To get toay, a lot this week. Trying to understand the impact of the gradual reopening of the economy. What kind of impact it could have on jobs and productivity. We way that with the story on oil, one of the biggest of the last 10 days. Saudi arabia started doing this production cuts a bit sooner than expected. This is what im looking at overall. A lot of earnings coming through though be the big story of the week. You, have a data check for seeing the stocks in europe, the pound orally sterling up and then i quite look quite like looking at what we can expect. Is due to to speak shortly from downing street, we are live with what the Prime Minister has to say. He is back at work with the uks to tackle the coronavirus and ease the lockdown that has brought the economy to a standstill. As soon as he does it come we will bring you every headline on that. We begin this busy news monday morning here in new york state, yesterday the state coronavirus deaths dropping to the lowest of the most in months. Avernor cuomo setting out phased reopening the will begin with construction and manufacturing. It could start as soon as may 15. Probably upstate new york before moving to new york city. Governor cuomo says as long as we act prudently, the worst should be over. Plan tting a place in a plan to start easing lockdown measures on may 4. Many are set to start next week but the Prime Minister warning a second wave of infections would cause a resurgence causing irreversible damage to the economy. Todayjohnson back at work two weeks after recovering at his official Country House with talks of easing lockdowns in other nations, he is under pressure to explain the next step for britain. Report thatinancial the coronavirus death toll may bmo 60 higher than initial tallies. Mortalities in Different Countries show more deaths than usual. It if that same level of underreporting is true, the global death toll could be as high as 318,000. Officially insert currently sits at 200,000. The bank of japan vowing to buy as many government as many bonds as needed. Are talking on the measure, the bank hasnt bought at that level in recent years. More than doubling the amount. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. How im read viviana, this is bloomberg. Francine thank you so much. Conversationf this about the Asset Management industry. What it means and how they continue communicating. Difficult, soe how are the biggest Asset Managers coping and what will change. By delighted to be joined the ceo of aberdeen. Thank you so much for joining us. Difficult for your business and how this changes it . I think we face the same challenge everybody else does whether they are an individual business, the interest the uncertainty with what happens next and what the next steps are. In terms of her own business, its an incredible achievement to move from crisis planning and theory to crisis planning in actuality and weaving able to get over a very short number of of our people working from home. To discuss the trends in the marketplace there important to those making those allocations. The biggest uncertainty at the moment is what happens next and i dont think theres anybody in the world who knows what that will be. Francine that would be a fair statement. What happens to markets . Will it get worse before it gets better . We are not in a fullblown crisis. I think the markets got a bit ahead of themselves with the extraordinary fiscal and monetary easing measures that banks did will be enough to get us through this. Impactsin terms of the on the economy, the reduction in gdp the come through in the second and third quarters is likely to have a more significant hit to markets once that has been fully taken into account. That depends on whether the effective inn are calming the markets perception as to what happens next. The real risk is when we see the economic damage has been and how quickly the economies can come out of that. We are assuming things pick up in the second half, but the timing of that within the second half is anybodys guess at this point in time. Do you worry this becoming a financial crisis. Could there be another liquidity problem . I think the Central Banks have done a fantastic job in terms of making liquidity available which is meant the markets that functioned. In longer the crisis goes on terms of Economic Activity being severely constrained and people being unable to go about their business in the normal way, the not liquidity crisis soon becomes a solvency crisis for businesses that are unable to restart and for individuals. Its a timing thing. If we build to whatever the new normal will be relatively steadily for the next couple of quarters, then we should be able to avoid an economic crisis. But its dependent on whether the steps that have been taken for liquidity in the market and the steps governments are taking to ease lockdown over time are progressively successful. The worst thing that could happen would be a period of easing of restrictions and then lockdowns being taken again. I think that would have a significant effect on confidence. At the moment would you be in favor of continuing the lockdown or very gradually and slowly reopening the economy . I think like our own businesses, its the most impossible decision or policy makers a politician. Circumstance is no or society wants to see an unmitigated return to work where Peoples Health is at risk. Our loved ones, our parents, our children, ourselves. We certainly dont want that to happen, but the challenge is at what point do you have enough data and testing in tracing and tracking capabilities to say we andmanage the impact bringing people back progressively to work in different businesses with different lifestyle so that we can be confident that so far as we are able to we can give people comfort but we can manage the situation. That has to be driven by the data and thats were many countries in the moment are in the process of completing their gathering of daily data. Where do you see Investment Opportunities . Is it bisectors . I think there will be opportunities coming out of this. At the moment we are seeing it flow into liquidity. In terms of more longterm decisions. On the other hand, asia is coming out of the crisis ahead of the rest of the world because it went into the crisis earlier and some of the countries in asia have been extra narrow successful at mitigating the human cost of the virus. Asia looks as if its an investment flow opportunity ahead of many parts of the world and clearly there are going to be companies and sectors that will benefit from the flow, health care, i still think therell be a huge amount of investment with the Climate Change agenda. Infrastructure in the activities thend that will benefit need to get the economies going again and people back to work. Let me just jump in here. We are going to downing street. Here is the Prime Minister. But once again i want to thank you, the people of this country for the sheer grit and guts you have shown and are , itinuing to show every day know that this virus brings new toness and mourning households. It is true is the single biggest challenge this country has faced since the war. I in no way minimize the continuing problems we face. And yet it is also true that we are making progress. Icur Covid Patients in the and real signs now that we are passing through the peak. And thanks your forbearance and good sense, your altruism, your torit of community, thanks your collective national resolve come we are on the brink of achieving that first clear prevent our National Health service from being overwhelmed in a way that tragically we have seen elsewhere. That is how and why we are now beginning to turn the tide. If this virus or a physical assailant, and unexpected and , which i can tell you it is. Begun together to wrestle it to the floor. And so it follows that this is the moment of opportunity, this is the moment we can press home our advantage. Its also the moment of maximum risk because i know there will be many people looking now at our apparent success and beginning to wonder whether now is the time to go easy on those social distancing measures and i know how hard and how stressful it has been to give up even temporarily those ancient and basic freedoms of not seeing friends, not seeing loved ones, working from home, managing the kids, worrying about your job and your firm. Let me say directly also to british business. To the shopkeepers and onrepreneurs, to everyone whom our economy depends. Impatience, iour share your anxiety. Our drivet without and commitment of the Wealth Creators of this country, there would be no economy to speak of. There would be no cash to pay for public services, no way of i cang our nhs, and yes see the longterm consequences of lockdown as clearly as anyone. Urgency,y share your and yet we must also recognize the risk of a second spike. The risk of losing control of that virus and letting the reproduction rate go back over one because that would not only of death and disease, but also an economic disaster. And we would be forced once again to slam on the brakes across the whole country and the whole economy. Restrictions in such a way as to do more and lasting damage. I know it is tough and i want to get this economy moving as fast as i can, but i refuse to throw away all the effort and the sacrifice of the british people into risk a second major outbreak in huge lossoflife and overwhelming of the nhs. I ask you to contain your impatience because i believe we are coming down to the end of the first phase of this conflict and in spite of all the suffering we have so nearly fixated. We defied so many predictions. Our nhs toallow collapse. Have sohe contrary we far collectively shielded our nhs so that our incredible doctors and nurses and Health Care Staff have been able to shield all of us from an outbreak that would have been far worse. And we collectively flattened the peak. When we are sure that this first phase is over and we are meeting our findings. Rate of infection down, shorting sorting out the challenges of the testing and ppe. Time tohat will be the move on to the second phase in which we continue to suppress the disease and keep the reproduction rate down and begin gradually refined economic and social restrictions and one by one, to fire up the engines of this vast u. K. Economy. Process, these judgments will be made. We simply cannot spell out now how fast or slow or even when those changes will be made though clearly the government will be saying much more about this in the coming days. Thatt to serve notice these decisions will be taken with the maximum possible transparency and i want to share all of our working and thinking, my thinking with you, the british people. Of course we will be relying as on the signs to inform us. Well also be reaching out to fill the possible consensus across industry, across all parts throughout the United Kingdom, across party lines, bringing in opposition parties as far as we possibly can. The preparations are underway and have been for weeks to allow us to win phase two of this fight as i believe we are now on track to prevail in phase one. So i say to you finally, if you can keep going in the way that you have kept going so far, if you can help protect our nhs to save lives, and if we as a country can share the same spirit of optimism and energy whon by captain tom moore, turns 100 this week, if we can share the same sort of unity and determination as weve all shown in the past six weeks, than i have absolutely no doubt that we will beat it. Together we will come through this all the faster in the United Kingdom will emerge stronger than ever before. Thank you all very much. Francine that was the Prime Minister, Boris Johnson speaking at downing street saying he is no doubt the u. K. Will come back thatger and also implied locked in will be incremented. He says he understands the impact but wants to avoid a second round of infections. He also wants to get the economy moving as fast as possible. Lets go back to douglas flint. Difficult balancing act. Job . They done a good yes i think they have. One of the disappointments for me is its very easy to look at individual aspects and say could you have done more or less or could you have done it better. There is time for reflection on all these things once the dust has settled and we are well over the crisis, but i think the challenges that it had to be addressed by government in a who short space of time, would want to be in that position. While yes of course there are things they could have done better, i think theres been an extraordinary effort to have got to the stage and weve got to, not only done well but in many cases magnificently. The front line have been extraordinary and we owe them gratitude. We should be looking at the positives rather than trying to nitpick the things that maybe didnt go as well as they could have. These rich ordinary times. Funds facing an extreme uphill battle. Investors you say to who rely on that income . Its clearly very difficult. Includeffering most those who are retired with no ability to add to their pool of , much less than it used when when virtually Interest Rates are virtually nothing. Theyve been significant the curtailed in the crisis. Areng said that, businesses having difficulty in terms of the cash flow and funding have no choice but to cut dividends. , ipanies are seeking support think for those companies that can pay out a dividend and we are very fortunate and pleased and says something of our resilience. We are pleased we were able to recommend to shareholders that we do pay our final dividend. I think companies that have the sense to do so should in those that put their Business Model and the jobs of their colleagues at risk should not pay dividends , they should make their Balance Sheet more resilient and they should prepare to resume dividends once they have gotten the Business Model in the new world post covid. There is going to be a new way of operating for virtually all businesses after this. Im afraid part of the consequence of this crisis that those who have relied upon their capital performing in the way it expected they expected will be disappointed it will be less then what they hope for the shortterm. Hopefully the measures taken by the government and Central Banks and the companies themselves means in the long term it will be a better position. What does it mean for consolidation in the Asset Management industry this year . Is it on hold or does it accelerate movement . I think things will be on hold until there is a greater clarity in what is going to happen after covid is dealt with in terms of moving to the next stage. It wouldnt be possible at this stage to do due diligence. Sure that when this is over across all businesses but certainly in our sector, people will look at the benefits of diversification having a Broad Product range, a greater distribution, having greater modelin a lower revenue if markets stay at levels lower than where they were before we went into this, then yes im sure there will be some consolidation that takes place to adjust Business Models but i think we are well ahead of that being possible to do or become contemplated. Our responsibility is to make sure our workforce are well looked after and that we are agile and the way we deal with them and also respecting the fact many peoples family circumstances will be very different and whether theyve got children at home or parents they have to look after. We have to be very thoughtful about our colleagues at the moment as opposed to looking for opportunities that would add a greater strain. Francine douglas flint, thank you so much for joining us. Chairman of Standard Life aberdeen. We will have more throughout the program. Heard from the u. K. Prime minister, back at work. Coming up we speak to miles , chief executive of ds smith. Greatbout packaging, a look at what consumers are doing. In the meantime, this is what your markets are doing. This is bloomberg. W . W . Uhiono francine well, good morning, good afternoon, good evening. Happy monday. Another week, and a lot of people working from home, the Prime Minister of the u. K. Stay saying we are still staying in lockdown. Coronavirus the debts are dropping to the lows in almost a month in new york state, Governor Cuomo setting out a phased reopening to begin with construction and manufacturing. It could start as soon as may 15. Probably upstate new york, before moving to new york city. Governor cuomo saying, as long as we act prudently, the worst should be over there, now to the e. U. The Recovery Fund should be worth 5 trillion euros. Midperimeter says by september, the funds need to be available. E. U. Leaders have not resolved. If its Member States will be given grants or loans. Balance acult to market with output cuts. The massive glut is taking tanks to capacity around the world, despite saudi arabia beginning to curb output ahead of the start date for opecplus reductions. It is starting to cut from about 12 Million Barrels a day to the 8. 5 million of barrels. We end with speculation about north Korean Leader kim jonguns health intensifying this week and after unverified reports about a visit by a Chinese Medical Team and the movements of the leaders armored train. Fuelingweek absence is speculations, but south korean officials reject the idea that kim is either dead or dying. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, viviana hurtado. This is bloomberg. Francine . Francine thank you so much, viviana. The pandemic has fundamentally changed our supply chains, it also how we recycle and the packaging we use. Complex supply change genes are under more scrutiny than before as companies try to figure out how to deliver goods to people stuck at home. Center isy at the packaging maker ds smith, which supplies packaging to companies to amazon and nestle. Im delighted to be joined by the chief executive, miles roberts. Great to have you on the program. Thank you for coming on. Has it changed . Are you delivering more packaging to individuals and companies because we require more stuff at home, or are there parts of your business that have not been performing as well . Supply corrugated packaging. We have seen quite an increase in demand, particularly from the stopping,he people going to restaurants, eating out, eating much more at home, consuming more at home. You have obviously seen a huge increase in ecommerce as well. Red across europe and into the u. S. So we have seen a significant pickup in activity there. On the other side we have some industrialng, some grants, particularly in the automotive industry, and they currentiously found the environment very difficult. So we are growing with that. Quite a difference in the balance of this, much more towards hope consumption. That is really where we have we arecusing, where seeing volumes increase. Is itne how difficult for your supply chain . Is it difficult to get things out, ship things out . How are you, if someone requires more packaging in two weeks . Miles we it can be as much as a few hours, but we have to respond to our customers. It is one of our key focus areas on timing with delivery. In terms of our supply change, longtermlot of partnerships with many of our supplies, and it is at times like this that we really call on those relationships and clearly defined processes of how we Work Together to ensure that we are getting what we need to supply our companies. Overall we have been very pleased with that. Anare lucky that we are industry that is described as a critical industry. A lot of our packaging all of our factories have been open, and all of our suppliers have been open as well. There have been some challenges with distribution, about moving product between borders. We have had some very long delays in some countries. But we really are seeing that easing now. We are seeing countries with controls getting much easier, so therefore our supply chain is working well to enable us to deliver to our customers. That is a critical thing for us, particularly in this changing environment for francine i want to ask you specifically about amazon. How crazy is it supplying amazon right now . How do you keep up with this Online Shopping . Can you give us an idea of how much more packaging is needed . We supply many of the major detailers across europe. We are seeing that the volumes have grown substantially, particularly when they are general merchandising. Been fused with retail outlets that have been operating. So we have seen some countries our ecommerce has doubled what it would normally be at this time of year. It is even busier than at christmas, which is typically a very important period. And it is helping those customers getting the packaging to enable the product to be delivered to peoples homes. Forward, it looking think we could see a structural change in the marketplace. A lot of our consuming about ecommerce, seeing products at home, we think that is something that will be there for a while, and that has been good news for our offices. Toncine if you dont want talk about specific customers like amazon, can you maybe give us a sense of how much more ilers ing for these e are doing, about setting small parcels home . How has that been doing, for automakers and parts supplies . Miles what if we look at some of our industrials, safer automotive . The volume is a relatively small part of this. This is only probably about 1 or 2 of output, but there we see volume is strong, maybe 70 from normal. Coming from ecommerce, it has ofn about 13 , 14 percent our business. In some markets, we have seen that has doubled. This really has taken off. And it is not just in terms of the actual volume, it is the type of packaging as well. We have gotten very involved in supplying a number of drugs and home medicine to peoples homes, that the packaging has to be insulated, etc. , to make sure peoplee medicine reaches at their homes in perfect condition. So we are seeing real changes in terms of the mix of business as well as the overall volumes. That is what we are here to do. We are here to serve our customers, and we have been very pleased at how that has been operating. Francine do you see signs of recovery if your porter patterns, or is it too soon to say, with some of the larger items that could have maybe been postponed . Miles at the moment we have not seen any real change. If we look at the major markets, were starting now to see some countries ease their lockdown provisions, but we have to wait to see how that happens. Really, at the moment, we have not seen much of a change. We are all waiting to see what happens to the economy in general. There are some pretty bleak forecasts out there for the next few months. Hopefully the economy will start to recover after that. And we are seeing countries easing their lockdown restrictions in different ways at different times as well. So they have to work on a very local basis with our customers. Areake sure that we respecting the local laws. I think we are just going to see that gradually over the coming once, more and more countries will be easing the lockdown, and we very much hope that the economies will start to recover. I think there is no doubt it will be difficult generally for the next few months, but stimuli thath the are going in from various governments, we should start seeing improvement. As we are starting to rebuild the economies and bring them out of the lockdown. It is something we are focusing very much on. Also, how will that market looked over the next few months . To make sure we are positioning ourselves accordingly, because the market will be we need to be very life to that. Thats life to that. Live to that. Francine miles, thank you very much. Chiefroberts, ds smith executive officer. Coming up, we will hear from the adidas and bayer chief executive. Sportinggoods and how we are to executive, howief coronavirus to a bloomber vaccine. This is bloomberg. Francine good morning, everyone. This is bloomberg surveillance. Earlier on we spoke with the chief executive of adidas, Kasper Rorsted come and how much cash he needed going forward. Sper we have close to 5 realon, so we the question that everybody is asking is how quick will be recovery come, and i think china has been a good indicator in the First Quarter, what we saw, particularly in the month of march, with retail. From a cash standpoint, we will go through a very difficult year. Is there any reason that you would need to you told us previously, in an interview in march, that your Balance Sheet looks good as well, quite strong due to the work that you have that youg on it gun, and have done last year. Is there any reason that you would have to tap state loan programs for help . Kasper we did get an additional 3 billion in state backed loans, and the front runner was credit. The reason is basic. For see that when we had the conversation in march, and we are seeing a slow opening. That means we need a different Balance Sheet with the closedown world, where the views were very different, five weeks after we spoke last time, or six weeks after. You have done the right precautionary measures to make sure we have a healthy Balance Sheet. You say things changed in the last five weeks, but you had a great deal of insight for what is coming because of what you had seen in china already. Would it be safe to say that you have been caught by surprise in terms of how things have become for europe and the Global Business . Kasper that would be a gross misstatement. I dont think anybody in the world would have predicted that the world would close down within three days. Had that been the case, everybody would have acted differently. That the world would close down over three days, we did not foresee, and i dont think anybody else foresees. I dont think you can put that on the shoulders of adidas. We have put our Balance Sheet in place, that will withstand the issues. Matt i have to disagree. I had a flight back home march 15 that i knew the week previous i was going to have to cancel because i was afraid i would not be able to get back to germany. We were still buying back shares at that point, and that has made a lot of germans pretty angry, that you are buying back shares into march when we all knew the world was going to shut down, and then you are borrowing money from the government, from Government Programs the next month. That is a real concern for germans, and i think for shareholders as well. Our share stopped buyback on march 16, and that was the week in the world close down. So that is also a factor. I do think we have done many precautionary measures. In our industry is hit much harder because we are retail forecloses down, we dont have any revenue. My statement before, right now the world has been surprised about the speed of the that the world closed down with. What are you going to be doing to shore up your Balance Sheets . Are you going to be trying to take on debt, to repay the government loan . There had been suggestions that might be in the plan . First of all, we need to get our business back on track. Also, moving in we overtime are looking at what our alternative financial vehicles are that allows us to pay the loan back. The primary one has to be that our business gets back on track, and that is what we are working very hard on. The primary vehicle in the shortterm term is our business. Francine that is the chief executive officer of adidas, Kasper Rorsted, speaking with anna edwards early on. Coming up, we speak with the bayer chief executive, and we ask him about medicine and vaccinations. This is bloomberg. Francine bloomberg surveillance. Happy working from home monday. We hope everyone is nice and safe at home. A little bit of a lift to european stocks. Earlier, we spoke with the chief executive officer of bayer and drugs that would work against covid19. Rner we dont know exactly how the restart and the unraveling of the current lockdowns across the world is going to work, and we have said that it is simply based on the First Quarter to further have a perspective on the remainder of the year. Anna do you expect the Management Board to get the support of shareholders at the agm this week . What kind of a percentage would be a success . Within well, actually, the same talk of quarter one of 2020, if i look back at 2019, i can say as an organization we have delivered. We have delivered operationally, strategically. We have stepped up our engagement of shareholders than 500e world, more shareholders, representing 60 of our equity in the company. Feedback during these discussions has been appreciative and very good. We have delivered on all of our measures with very, very strong outcomes. For the company and our shareholders. So we are looking at an agm tomorrow that is of course going to be characterized by it being the first one ever of a company to go virtual as an online agm, and we have delivered, but i cannot speculate on the voting of our shareholders. I think everyone understands the covid19 uncertainty, the round up uncertainty is far more of a concern for your shareholders. What are you expecting as far as an Approval Rating . Typically german ceos get 90 or more. This is going to be, i assume, more difficult for you. When you consider 70 would you consider 70 a success tomorrow . Well, again, we are very happy with the performance of the company. Our organization has done a marvelous job. We are looking with confidence and optimism forward to the agm tomorrow. Covid is a concern. I think we have coped with it very well during the First Quarter, but it comes to the number of cases is not indicative to the justification of and we have been very clear on our position, and that has not changed a bit. We are doing this in the best interest of the company and our shareholders, and im sure they will appreciate it. The subject of covid19, you produce chloroquine. Do you have a timescale for when we will know whether chloroquine is useful in this fight . Do you have an expectation of it being useful . Werner well, we invented chloroquine more than 80 years ago. Indicated for covid19. It is indicated for malaria, so we do have anecdotal evidence from some treatments in china that it might work and help smooth the trajectory of the disease if given an early if given early with an antibiotic. Clinical trials are going on as we speak. We hope you have trials in the next weeks, and we can see better if it really works and we can actually provide significant relief to many, many people around the world. We are actually increasing and restarting our Manufacturing Activities in europe. We have secured significant Raw Materials to do so, to produce millions of doses, and once approved and proven that it works, we will donate all of that as part of our humanitarian efforts to help people and societies around the world. That was the bayer chief executive, speaking to anna edwards and matt earlier on. Now, this is what Boris Johnson, the Prime Minister of the u. K. , returning back at downing street today, had to say about the lock on. We are on the brink of achieving that first clear mission, to prevent our National Health service from being overwhelmed in a way that tragically we have seen elsewhere. And that is how and why we are now beginning to turn the tide. That was the Prime Minister, Boris Johnson, speaking earlier, saying that he will also release more details about the lockdown, and of course what happens next in coming days. This is what your markets are doing. If you look at european stocks, they are actually gaining. If you look at some of the risk assets out there, they are down. I also want to show you sterling because it is something we are keeping an eye on because it gives you an indication of what is happening in the case of brexit turning. Overall, this is what we are looking at. Eurodollar, 1. 0846. Crude oil, 14. 71. We will be joined next by tom keene in new york. This is bloomberg. Francine italy announces a path out of the lockdown france aims , to follow suit. In the u. K. , Prime Minister Boris Johnson gets back to work. Adidas forecasts its First Quarterly loss in more than four years. Bayer reports adjusted earnings up 10 in the First Quarter. And how are the worlds biggest Asset Managers dealing with the coronavirus challenge . Our exclusive interview with the chairman of Standard Life aberdeen this hour. Well, good morning, good afternoon, good evening, everyone. This is bloomberg surveillance. Happy monday. We hope everyone is happy and safe at home. Tom keene is happy and safe at home. We had conversations with ceos about how their businesses will change. Course,at earnings, of further into the week with deutsche bank. Seachange is a real here, francine. It comes down to central banking with bank of japan overnight and ecpa
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