120 reports are in, but next week is the big week for earnings reports. Yearoveryear Earnings Growth is down 17. 6 right now as we stand. The s p before today was down 13. 4 this year. He did make back some of that ground lost, but we will see what comes our way next week. The 10 year yield has been in its range as well. We have crude limits high for the week, but nevertheless, up and helping to send Oil Companies higher. Down 0. 4 , but still around 17. 25 an ounce. Lets get back to what is happening with italian bond yields and european bonds more broadly. Italian bonds catching a bid today. Are tightening up in germany as well, despite the fact that we have an s p rating review this evening and eu leaders essentially failed to reach a significant conclusion regarding funding, how they are going to fund europes economic recovery, and yesterdays video call. Are we overestimating the risk when it comes to italy and btps . Lets get a sense of where we are at the european economy. Peter dixon, Global Equities economist at commerzbank, joins us now. Are you worried about what is happening with italy at the moment . The ecb seems to have italys back. We are ultimately probably going to have some help coming forward orm the euro zone or the eu the ecb. Is it something we should be concerned about . Peter yes and no. Yes in the sense that it has worried me for a long time. Economy is in a pretty bad state. Ecb does have italys back. Its provided support. I think the biggest question is not so much what happens in italy. It is what is the best thing you can do to help. That is the potential area of conflict does putting strains on alleuro zone, and it is very reminiscent of what happened a decade ago. That didnt end well. Hopefully this time around we can find a better solution. When do you think that is going to come . Angela merkel clearly believes a large stimulus packages going to be required, but those are words. As you say, weve been around this whole story before. I remember it vividly during the euro zone crisis with greece. Words are one thing. Actually getting down to nothing bolts, getting to details, that is a very different story. Close are we to settling this story in europe . Peter i think we are a long way getting a deal patched together. Countries like germany are saying we do not want to finance the package via grants. We want loans that they would have to repay. Point,s is that at some European Finance ministers will sit around the table and realize that if they continue with this hardline behavior, they are some kind of theyre going to create an even worse situation. They will have to end up with some kind of grant. Ultimately, they have to decide do we want to keep the euro zone together or not. Vonnie we had this debate once, and more or less decided that every buddy whats to stay in the euro except for britain, which obviously wasnt in the euro area, but in the european union. Arent those decisions made . Can we really get back into this morass . One of theink consequences of the corunna with is that all questions are back i thinke with one of the consequent is of the corona shock is that all of these questions are back on the table. There will be some soulsearching among political leaders as to whether they want to remain part of the euro zone. Not necessarily the eu. That has all sorts of horrendous consequences, etc. But you can imagine that unless things start to improve, unless the italians feel they are getting more support from eu partners, this debate is going to gain more traction, particularly given that the inulists are flying high italy. Vonnie how much fiscally leeway does germany actually have these days . At some point it is going to hurt germany as well if italy is on its back, if spain is on its back, and yet germany still wont acknowledge that that day is coming if it wants to stay in the euro zone. Peter theoretically, governments have an unlimited amount of firepower. Of course, the difference in the euro zone is that the likes of germany or france do not actually control the currency. That has been seated out to a supranational body. But if the finance ministers were to sit around the table and say we are going to do whatever it takes, they could probably patched together a sufficiently large package which will satisfy the italians. Unfortunately, there are costs i mentioned before. So in theory, they can do it. In practice, it will be rather difficult for them to go perhaps as far as the italians would like. But i do suspect that in the end, you will have a come for my ultimately will satisfy, but the germans will continue to grumble that the italians are being bailed out and not structuring the economy. So we will get into this neverending loop, and every shock,e economy has a these kind of discussions will recur. Crisis. Emember degrees now it is comparable to now. Some point say, at we will reach this conclusion. At some point, eu finance ministers will reach this conclusion. We dont know when that is going to be. In the meantime, the ecb is literally buying time with its programs. Is certainly front and center, and giving them quite a lot of latitude. Next week we got an ecb meeting. Do you think the ecb next week is going to up the amount of firepower available to protect the euro zone, and in what form do you think that will come . Peter i actually dont. I think next week is the point at which the ecb has got to say lets allow some time for measures to be put in place and have their effect because frankly, there was very little they can do anyway to prevent the worst of the economic crisis from happening. So what they are trying to do is ensure that economies are in a , butnable state to rebound i think this is when they can set for now, through the course of march and early april. Think ultimately, they will have to do more . Peter i think it is likely that they will, for the simple reason that it is all most a neverending pop, unless governments are able to find the. Iscal firepower whichis a comp my package if it is a comfort my package, then the ecb will couple he have to step in with , soidity providing measures the ecb is not done yet. On the a quick question u. S. Now, on the Federal Reserve. Andurveyed some economists the majority of them are not looking for the fed to be able to raise rates until 2023 or later. What do you see . Peter i think that is entirely possible. Banks canhat central pursue activist Monetary Policy i think is off the table for now. Monetary policy is all about socalled unconventional measures now, but when it comes to Interest Rates themselves, if anything, they have to the good nesscentral banks willing to increase monetary stimulus. I think it is going to be the they will stay for a long time to come. Vonnie thank you. That is peter dixon, Global Equities economist at commerzbank. Lets get a deeper dive into equity markets with abigail doolittle. Abigail we are looking at jittery trading on the day, slightly risk off. We are looking at very small declines, fluctuating. The stoxx 600 down 1 , but what really makes the picture at this point risk off, take a look at ud d elk ud and elk and lqd. Investors moving away from risk assets across the board. On the week, we are looking at the worst week for the s p 500 in about a week. Etf, downighyield for a second week in a row, the first time we have seen that in five weeks. Perhaps we are looking at some sort of Inflection Point around the nearterm rally. Maybe it will be interesting to see what next week rings. It seems like it was a long time ago, but it was this week. If we take a look at a fiveweek chart of oil, the gains over the last two or three days are not enough to overcome the huge selling pressure. The june contract down 34 on the week, despite the fact that we had two 20 up days. That is probably some of what has bled into the credit and equity comp lexus as well. Interesting, if we take a look at the s p 500 energy index on the week, off of nonethelessme but , but nonetheless up. It does seem as though some investors, Equity Investors out there are trying to bottom fish this beatendown sector. Is actually the only up sector for the s p 500 this week. Vonnie thank you for that. Coming up later this hour, intel is another company withdrawing its fullyear sales forecast, causing uncertainty citing uncertainty caused by the covid19 pandemic. We will speak with ceo bob swan. This is bloomberg. Guy from london, im guy johnson, with on a in new york. Ons is the european close bloomberg markets. Lets get the first word news update with rick with ritika gupta. Ritika the u. S. Is now the global epicenter of the outbreak. Some 870,000 people in the u. S. Have been infected. New york city has been the hardest hit. More than 16,000 have died there. Progress congress has now inroved almost 3 trillion spending since march. The latest is a 484 billion manager that adds funding to the Small Business loan program. President trump signs the measure today at noon new york time. The Federal Reserve may hold Interest Rates near zero for three or more years, according to a Bloomberg Survey of economists. The central Balance Sheet the central bank Balance Sheet storing about 10 billion. Almost all said that chairman powell has done an excellent or good job communicating the fed action. That was led by slumping demand for commercial aircraft. Motor vehicles and metals also declined. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Vonnie thank you. German Business Confidence plummeted in april as europes largest economy anticipates subdued demand because of the chromedome us because of the coronavirus pandemic. Francine lacqua talked to the ifo president. It is very hard to predict what is going to happen, but this forecast, 5 , is certainly on the optimistic side. It is very hard to make any protections at this point in time because uncertainty about the course of this pandemic is really very large. Francine but what do you think is the biggest risk for the German Economy right now . Thate risk is certainly this recovery everybody is expecting maybe a little in the Third Quarter, may not be coming, or maybe very slow. As people realize this, they will adjust their plans, and we cannot exclude that the credit will spread to the other areas of the economy, to the financial sector, so there may be knock on effects of the very strong impact of the crisis, which can make the recession a lot worse. Francine so you think the applications of the German Economy havent go into full the implications of the German Economy having to go into full lockdown will have other impacts . If Companies Open up, they face a large cost of getting things running again. If they then have to shut down again because there is a second wave, it is catastrophic for them, so that is some thing that needs to be avoided. I dont think we should take it for granted that a second wave comes, but there are other risks. We see that with this uncertainty. Companies are really cutting down their capex. Consumers are cutting down their purchases. s we consider that germany export markets are collapsing, all of this put together generates a very grim picture for this year and maybe also for the next. Francine when you look at the gross effect expected from the Government Program of 1. 2 billion euro, how difficult is it to quantify . Can you give us a sense of how you model it out . It is very difficult to model the gross effect because in the absence the gross effect the growth effect because in the absence of any help, we would see the outcome of catastrophic depression. What the government is doing with this aid package is really preventing the worst. What it cannot change is the fact that we are shutting down parts of the economy, other. Ountries are shutting down not one we want to imagine, but it is certainly the case that we are not in a situation where a Stimulus Program will have the normal effect where we can expect an increase in growth, stimulus and of economic activity. That is not what is going on. When we have lifted lockdown restrictions, we can talk about stimulating activity. The Current Program is more about survival. Francine do you see a risk that this economic crisis will spill over into a Financial One . The risk certainly there. At the moment, governments are intervening to try to provide liquidity to companies in germany and other countries. We have guaranteed loan programs where credit sums are guaranteed up to 100 , which is unusual. I think this just demonstrates that there is a huge concern that the crisis may spillover to the financial sector. That this important is preserved. There will be some kind of credit crunch, but the objective is to keep that under control. Ifo Institute President speaking to Francine Lacqua earlier today. What have we got ahead . We are talking to this man, the ceo of intel, bob swan, coming up on bloomberg. York, imve from new vonnie quinn, along with guy johnson in london. This is the european close on bloomberg markets. At t. Ge at the top of Randall Stephenson is retiring as ceo. He had been running the Telecom Giant since 2007. The current cfo replaces stephenson as ceo july 1. Stephenson will remain executive chairman until next january. More cutbacks on the way at boeing. The company is set to production of the 787 by about half. Plus, it will announce job cuts is set to slash production of the 787 by about half. Plus it will announce job cuts. Beend for jetliners has crushed by the pendant. The Small Business loan program created a bit of controversy, where hedge funds continued to work and arguably work harder given the volatile markets were allowed, because there was no reason not to, to apply for the ppp program, which gives you forgivable loans if you continue to keep on most of your staff. It looks now like they are going to be barred from getting in where perhaps other people needed more. Guy. At european look markets as we head toward the end of trading. We are down on the day. We do have some positive stories , stocks like nestle and santa fe rising today on the back of good numbers and sanofi rising today on the back of good numbers. We will have the details in just a moment. The close is next. This is bloomberg. Guy 30 seconds until the end of trading this friday in europe. European equities ending the week. Thats take a look at numbers. These are the pictures we find ourselves with. A negative day, negative week will ultimately emerge. We have had a bumpy session. And we hit highs midsession. A couple of attempts at that high failing and fading as we come in at the close. A quick look at the story over the week. Lets linger for a moment on what kind of damages being done over the last few days. I think cumulatively over the past few weeks we are bearing in european markets have gone through three back to back negative weeks. Not particularly great. A reasonably high range. Gaps worth paying attention to. In terms of todays session, lets take a quick look at what the numbers look like. We have seen some of the Oil Stocks Trading lower. That has weighed on the london market. Lvmh weighing on the paris market, down 1. 3 . We have seen lufthansa and a number of stocks weighing on the German Market more broadly. In terms of the sector breakdown, let show you what has been happening. Travel and leisure has been one of the worst performers in europe, particularly the session. We start to get the numbers over the next few sessions from the likes of lufthansa. We will talk about the European Airline space in a moment. Compass is down, lufthansa has been down, the Banking Sector has been week. Only health care in positive territory. That has been driven by a france. Today in utilities have done ok. That is the defensive story. ,estle was out with numbers those numbers look good. That has helped out more broadly. Still the food and beverage space down. Let show you other individual stocks stories were focusing on as we come towards the end of the week in europe. Atlas, Big Industrial company, coming out and say demand will drop significantly in the short term. Not seen the full impact of the virus yet, the Management Team saying earlier on. That weighed on the nordic market. That stock down 6. 3 . Lufthansa down a. 25 . It is suffering a liquidity crisis. Its numbers are out of next thursday. That will be interesting. We will talk more about that in just a moment. Vonnie in the United States we started out mixed and we are mixed once again, but very small boost for the overall indices. We made it up to 2800 and change , we are back down to 2795 and the s p 500. Longerek will be even because aside from the dire Economic Data we can expect, we also have a serious amount of earnings. We are only 125 companies in. Is down just. 1 . Each company individually getting looked at. We will be speaking with bob swan of intel in a moment. Investors not loving the report although it is hard to see what investors are reacting to. We will get bob swans taken a moment. The 10 year yield in its range. Crude at a 16 handle but we are seeing gains on the session and that is helping Oil Companies. Gold is erasing some of its gains as a little bit of Risk Appetite is coming into the session as we approach midday in the United States. Lets move to the individual 500 and seehe s p what we can thank for these moves. As you can see, we have some of the Energy Sectors and communication sectors higher. Freeport is the best performer in the s p 500. Capital one is doing well, up 3. 6 right now in the s p 500. Upouple of individual stocks more than 3 . Some of the stocks we have seen gain this week are lower. Las vegas sands is losing 5 , gap is down 5 , norwegian cruise lines down 5 . It is day by day in this market. Guy absolutely. Next week could be really interesting as you say in terms of the reports we will get. The guidance will be fascinating. I was mentioning the Airline Space a few minutes ago. Lets talk about what is happening in terms of rescuing. Irlines facing shortages there could be a snag in terms of government plans to bailout flag carriers. L says he makeup courtl says he may go to to stop selectively gifting billions of euros to select carriers. White, us now is people who wrote the story for bloomberg news. Is concerned about what happens with state aid to carriers in particular. Airlines like air france, klm, run by ben smith, facing acute crises right now. Do you think michael will have much success if he tries to push back against some of the programs that will be rolled out these airlines, at least in the short term . France has a battle in to convince the french they do butneed a just air france, they should also look at other airlines like him, but he is also pushing the European Commission who is supposed not be giving aid to one airline over the others. The program seemed to be designed to target a Favorite Airline and he is complaining about airlines that have a commercial license in france, that is air france, but not ryanair. It is the way these programs are designed and he thinks the European Commission could jump in and do something or he will go to court to try to get the approval of which would force fan would force france to change his program. This is what other countries are thinking of. It is a bit of a warning shot that other countries need to include ryanair and what they are thinking about doing. Vonnie does ryanair need aid because he does maintain they have a huge cash file, and if that is the case why is he complaining about other Airlines Getting aid . That is a good question, maybe they need a cash file because they know they will not get a and they are not a lot of the airlines that is a National Carrier or a former state airline. It is like we saw on the banking crisis, the question of moral hazard. If you know you will stand on your own, you will act overly than a company that knows will get state health. He has a good point. He is doing what youre supposed to do in a free market, which is stand on your own two feet and his point is some airlines assumed they do not have to do that. Guy what is the commissions position . If you talk to Airline Analyst there is a great deal of talk about the fact that europe needs stronger airlines that are capable of surviving hits like we are experiencing right now. Go minded to go down that road or do you think the council will have more power in dictating what happens . Germany does not have a big transport sector. It is probably pretty concerned about rescuing lufthansa. Air france needs a lot of help anyway. What is the commissions position on the future trajectory of european carriers. Aoife the European Commission says it is the servant of what governments want to do. To keep airlines afloat will cost a hell of a lot of money. The question is will you pick winners and let others go to the wall. Those are serious things to do. There is a good question about where travel is going. There is a questions about refunds, the kind of Money Airlines like lufthansa have to pay out to customers, and we are looking about where that goes and whether they have to do that. Airlines do get a lot of protection from the state in that they know they are important. We know we need our eric links. We know we need our air links. The kind of hit they are taking demand states to do something, and it is a question of what and how much and how far, the talks we are seeing are taking a long time. Lufthansa is one of the few companies that has branches across europe. It has a belgian, swiss, and austrian branch. Are those governments going to drop in with the German Government to help lufthansa, air france, klm also has a joint ownership with paris and amsterdam. These are complicated questions about acting as one company across the region or do we go back to what we used to see 40 years ago where every capital had its own Airline Flying its own flag. It does ask people to think big or think small. Vonnie it is a great test case and will be washing eagerly to see. Thanks for joining. That is bloombergs aoife white. We have the latest coronavirus headlines from andrew cuomo. He says the amount of deaths amounts to 422, that brings the total amount of depth to 60,001 hundred 52 16,000 in new york city. He did say new hospitalizations are flat. It has been around 1300. The governor says that is troubling. Flat hospitalizations, but lower debts. Nonetheless, at least 422 have died in the last 24 hours in new york state. Lets check in with bloomberg first word news. Greats ritika gupta ritika President Trump will sign the coronavirus aid package. It has money for the load andram for Small Businesses also supplies money for testing in hospitals. Lawmakers are already at arms over the nest over the next round of rescue. The European Central bank is likely to boost its response to help an economy that is in freefall. That is up to porting to a Bloomberg Survey that is according to a blue bag to a Bloomberg Survey of eponymous. A lot will depend on what european leaders are willing to spend. Smallestorted the number of new rotavirus deaths in nearly five weeks. Rose toer of fatalities more than 22,000. U. K. , retail sales fell by the most since records began. Sales fell 5. 1 last month. The coronavirus forced all but essential stores to close. The one bright spot was food and drink sales, up more than 10 . Alcohol sales soared 31 . 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. I am ritika gupta. This is bloomberg. Vonnie . Guy . Guy a quick look at where european stocks have settled. We are through the auction process. The week is done and it is a negative week for european markets. We have seen stocks down not a lot, but around 1 throughout the week. Today the ftse, the dax, and the cac 40 all down. We have a selloff in france in particular. A strong set of numbers. Nestle numbers coming out strong. We will see weakness as well. Lvmh under pressure. Oil stocks weakening as well. The ftse 100 down 1. 20 . The downingway from street briefing, the final one of the monday through friday. We will see what we get in terms of the news on ppe, which is a dominant theme at the moment. We understand the Prime Minister will be back to work on monday. We will take the briefing on the cable show at the top the hour on dab Digital Radio and the london area and around the world on all of your bloomberg devices. This is bloomberg. Vonnie live from new york, i vonnie quinn along with guy johnson in london. This is the european close on bloomberg markets. Intel has joined a slew of companies and withdrawing 2020 forecast. The Worlds LargestSemiconductor Maker reported a 23 jump in firstquarter revenue. A better than projected profit hosted demand by chips that run the laptop and servers need to epeople working from home. Stocks down 2 . Intel ceo bob swan joins us now. What is your take on what investors do not like about this report . Indicated, as you wonderful start for the year for our company. An incredibly challenging time. , operatingwth of 23 margin expanding and they are up over 16 . It is a great start to the year and much stronger than we had anticipated a few months ago. As we go into the Second Quarter , we have raised our outlook on the top line. At the same time, we guided to lower Gross Margins. I think investors are concerned by that. Our message has been the lower Gross Margins in the Second Quarter is a function of two things, both of which are good for our company. Very, we will qualify a exciting new product in the Third Quarter of this year. What that means is a lot of the expenses for that product soaked through the bottom line. , and itecond quarter comes back in the second half of the year. We continue to make Good Progress on our process yields and factories, and as a result we will ramp faster than we anticipated. ,ecause of those two reasons Gross Margins will contract in the Second Quarter. Healthy things and good indication that we continue to execute despite the incredibly challenging times. Vonnie have we seen the peak for this year in terms of working from home and bolstering demand that way because given that your q2 forecast is like, it would seem that is the way things are going. I think our outlook for q2 is solid doubledigit growth, up around 12 is what we are anticipating. That is comprised of two things. Central collection of businesses we are growing in the mid20 , so strong growth for our data centric businesses. We seeothers, in the pc, it roughly flat were up slightly in the Second Quarter. That is coming off a strong 14 growth for the pc business in the First Quarter. To grow inxpect pcs double digits by any stretch. What we are looking at of the Second Quarter is 25 growth in our data centric businesses, relatively flat pc business after a strong First Quarter growth. Morning. You talk about significant Economic Uncertainty in the release today, and you are not clear on what the second half will look like. What is it about the second half you have not figured out . Bob a few things. The first half as much stronger than we anticipated and it has been a function of strength across the board. Growth in the First Quarter was north of 15 . The presence we have in the communication sector group at 33 . Serversideor the grew 34 . As i said, pc grew 14 . Demand has been strong, stronger than we expected, primarily driven by work and study from home. Those demands placed the need for connectivity is greater than it has ever been, and the need for the essential device called pc to be always on and always connected and always with you draws higher demand than we expected. We do expect over the longterm that those trends will be very positive for the industry and for our business. What we dont know in the second half is the interplay between incremental demand for essential pc in the home, and the need to , relative toalways unemployment rates in the u. S. , which are up almost four times in the last several weeks, gdp globally that is compressed i six points in a relatively short how toe do not know interplay the demands for essential services and the things we do relative to economy that is compressed very dramatically in a relatively short time. That is what we are looking for to get more clarity as we close out the Second Quarter and going to the second half of the year. What kind of recovery do you think we will see . Before that, we should talk about what kind of a we will see. How do you see the depths of the recession looking like, what you see that looking like . How do you think we will reopen the economy . What kind of timeframe do you think that will work on . As we come through that return to work, what is going to be different . What will have changed . Are there longterm trends we can start to get our arms around . Term, our focus will stay the same. Health anduring safety of our employees first and foremost. Second, to deliver for our essential services now more than we ever have, and to work with communities to assure we are doing all weekend to work with those communities. That is what we are focused on right now. Over the long term, we think the dynamics we are confronting fort now will be stronger industry and a world that increasingly has an insatiable appetite for data, that appetite for data means more computes, more stores, the movement of data faster, which tracks demands for our essential services. The big question is in the interim. I do not have the answer about what the economy is going to look like. I just do not. If you askedw is me three weeks ago or four weeks ago, i would have been wrong. Therefore, im not going to try to speculate how global gdp and unemployment will change going into the second half. I know we will be very cautious and judicious and stay focused on the health of our employees and delivering for our customers and a somewhat cloudy outlook for the second half. A constructive outlook for the medium to longterm for the things that we do, the essential services we provide for the industry. Vonnie apple is preparing to release at least one mac with its own processor by next year. How are you going to replace any apple business and you anticipate the shift away from intel processors will continue . Apple is a very important customer of ours. Right now we are focused on delivering modems for their delivering our relatively new icebreaker products for their current generation of macbooks. That is what we are focused on. In all instances, as we go forward, our challenge is to continue to innovate and build the best microprocessors, deploy silicon, provide the best performance for devices that have intel inside. That is what we are focused on and will continue to drive that kind of innovation into the industry such that devices that have intel inside our consumers and enterprises favorite choice. Guy in order to innovate, you need the best talent. The talent comes from around the world. The president is focusing on immigration again. I am wondering whether or not that is a concern from you and whether you think that will impact your ability to bring the best people in your business . Bob we have 110,000 employees around the globe. To process as a company is trade and technology that enriches the lives of every person on earth. With that purpose and are resilient workforce, we think we will always have access to the best talent. We have an incredible workforce and we know it will only get stronger over time. Vonnie bob, thank you for joining us. That is intel ceo bob swan. Coming up, it is balance of power with david westin on Bloomberg Television and radio. He will be speaking with nfl commissioner Roger Goodell on the nfl and how coronavirus is impacting the upcoming season. You did not want to miss that conversation, particularly if youve been looking forward to the various drafts this year. U. S. Markets are mixed once again. The dow is down more than. 1 . The s p 500 up less than. 1 . Intel itself, more to,. It is down more than 2. 2 , a leg lower after that interview. This is bloomberg. David from new york to our tv and radio audiences worldwide, this is balance of power where the world of politics meets the world of business. Well start with a check on the markets. Equities not deciding where they want to end up. We turned abigail doolittle. You said they are jittery. Abigail that is a good way to put it. Earlier today the s p 500 had been up. 7 . Now fluctuating between small gains and losses. The dow is down, the nasdaq up slightly. Very small moves. Similar to yesterday. We were speaking yesterday, markets out more than 1 . The s p 500 closed down on the virus disappointment plus california reported its deadliest today. Something we learned is not priced into the wall of worry our setbacks around the virus. That could be something that is Holding Stocks back. It is also interesting to note the emerging markets are down, asia was weak. In