach. He says the s p 500 will not match recent highs for a long time and the projections of a quick recovery are too optimistic. He predicts panicky feelings will return to markets in april. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt . Matt all right. Donald trump is, as we have been talking about, warning of a tough two weeks ahead. His warning comes after u. S. Health officials estimated 240,0 00 americans could die in total in the epidemic. A less optimistic president addressed the nation as he appeared rattled by the scope of death and suffering the governments scientists foresee. President trump they are very sobering. When you see 100,000 people at a minimum number. Out,ed out ride it dont do anything and think of it as the flu but it is not the flu. Is vicious. Matt for more, Annmarie Hordern joins us on the phone from new york. Decidedlyent is pessimistic about the future now. Thats right. Over the past few weeks, his critics have really called him out for being too casual in his approach. Last night, watching this press conference, he clearly appeared rattled by the scope of the pandemic and his tone was quite dark. Just for some of the figures, birx reiterated that as many as 200,000 americans are projected to die. At one point during this briefing, a slight appeared that showed as many as 240,000 deaths. Thats how high it could reach in america. I am sitting in manhattan. The death toll yesterday here topped 1000. New york is definitely the epicenter of this pandemic. The state infections have exceeded those reported in chinas hubei province, where the virus began. It is becoming a real and devastating picture in new york. Take the picture of daily life for us in new york. I am sitting in london, where we are also under a number of restrictions. How restricted his life and manhattan is life in manhattan . Very restricted. One day, i was literally in the middle of the street on 1st avenue running. That would have never happened. I grew up in new york. I am used to the hustle and bustle and it is not there. I have a lot of friends and family working in the Healthcare Industry on the front lines, doctors, nurses, etc. We are seeing a lot of hospitals in the new york tristate area turning their lobbies into actual patient pods to deal with overcapacity they are expecting in the next two weeks. Weeks, ifthe next two you look at my twitter feed, you can see hospital tents being put up in central park. It is getting quite bleak for them. Many of them are saying, they are worried about not having the right protective gear. An of my family members is oncologist. He will likely have to work on Covid Patients the next two weeks. Another works and pediatric care in pediatric care. She is just learning to work a ventilator now because she is going to have to switch to work on coronavirus patients. Not a Single Person in new york isnt impacted by this. Everybody knows somebody infected. I have two members of my own family infected in new york. The situation is getting quite stressing for a lot of people here. Anna thank you very much. Annmarie hordern in new york with the latest. Next on bloomberg tv, money goes back to bonds, treasuries gain as money flows away from stock markets. The commerzbank head of fixedrate strategies next. This is bloomberg. To bloombergback markets european open. We are currently less than 50 minutes away from the start of cash trading across europe and in the u. K. Lets get the bloomberg first word news now to give you the days top stories. Xerox is dropping its hostile takeover bid for hp, citing uncertainty from the coronavirus pandemic. It marks a blow to the photocopier companys efforts to stimulate future growth. Xerox says it may revisit the deal in the future, as it believes the underlying logic still remains sound. Airlines will burn through as much as 61 billion in the Second Quarter, according to the Warning Group iata, that carriers could run out of cash. Revenue is set to crater by 68 during the period. Iata urging governments to relax rules. Head fondarns plummeted 12 in march, as plummetedkets fund 12 in march. The slide comes out a challenging time for einhorn after a 20 loss in 2015 and 34 slump three years later. That is your Bloomberg Business flash. Anna the u. S. President is warning about a painful two weeks ahead. It filtered through two markets. Investors have warned that the worst for risk assets is yet to come. As a stocks and futures a slide, traders have found a renewed appetite for treasuries across the curve. Joining us now is christoph rieger, head of fixedrate strategy at commerzbank. If we look at the role played by sovereign bonds, are we back to sovereign bonds as a haven . Do you have confidence in sovereign bonds given the amount of buying we will be seen by governments into the future . Though it yes, depends on which government bonds you are talking about. Japan, in the u. S. , Central Banks can be counted on no backstop their sovereigns i any amounts. The euro is, of course, a different set up the euro zone, of course, is a different set up. Italys debt ratio is likely to 0 of gdp so this triggers the risk of downgrades, even though the ecb is obviously now supporting italy to a large extent. It is questionable whether after this crisis, there wont be a rude awakening. Matt do you expect germany to aboutface, to do an in terms of its stance on tiered debt . What is now being called corona bonds seem popular outside of but merkel has resisted. There is a clear effort to persuade the german public at large. Stance iserkels still towards using the existing esm2. I think it will require probably a lot more tensions before we could see movements in this regard. 10 year btp italian you levels around 150, i dont think you will see german, as well as a number of other states, embrace. He idea of that common issuance that common issuance. Matt a lot of people outside of germany dont understand the problem with shared european debt. Merkels party, the larger party in the ruling coalition, has gained a lot of popularity in the last month because of her handling of this virus. The concern is that if germany backs shared european debt, then the far right wing party, the afd, will gain a lot more power in this country. Do you share that concern as well . Christoph i think that is one concern, although i think it is more remote. Againstopposition common issuance is more broadbased right now still in the population. Solidarity is definitely there. However, when it comes to yeah, basically supporting italy with its debt loads via there istion, i think a lot of convincing to be done. Anna i was looking at a chart spike in thedid middle of march. They came back down in great part thanks to what the ecb has done. While that is positive for anybody who does not want to see tension in the markets, it might not help to persuade people that corona bonds are necessary if this is what the ecb can do to control those spreads. Christoph yes, clearly. The ecb is again doing a lot of the heavy lifting. The program that started last thursday certainly helped to bring in spreads on that date. Much theyk at how have spent over the last couple of days, over 15 billion in the overall program. This compares with with the end of the year, which would be a fraction of this. It is a lot of money. At the end of the week, so by friday, spreads go wider and they kept widening again on monday. Given these political concerns that we have discussed before, probably they need to do a lot more still to support not just the new debt that will be issued in italy, but also existing investors who rather want to reduce the exposures given the unresolved political issues. Matt thanks very much for joining us. We will keep you with us for a little longer. We still want to talk about corporate critics with christoph rieger, head of fixedrate strategy at commerzbank. In7 year on year jump fourthquarter revenue was reported by , beating expectations thanks to robust growth in Internet Services and overseas business. We heard from the companys president a little earlier. Xiaomi stores were closed. Significant traffic back to february, late january. Our advantageto with online channels and we have smartphone shipments rebounded quickly in march of 2020, showing the resilience of smartphone demand. We opened many stores. Right now, 2000 stores we opened in china. So we see a recovery. , the now, the market Smartphone Market specifically, is about may be 80 90 back to normal of january demand. This is what we are seeing. Our manufacturing capacity also has recovered close to 90 already. Hearing about the increase that you have also seen in some of the Internet Services business, how much of a boost was that to you, given the shutdown really of the economy during the coronavirus pandemic . Yes, Internet Services, actually, user traffic of our content driven services, for example, the video and online games, recorded solid growth as people stayathome. Our otherntime, business could potentially be impacted. Yes, we have some increases. Grow thei think we international business. That was the xiaomi president. For cash. A dash Companies Race to build up cash buffers. Are investors losing their inhibitions . We will discuss next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Right now, we are 37 minutes away from the start of cash trading. You can see equity Index Futures are pointing down. Companies are rushing to build cash buffers, as the coronavirus darkens business outlooks. Firms around the world sold a record 752 billion of bonds in the last quarter, as they prepare for more disruption and a certain recession. Are credit markets losing their inhibitions . Christoph rieger, head of fixedrate strategy at commerzbank, is still with us. I noticed that you have to offer much higher yields than you typically would. I think there is a Carnival Cruise issue, 6 billion issue, or 13 right now even though it is not junk officially. Is that a trend across industry . Christoph yes, it will be very interesting to see how the carnival will go today. We have seen almost record amount of issuance the last couple of weeks. It is bringing back to life primary markets. Most of that has been in the safer, more defensive names. What we are observing come of these, is a divergence in market between those names and crossovers or are clearly at risk of becoming fallen angels. They are, of course, you dont have any central bank support to back them up. This could cause huge problems for asset managers, as we see this migration of ig names into highyields, which seems to be inevitable for a lot of sectors. Anna certainly in that sector, in the travel and leisure sector, it is easy to see why. Is there a difficulty for corporate debt investors trying to work out which companies are going to get support from governments, whether that is in the u. S. Or parts of europe . If governments are going to stand in some kind of judgment about which companies survive and those that fail here, this is going to make navigating the waters ahead difficult. Christoph yes, clearly. You need to keep a close eye on the politics involved and how the rescue programs are being constructed. When it comes to the national champions, say in the fairlane industry, one can be fairly safe Airline Industry, one can be fairly safe that they will be supported. It will certainly be quite bumpy. Some firms that have some debt outstanding, investors need to be extremely cautious. We will probably see more divergence with investors in those instruments basically having to contribute. Once it is clear we see nationalization, or at least a state aid support of some firms, then clearly seniors should start to perform. Anna we will have governments playing a role, restructuring playing a role perhaps. The Airline Industry is likely to restructure after the crisis, Something Else to be aware of for corporate debt investors. Christoph rieger, thank you very much for joining us. ,ive banks, u. K. Banks including hsbc, have scrapped dividends and buybacks. More on how the coronavirus pandemic has upended the businesses. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 30 minutes away from the start of cash trading across the continent and in the u. K. Right now, we are looking at futures that are down more than 3 across European Equity indexes. In the u. K. , banks have agreed to scrapped dividends and buybacks this year. The move follows similar announcements by european peers. The u. K. Regulator wrote to the lenders asking them to cancel the payments, adding that it expects banks not to pay any cash bonuses to senior staff. Pressure is now growing on banks from regulators in the u. K. And europe to reassess their bonus payments in general. Maria tadeo joins us for more on this story. What are regulators saying about payouts . That Central Banks and governments have put a lot of money towards, and a lot of liquidity. They want to weather this storm and have these Companies Deal with the Coronavirus Crisis. The money is not there for dividends. The money is not there for bonuses and the money is not there for buybacks. Want anything that is clearly aimed at shareholder helping the and not real economy and eventually trying to kickstart the economy. The message is very clear from the Central Banks and also the regulators and governments. This money needs to serve a real purpose for the real economy. Anna we spoke to someone from the ecb yesterday, didnt we . He was saying that he expects relaxation in rules around Capital Buffers to be used. To lend more. And that was the point, not to pay out money to other stakeholders. Are we likely to see harsher impositions ahead . Be. A it could for the time being, if you look at European Central and of torse, they are sensitive not being seen as too restrictive. Language, itt the should be taken as something more than a guideline. The european Central Banks have really given everyone a lifeline. There is a lot of money out there. It sends a very clear message that they want to still help. Money is not here. Here to makereally [indiscernible] matt give us an update on the coronavirus situation in europe. There is a lot of optimism building that the italian situation has at least plateaud, if not improved. Maria yes, so you look at the numbers and the new daily cases, this is what everyone is looking at now. The number that people Pay Attention to now is the daily new cases. Those are really on a declining trend now. It is not a oneoff. We have had multiple days. Weekss only now, four after the lockdown measures began in the country, that you do see them pay off. When you look at the situation we are seeing, we are still not there yet. People who died, the number of people who were needing intensive care and new cases also went up in spain. While italy is probably moving closer to that peak, in spain, a country also very badly hit, we are not there. There is still a lack of grobably about 10 days la of probably about 10 days. Anna thank you very much. Lets get a bloomberg first word news update for you. President donald trump is warning of pain ahead, as a u. S. Faces a very tough two weeks. Public Health Officials have revealed an estimate that as many as 240,000 americans could die from coronavirus. Fatalities in new york topping 1000. State now morerk than the hubei province. President trump set to announce the deferral of some tariff payments. The executive order could come as soon this week and would apply to tariffs the white house in onhat resulted chinese goods. In italy, the number of new coronavirus cases has leveled off, hitting a two week low. The nation has reached the plateau. It is a sign the outbreak in europe is finally coming under control. Spain suffered its deadliest day yet, as well as a Record Number of deaths in france and the u. K. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt . Matt coming up, flooding the market. The world is drowning in a surplus of crude oil and it is set to get worse, as current cuts more on thatend. Cuts end. More on that. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Right now, about 22 minutes away from the start of cash trading. Is predicting airlines will burn through as much as 61 billion worldwide in the Second Quarter. That threatens the very survival of airlines in what is expected to be the roughest stretch of the crisis. General told bloomberg the Industry Needs more support now. We estimate that the airlines will run out of cash in the in two or three months. Threens that in two to months, if nothing is done, we could see bankruptcies for half of our airlines. The point is that the governments have reacted very strongly. They have put together very significant financial stimulus packages. If the money is on the table and we urge government to put the money on the table and to inject it in the Balance Sheet of the thisnes, we could overcome riod. Very difficult peior are you suggesting the government are putting out final words at the moment but the actions are not backing them up . Do we need to see the money coming through more quickly . First of all, we are very grateful of government. They have done a very good job in putting together this significant, very significant packages. Now that the announcements are made that the efforts have been money. E urgently need figure aboutsh a u. S. Cashllion of burns in the Second Quarter, it means we desperately need cash and urgently. We say to government, please, now, implement the promising, fantastic policies you have announced. This isin terms of how going to work its way through the system, we clearly have an urgent need for cash now in the aviation sector in the United States, in europe, and globally. There is a danger and worstcase scenario that what we see happening is that we see the current actions being taken by government to contain the virus working, we then see a return to normal life, but we then see a return of the virus later on, potentially this year. At that point, the airlines will have had their aid. They would have gone back to kind of normal working conditions and then we get hit again. What is the longterm plan here if we do see a return of this virus, if we do see problems sort of reasserting themselves later this year . How much patience do you think governments are going to have . Is this a oneshot further carriers to put themselves back into a stable position and if they dont, is there a danger we see it returning later this year . You know, i think it is not a matter of patients, it is a it is af patientce, matter of being able to overcome a crisis in one way. We hope it lasts only for a few months and thats all. If we get a second wave, nobody can be held responsible for that. We hope governments will come additional packages or cash injections. We cannot, you know, say that anyone is responsible for that. We have to fight again this coronavirus. We have to overcome, you know, the different ways, if there are several. If there is a second again, we will ask for help. We think that governments will understand that. It is not the fault of anybody. Anna that was the iatas director general speaking to guy johnson. The u. S. Plans to meet with russia and saudi arabia to staunch a historic plunge in oil prices. The commodity had its worst quarter ever as virus restrictions, eroding demand, the marketg war of share between saudi arabia and russia have all battered prices. Opec plus members are now free to pump oil at will, as the output cuts deal ends. We spoke to a number of industry executives and Central Bank Officials on the state of the oil market. From the coronavirus, we were going to be globally oversupplied on energy to begin with. Dispute andaudi desire to pump even more has made this oversupply even worse. Demand today, we think is down significantly. Anch will contribute to approximate 5 million barrel per day decline for the year. So you are going to see lots of restructuring, some failures, and lots of challenges in the Permian Basin. We think the Permian Basin will actually shrink this year. We were guiding this year to Capital Spending in the permian over 4 billion. We have reduced that by 2 billion. Think of it coming down by half. We believe if not the pricevirus epidemic, the would go back to about 45, maybe 50 per barrel, which is quite sufficient for us. This is the billion dollar question for many of us. I think it is actually too early to say how this is going to unfold. Speaking to the saudi oil markets. Joining us now is Hans Van Cleef , Senior Energy economist at abn amro. Do you have any expectations that u. S. Cooperation with others in the oil market can do anything to stem supply . Is it needed to stem the supply . Hans i think that is very hard. We see that President Trump is speaking to Vladimir Putin in russia and Mohammed Bin Salman on and saudi arabia to see if these diplomatic talks can lead to an attempt to at least bring parties together. This will only work if also the u. S. Brings in something. Its very hard to see that this would be something in the form of lowering u. S. Production. Russia wants to see if u. S. Production will drop as well so they are not really in a hurry. Its very hard to see how the u. S. Will cope with this. Matt how much does the price war matter if there is no demand out there for the product . Reallype, you cant drive long distances without getting stopped at a border. You cant fly anywhere, obviously. All of my favorite factories are closed. So what do people need oil for right now . Hans indeed, thats the main problem. There is also not urgency to cut production now, because there is no way that they can actually balance the demand drop we see at this moment. In that respect, to come with a new Production Cut agreement between opec and nonopec members, that is probably only good timing to see if demand is starting to pick up so as soon coronavirus measurements are being unwound, and the economy starts to recover, and then the demand for oil starts to pick up , that would be the perfect time to come with this sort of agreement to also cut the production. For the moment, i think that the biggest worry is storage and the fact that we may run out of that. The prices of storage are going up. That is probably the biggest worry, especially for the u. S. , at this moment. Anna how long until we run out of storage . What happens when we do . Hans the exact timing is extremely hard to predict. There is still enough storage for the moment. What we see is that prices are going up and this also is a problem of logistics. The Storage Capacity can be on the other side of the world so it is very hard to bring oil there and that comes at a certain cost. At a certain point, i think u. S. Producers will think it is cheaper to leave oil in the ground instead of producing it at a loss and pay a lot to get it stored as well. That is where you will see the impact on u. S. Production and it is also for russian and saudi Oil Producers that at this moment in time, there is no need to increase production because prices are already this low. It would be a waste of resources to trigger a limited effect lower prices even further, while the whole sector is already feeling the slow prices at this moment. Matt what would a recovery look like to you . Hans i think a recovery would starthat the economy will to pick up as soon as these measurements are being the economy is normalized. Demand will pick up. That means there could be some sort of Production Cut agreement and that would put prices up. Andorecast 45 for brent 42 for wti. We were at 70 at the start of the year. Probably because of these high inventories, and that will not be gonvarri soon will not be gone very soon. 45 50 for this year and next year. , thanks sovan cleef much for your time this morning. I want to get to the Bloomberg Business flash and give you the top stories off of the terminal, starting with hsbc. The stock plunging in asian trading after axing its dividends. Hsbc warning of revenue and loan losses tied to the coronavirus outbreak. Standard chartered also tumbled after a joint other big u. K. Lenders in counseling 2019 dividends and buybacks and thing that would be no payments in 2020. Xerox is dropping its hostile takeover bid for hp. Xerox siding uncertainty from the coronavirus pandemic of course. It marks a blow to the photocopier companys effort to stimulate future growth. It says it may revisit the deal in the future, as it believes the underlying logic still remain sound. Fund einhorns hedge plummeted 12 in march, as equity markets took their biggest dive since the financial crisis. That leaves his Greenlight Capital with a loss of about 21. 5 year to date. The slide comes at a challenging time for einhorn because he had a 20 loss in 2015 and 34 slump just three years later. That is your Bloomberg Business flash. Anna coming up on the program, a painful two weeks. President trump warns of pain ahead in the United States as the coronavirus spreads. More on that next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Just about seven minutes to go and we are looking at futures that are down, indicating it will be a risk obsession this wednesday risk off session this wednesday. Part of that is after the warning from president donald trump. He says it will be a tough two weeks ahead. U. S. Health officials worn we deathsee 240,000 total in the United States of america. A less optimistic president addressed the nation as he appeared rattled by the scope of death and suffering the governments scientists foresee. Pres. Trump they are very sobering. When you see 100,000 people and thats at a minimum number. A lot of people have thought about it, just write it out, and think of as the flu, but its not the flu. Its vicious. Matt for more, Annmarie Hordern joins us on the phone from new york. The president is a lot more downbeat then he has been than he has been on this lockdown is expected to last through april. Exactly, it will last through to april 30. Weeks ago, President Trump was hoping america would be back to work on easter sunday. Clearly, that is not what the Health Care Professionals and medical advisors said is necessary. Now they are saying even with the social distancing measures in place, theyre projecting 240,000 deaths is what we could see in the United States. As you mentioned, President Trump really striking the stone that is quite dark. He is telling americans to brace for one of the toughest stretches as a nation we are going to see. I am seeing that already in new york. New york citys death toll yesterday topped 1000. New york states infections not exceeding those reported in a chinas hubei province, where the virus began. It is an all hands on deck situation here. Anna thank you very much. Annmarie hordern joining us in new york. Another part of the story developing stateside has been talk about a big infrastructure package. We will return to that later on during the program no doubt. Coming up, it is the market open. We are expecting to see u. S. Futures certainly pointing negative. European futures point negative as well. Ing to seeect weakness again at the start of the trading day. Could be done more than 40 on some of these Global Equity markets as investors focus on the spread of the coronavirus. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] anna here are your headlines. President trump warns hard times ahead as they estimate up to 200,000 americans could die. Global stocks fall. The worst is yet to come. Asset prices have further to fall. Dumping the dividends. Matt take a look at futures here. We are looking with 15 seconds to go drops in future equity indexes across europe. We have seen them down all morning. They are at session lows. When thesk off open markets start trading. What do you see as the live cash indexes . Look at European Equity markets opening, we are expecting considerable downside. Ftse 100 is open, the other markets are taking time. Ibex down 2. 3 . Overall we are down by 1. 2 . We are seeing a continual drip of companies dropping dividends are canceling share buybacks. Taking selfhelp measures to get through this. Continental has withdrawn their outlook. We heard from the construction sector in the u. K. , they canceled their salary increase. A number of measures taken by those who manage these Balance Sheets to shore them up to the lieh times that no doubt ahead. European equity markets reflecting that and the underlying reason, the Health Related spread of the coronavirus. We see a great deal of reflection on numbers out of the u. S. , and a death toll. The ibex down by 2. 5 . Down 2. 8 . 0 European Equity markets opening lower, lets reflect on negative thoughts from famous veteran Money Managers. Beliefs reiterating that asset prices have yet to hit the bottom. The recent rebound is not reflect how bad the potential fallout could be. The stock markets are going to relive the panic of march. Likely to fall even lower. Joining us now is chris wyllie, cio, Connor Broadley. We start our conversation on the downbeat note, warnings from Money Managers about how bad things will get before they get better. When do you see things getting any better . Do you have visibility on any of the timing of this . I apologize. It looks as if we do not have chris wyllie. Lets go back to the market story. We are waiting for the cac to open. The dax down by 3 . Continental talking about withdrawing their outlook. German corporates trying to take selfhelp measures and shore up Balance Sheets, and asking the government for assistance. Matt i want to point out there is a story out of bloomberg scoop that could help markets to some extent. Germany is mulling a backstop for credit insurers to avoid default, according to a person familiar with the matter who has declined to be identified because the decision has yet to be made tyet. Chris wyllie, cio, Connor Broadley, i believe we have you on the line. What do you make of stocks, the drop we are looking at . Is it the volatility we have to get used to, or are markets concerned the coronavirus lockdown has not been priced in . It does seem like we are having problems with chriss line. We will continue to try to get , and in thedline meantime i want to play you some of what we heard. On Company Reported a jump yeartoyear revenue that these expectations because of robust growth and overseas business. We heard from the president a little earlier. Most of the stores are closed. Short hours with low customer traffic. February in late january. However, our advantage and online channels, we have seen shipment rebounding quickly in late march, 2020, showing the resilience. We opened many stores. 2000 stores reopened in china. Nowee recovery, but right the market specifically is about normal of january demand. This is what we are seeing. Our manufacturing capacity close to 90 already. Hearing about the increase you have seen and Internet Services business, how much of a boost was that to you given the shutdown of the economy during the coronavirus pandemic . Yes, Internet Services, user example the video as online games recorded people stay at home. Our business could potentially if customers decrease their budget. We have some increases and some decreases, but overall we grow Internet Services. Anna we will get you up to date on European Equity markets, weaker this morning. Particularly stateside and in 3 on then under stoxx 600. U. S. Futures point lower. This is bloomberg. Anna welcome back to Bloomberg Markets european open. The trading day looks negative for european stocks. The Second Quarter starts in negative fashion. In italys on the ftse less than we are seeing elsewhere. Lets get to the banking sector, yesterday we were talking about in ecb, they had asked banks their jurisdiction, now we have heard from the bank of england, and banks across europe will not be able to pay dividends in the nearterm. Markets are adjusting to that. Behest being done at the of regulators, moving weaker because of lower expectations in the short term. Lets get a first word update. Xerox is dropping its hostile takeover bid for hp, citing uncertainty from the coronavirus pandemic. It marks a blow to the companys efforts to boost growth, but it may revisit the deal in the the underlying logic is sound. Airlines will burn through 6 billion in the Second Quarter according to an industry group. Revenue is set to crater. They are asking governments to relax rules. Hedge funds plummeted 12 in march. Equity markets took their biggest dive since the 2008 financial crisis. The slide comes at a challenging time. That is your Bloomberg Business flash. To chriss get back wyllie, cio, Connor Broadley, third time is a charm apparently. You, let me kick off by asking you what you think about the loss in economic. Ctivity that you expect has it been priced in already . Chris yes, i hope i am coming through loud and clear. There are two different narratives on different timelines. The first is the disease management, and that is clearly as we have seen today front and center for markets. Be a littlehere may ositivity it seems strange to say that today but , having gone italy into lockdown first, it is a clear reflection point in u. S. , that isterday beginning to look like a trend change. You would expect that to ripple through europe and eventually to the states. Concern as the markets are looking for a peak weeks seemsin two premature. That could affect expectations. You could see the potential for some relief despite horrible numbers coming through, and deaths will continue to rise. Markets will try to look ahead. From that perspective, if you ,re looking for a relief rally that could be it. The other timeline i mentioned is economic one, that has a slower burn. That,are concerns around looking at downgrades that have come through so far. This will dissipate quickly. At best a protracted process for markets. I was looking at moodys comments about the 1990s swoosh shape to the economic picture you painted. Away from the actual infection story, but the economic recovery, there will be a substantial lack and getting a sense how long it will take to recover is important, and it depends on the control measures on society and how quickly people want to go back to service the economies. For the u. S. And europe that will be a different experience from the chinese model. Chris absolutely. Vs,used to talking about ws, but we have a swoosh. The first question, and from lockdown time frames and measures that have to be kept in is thatour best guess official distancing measures stay in place for a while. We need Antibody Testing to get a better handle on that. It will be a gradual wind down. The other is the impact on behavior and corporate , and the domino effect of that. What is different this time around is everything has come up front. We have moves in markets to counter the recession which normally takes 12 to 18 months, and you are seeing it in three weeks. Policy response is trying to lead. We will have an Unstoppable Force meeting an immovable object. The economy is an immovable object, it has ground to a complete halt. The Unstoppable Forces liquidity which is at scale as well as the fiscal beats which are coming, 9 gdp. Nobody really knows how those two forces will resolve themselves in the next few quarters. In the darkest hours, people tend to i would not underestimate the difficulties we will have restarting the economy, the insolvency risk around that. Equally it is dangerous to underestimate the power of the policies being applied. Three tonsumer in six months in time get better news on the virus receding starts responding and savings consumer again, the might even have a little celebration. If that comes at the same times policy kicks in, there could be a big recovery. That is probably a story for the Fourth Quarter rather than the third. Matt what be a make of the policy response we have seen so far, and how much more do you expect . We had 2 trillion from the u. S. And they want to do another 2 trillion. We have the big package from germany, they have said post crisis chris hello . Hearingam sorry, we are Juliette Saly in the background, we have lines mixed. I want to ask quickly about the stimulus that we have had, do you expect we will get a similar amount . Yes, i think the stimulus will keep on coming. Broken the they have emergency glass in terms of physical response, and as long as Central Banks are there, we are getting close to Central Bank Financing now directly of government debt. I think we will see a lot more to come, frankly. Anna thank you so much, chris wyllie, cio, Connor Broadley, he stays with us on the program. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 21 minutes into the trading day. Is down by market less than the others, 1. 8 . U. S. Futures down. Lets talk about the oil markets, we have some weakness in the oil price. To meet withs russia and saudi arabia to staunch the plunge in oil prices. The commodity had its worst quarter ever. Opec members are free to pump oil at will. From the coronavirus we would be oversupplied to begin with and the russiasaudi dispute and desire to pump more makes this even worse. Down significantly, 15 million to 20 Million Barrels a day over the next few weeks. That will contribute to an approximate 5 million per barrel a day decline per year. You will see lots of restructuring, some failures and lots of challenges in the Permian Basin, and we think the permian will shrink this year. We were guiding this year to spending on the permian over 4 billion. We have reduced that by half. We believe it is not the coronavirus epidemic, the price could go back to 45 to 50 a barrel. This is the billion dollar question for many of us. Say how itarly to will unfold. Some of the voices talking about the oil markets. Chris wyllie, cio, Connor Broadley is still with us. As we see the opec deal collapse, and that the u. S. Will cooperate with other producers to control supply, and demand is not coming back in a hurry, are the reasons to see a Higher Oil Price from here . Chris it is really hard to see, isnt it . We will be reaching the history books in terms of a historic lows. It is hard to see with oil price finds the floor. Even if we could find an agreement in terms of production and some consensus there, it is an impossible task. You are losing 20 million a hundredday out of million. You simply cannot address that through Production Cuts. That is why we are in this spiral now and talk about negative oil prices, i am not sure how that works. It is hard to see where the floor is unless there is an extraordinary rediscovery of consensus among the producers, and the unprecedented cuts in production. They will have to tough it out. It is impacting inflation expectations. Continue and therefore bond yields are likely to fall because of that. It is a great point. The question about inflation or deflation later, i will say all this money printing to use a populist term for what we are seeing, do you expect us or areny inflation we going to see no demand pickup. Oil prices so low that that never comes. Chris it is a bit of a challenge for the Federal Reserve with qe. They want to apply qe to raise inflation. Arethe Energy Markets moving in the opposite direction. I really cannot see inflation at the moment unless we get something radical. Matt it is difficult to see. I appreciate you sticking with us through these difficult times, pleasure having you. Anna welcome back to Bloomberg Markets european open. Challengingnto a trading day, markets down by 3. 4 . Measures are being taken to stem the coronavirus, and fears about what lies ahead. Picture we have for European Equity session so far, it has been deteriorating. U. S. Futures down by 3. 5 . Lets look at the individual movers. Only 17 stocks to the upside. A of conviction to the downside. In terms of the upside, there are stocks on the rise. To the downside, it is more illustrative of what is going on. Banking names under pressure, unable to pay dividends in the shortterm. We have got exdividends, carnival down another 10 . That is a cruise ship operator. A few other companies in focus, continental which has given munich re not able to offer estimates where they had in the shortterm. Mentioned inat i regards to the banking sector, and an inability to pay dividends because they have been told not to buy the bank of england. Matt lets get the bloomberg first word news. I will give you todays top stories, President Trump is warning of pain as the u. S. Faces a tough two weeks. Public Health Officials revealed an estimate of his many is 240,000 americans could die from coronavirus over the course of the pandemic. Fatalities in new york talked 1000 topped 1000 so far. Inhas overtaken the numbers chinas hubei province. President trump has called for to trillion dollars in infrastructure spending, he wants investment in the roads, bridges, tunnels. He is seizing on record low Interest Rates to cheaply finance the plan. He says none of the money should go toward the Green Initiative the democrats are calling for. Top officials in the United Kingdom now except that the country has not done enough to stop the coronavirus. A shortage of chemical components, and experts are struggling to agree on what to do next. The u. K. Health Department Says the first new ventilators will at thevered to the nhs weekend. And italy, the number of new coronavirus cases have leveled off, hitting a two week low. The nation has reached a plateau, a sign that they may finally be coming under control. Spain suffered its deadliest day yet, as well as a Record Number of deaths in france and great britain. 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. Anna the coronavirus has guaranteed to throw the world into recession. The base case for forecasters is a recovery, even a vigorous one gets underway in the second half of 2020. As the pandemic spread through europe and the americas, the wide range of knock on effects comes clearer interview. Much will depend on how fast businesses bring back jobs. Shedllion positions may be due to the pandemic. Goldman sachs strategist say the cost estimated this week that the Coronavirus Crisis has caused companies to pull 190 billion of buybacks in the past weeks. Finance is thorsten beck, professor of banking and finance, cass business school. Very good to speak to you. I suppose focusing on buybacks and dividends might seem trivial given the scale of a human disaster the globe is facing now. In terms of thinking of what kinds of rules of finance we have in place as we get through this crisis, do you see this crisis changing the way we do business and the rules of finance . All, i agreest of with you this recovery will not be a quick one. Shaped thatbe v we hoped for. It will be slow for several reasons. It is still a high degree of uncertainty of how long this will take, whether this will be the only wave or if like the spanish influenza there will be further waves. And companies to hold back on ,nvestment to keep holding cash something we have observed over the last couple of weeks. What we can say is there will be changes in the economic structure with some sectors gaining and having gained already. Everything has to do with digital and virtual, and other tourism are definitely losing out and receding more than other sectors. Matt i want to say i also , we have thatics in common. While i was there, we learned a lot about the damage done after world war i, the weimar republic, the hyper inflation and how that caused more disaster than the second world war. Are you concerned about seriously damaging effects from this economic sudden stop, it is the likes of which i doubt the world is ever seen including in the first two world wars. Thorsten there will be damage, but governments and Central Banks have reacted forcefully. Quite well, i have to say. Healthh in the public area, but in the fiscal and monetary policy. A widespread safety net in many European Countries available, thethat will help reduce social economic and political fallout. Having said this, the one big question mark we are discussing in the eurozone is debt with some countries who are already indebted and may have gone through a crisis or some restructuring, and might again reach its limit. That is an area where European Solidarity is asked for. Some kind of solidarity across the eurozone with the currency and its limits and policy space is needed in order to avoid heavier social political fallout. Anna how long will it take for individual governments to approve a corona bond . Is there merit to exploring existing infrastructure to pull risks in the eurozone . This is why people talk about and use that as a credit line for countries in trouble rather than embarking on something new that could get locked down in politics . There will beree technical and legal issues to be sold. Has shownsion flexibility when it comes to coming up with new structures on short notice if needed. Having said this, i agree it is existing credit lines would add to the sovereign debt, and that is the big issue. In instabilitylt further down the road. And the problem is even though you can say it is not an issue now, there are heavier things to do, the market has anticipated that. To have the exact structures, sending the signal that the eurozone and the European Union stands ready to , not justs members the ecb on the fiscal side, that is the critical signal we need now. Matt a great signal for europe, but difficult for merkel to send in this environment. If merkel backs get in europe, gain a the far right huge amount of power . Thorsten yes, that is a big concern. A political case for some corona bonds, because you do not want to go further down the road were people feel abandoned by the european object and turn to extremist parties on the right which could end the European Union and the peace project. Matt interesting conundrum. Thorsten beck, professor of banking and finance, cass business school, good talking to you. Power,up, consolidating some leaders are using the coronavirus to take advantage and take sole command of their countries, including this man. More on that next, this is bloomberg. It is very sobering, 100,000 people, a minimum number. Write it out and think of it as the flu. But it is not the flu. It is vicious. Hopefully as experts are predicting, we will start seeing real light at the end of the tunnel, but this will be a very painful two weeks. With the increase in new cases begins to level off, the secondary effect is less hospitalization. The next effect is less intensive care. The next effect is less death. The deaths and intensive care and hospitalization always lag behind the early indication that there are less new cases today. The way we saw in italy and were likely seeing inklings of this right now in new york. We have to brace ourselves. The next several days to a week, we will continue to see things go up. We cannot be discouraged because mitigation is actually working. Anna things get worse before they get better, that was onsident trump and dr. Fauci the coronavirus pandemic stateside. That was last night warning of more pain to come. European equity markets on the back foot globally. The ftse down by more than 4 . The cac down by more than 4 . U. S. Futures point to the downside. We are getting breaking news from italy. We have had pmi numbers this morning. Italy march manufacturing falling. Not that far from the estimate. Is an economy in contraction. It did not fall as far as the chinese number did during the peak of their coronavirus fighting period. We will keep nine on the manufacturing. On theill keep an eye manufacturing. Matt for some world leaders, the coronavirus is providing an opportunity to consolidate power. Viktor orban invoked a law to take sole command of that country. Poland is pushing for a president ial election despite the lockdown preventing campaigning. This is these issues can lead to dictatorships. , pandemics are like wars one of the autocrats, dictators secretly like them because they are excuses. To be patriotic and rally around the flag and save lives. ,f anybody nuances an argument you are accused of being irresponsible. This is a great time to put into place decrees and things that limit our liberties. Society andg on the how much attention the voters pay, maybe they outlast the pandemic. Anna what do you think will be the response from the rest of europe to what we have seen specifically in hungary . What should we brace for . The Luxembourg Foreign minister is saying he should be thrown out of the eu meeting. Will this risk fracture in the eu . The eu is already fractured. What should we expect, we should expect it to be critical, because it always is in these cases. The foreign minister of brave, but for a small country the fallout is not that big. The president of the European Commission was much more measured. She said europeans should stay democratic, but did not mention any country by name like hungary. On top of that, to censure and under the euies treaties, you would need a unanimous vote, and poland and hungary and other Eastern Countries have each others back. There is nothing that is going to happen. Matt why do you think donald this has not embraced crisis earlier . Some would call him an authoritarian leader. Is it because he is probusiness that he was worried about shutting down the economy . He could have taken advantage of a push for stimulus to get the spending package through on highways, bridges, that he has been pushing for since the election. Trump is interesting, not like the other leaders i mentioned. He is not the clearcut one ofonal authoritarian the dictator. I think he has that in him. It has been more chaos, more reality tv star, that side of the character. Netanyahu, the guy in the philippines, the guy in brazil would like to play dictator. In cambodia, these are the guys who want total power. Trump has not so far done anything to signal he wants to reach out and get rid of liberties permanently. I think he is drifting, worse, he is clueless. Anna he certainly has changed his thinking on when the u. S. Economy for joiningry much us from berlin. Up next, how much will global stocks improved in the Second Quarter . Next. Ne aquino joins us this is bloomberg. Anna welcome back to Bloomberg Markets european open. A negative session underway for European Equity markets. Down shy of 3 . U. S. Futures point downward. We are building up a picture of the toll the virus is taking on manufacturing in the eurozone. We have march manufacturing numbers. Is not a million miles away from where we expected it to be. Course, contraction of but not as weak as numbers we saw out of china. Than wedown was quicker have seen in europe. This is what we see for the manufacturing data and manufacturing sentiment for france. Joining us now, Kristine Aquino. Interesting to see this picture of manufacturing weakness for the eurozone. The french march manufacturing showing contraction, but we expected to see that. Absolutely, and i think what investors will be looking out for, whether this continues over the next couple of months. They are aware the survey was conducted prior to the height of the lockdown and does not fully capture the full impact of the lockdowns yet. The key would be what will the next few months look like, and whether it deepens from here. Matt what are we expecting as . Ar as earnings Going Forward there was a great story saying stocks is still valuing at 17 times earnings, and that equates to a 4 drop. Is not a lot of clarity on the earnings front right now. My colleagues are skeptical of any measure to value stocks at the moment, because earnings are pictured to be an incredible black hole at the moment. We are seeing evidence of companies barely having any idea of the extent of the virus fallout. Multiple companies are refraining from giving any outlook. That speaks to the extent of the uncertainty over earnings that the fallout poses to companies, and the investors watching them. Evaluationcult, and or earnings moment, i would expect investors to take with a large grain of salt. Matt thank you so much for joining us, Kristine Aquino who runs the bloomberg mliv blog in the middle east and africa. Check it out. It is a valuable resource in a volatile market with so much changing. I want to bring you the german numbers we are getting now in terms of retail sales. We got better retail sales than anticipated, up 1. 2 . Pmi,rms of manufacturing 45. 4, another contraction. Francine President Trump of hard times ahead as u. S. Officials estimate 240,000 americans die. ,urther to fall for investors warning that asset prices could go much lower. Jeffrey gundlach says expect panic to return. British banks take another hit after scrapping evidence and buybacks