29. 89. Areie in the u. S. We getting a bounce because fundamentals have not been in sync for a long time. The s p 500 looking to finish the week higher. Points, well above the 2200 mark right now. Energy companys with a better week for crude. Up to. 5 . We are back down to 64 basis points on the 10 year. The jolt we got from the quarterly refunding announcements seems to be pricing itself out of the market. We will see about options next week and what that does to volatility in treasuries. The dollar index showing weakness today, at 99. 48, to the benefit of the likes of sterling. As you mentioned, 1. 2452 right now. Guy . Guy lets get back to the payrolls number. Larry kudlow speaking to jon ferro on bloomberg earlier on, trying to frame the april jobs anort after employers cut unprecedented 25 million jobs, triple the Unemployment Rate to nearly 15 . Larry this jobs report today is full of heartbreak, is full of hardship. I believe that it will prove to be temporary. The second half is going to have very significant bounceback in economic growth, and that will head into 2021, which could be a fantastic economic recovery here. Guy 20. 5 million jobs, 20. 5 million people. We are joined by the head of fx strategy. John, as larry kudlow says, these are heartbreaking numbers, looking past it, already pricing that the dollar is down a little bit but stocks are trading higher. On the back of this data. Larry, talking about this very strong bounceback. That is what the market is trying to handicap right now. Do we just ignore current data given the fact that we are so much there is so much variance about what the bounceback will look like . Pretty the market is trying to price the shape of the recovery. I think of course there will be that ion of the bounce, think markets are trading on the critically now. On expectations for recovery. There are solvency issues that are happening now, and history shows when we go through a see iton, we could again, the small vshaped portion of the recovery as people simply exit the lockdown. The times will also be greater go ahead. Sorry, we are probably overestimating the liquidity factor at the moment, underestimating the solvency factor. As you say, it is going to be tougher a lot of these jobs to come back, at least in the short term. Uncle mickey was talking about a w shaped recovery Michael Mckee was talking about a w shaped recovery. Coming off a little bit and then going back up again. In that kind of scenario, you believe that actually we are still in for tough times going forward. Do i get back into the dollar . Is the dollar the place i continue to hide out . John that is the ultimate question here. The market is trying to decide now. We have seen the dollar coiling in sort of a shrinking range in broad terms, for the longterm implications. I tend to believe we may see one more reasonably large surge because at some point the fed cannot put the entire world on its Balance Sheet. Be it bit more of a credit crunch to the dollar side. That is just my view. There is the possibility this market is reflecting fundamentals, john, and i cannot remember the last time it did that. John that is a very good point. Aur student to talk about bubble in the the solvency issues in the corporate debt markets that is my scenario, that we would see another surge in the dollar. At least one more. To have to going leave it there. We are having a few issues with your line. You are cutting in and out. We will try and fix that and come back to you. Lets go to taylor riggs, talking about what is happening more broadly in the markets. Taylor i wanted to talk about the broader major averages. This is one of the first few days where tech is not the big outperform. Big outperform her. Today it is slightly behind the dow and the s p 500, and this does, on a day of some pretty bad economic data. But this is a theme we continue to see come on days where there are poor economic numbers, the market continues to rally. The market is looking through a lot of that data and looking to the future. Thinking that the worst might be behind us. I want to flip up the board and dive into some of the more economic numbers that we have been seeing this week. Factory orders down more than 10 . Ism Services Index well into contractionary territory with the 41. 8 reading. The payrolls report, as we know this money, showing 20 million jobs are lost. Having in an employment rate of 14. 7 . I want to flip up the board because we were talking a lot about the nasdaq and the typical outperformance that we have seen. The nasdaq has turned positive for the year. This happened yesterday at the close, and the gains of more than 1 today continue that theme. A lot of what i am hearing is tech, what we are using when we are at home. So it makes sense that tech and the Technology Stocks are leading here. You do also have the qqq. The nasdaq etf crossing that 100 billion mark for the first time ever. Individual movers because we are wrapping up earnings season. They reported the largest volume point quarter in the companys history. Zillow going back to resuming their practice of home flipping. They are reporting that people are indeed searching for new homes. New score posting a 1 billion loss. But berdych will be giving up his bonus to help stem some of those lost but murdoch will be giving up his bonus to help stem some of those losses. Noble energy here is up after the company said they have some pretty good economics, around 40 a barrel for oil, and they should be able to restart most of their wells over time, so you are getting some movement here within the earnings stocks here. Thank you to taylor riggs with our market deep dive. Still ahead on jobs day, the Ecbs Christine Lagarde pushes back against the German Court Ruling that challenged the legality of the central bank on purchase plan. It was a very interesting statement sent out by the ecj earlier on. A short couple of paragraphs, but very to the point. We will dive in and just a moment. This is bloomberg. Guy fromlondon, im guy johnson in new york. Lets catch up with the bloomberg first word news with mark crumpton. Mark the top trade negotiators to the United States and china have agreed to cooperate on the trade deal. It is the first time they have spoken since the agreement was signed in january. So far china has run behind the pace for buying more american products. The uncertainty caused by the coronavirus outbreak could hurt beijings ability to meet the targets. President trump told fox news that he was having a very hard time with china. As we have been reporting, it is the biggest downturn for American Workers in history. Employers cut 20. 5 million jobs in april, and the unappointed rate more than tripled to 14. 7 percent. That is the biggest since just after the Great Depression of the 1930s. The losses erased roughly all the jobs the economy had added in the past decade. Germany, the number of new coronavirus cases rose the most in a week, the days after the government that the government declared the first phase of the pandemic to be over. Germany is planning to reopen hotels and all shops. British government is trying to dampen expectations that the coronavirus lockdown will be significantly rollback. Sunday Prime MinisterBoris Johnson will set out a plan for how restrictions will be eased. Bloomberg has learned there may not be a major change until june. The u. K. s infection rate has crept up in recent days. 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, mark this is bloomberg. Crumpton. This is bloomberg. Vonnie thank you, mark crumpton. Bank head of fx strategy, i want to read the statement by the European Court of justice. The court of justice alone has jurisdiction to rule that an act of any you institution is contrary to e. U. Law. It goes on to say that like other authorities of the Member States, National Courts are required to ensure that e. U. Law takes full effect. This is effectively the ecj telling the German Constitutional Court thanks for the opinion but it is not relevant. You still have to allow the ecb to do what it is going to do. Is that right, john . John yeah, it does appear that the european institutions, both the court of justice and the ecb are simple he going to throw their weight around, and more or less say we have established what the right thing to do here is, and whether it fits in the treaty. It is a question about the long fuse issue of the existential question, which i think will not go away until we have mutual debt. For now we can tap this down and maybe it will come up again. We can tap this down and maybe it will come up again. What ites not receive feels is a satisfactory answer from the ecb, etc. , but i just the long long fuse, slow burn issue of the existential question, which does not seem to be going in the right direction in the longer arc of things. Vonnie that said, there is at least a definite directive. A rip on this after the ecb cannot byebye buy bonds or whatever it wants to do . Don i guess they are saying that this is not a john i guess they are not saying the most annual framework for the budget shapes of, how that will be funded and what does theirs do . Fallout intentions across europe from that, so the bigger focus seen false start in terms of the Market Pricing risks before on this institution. John, a fewpeak, things coming out of the e. U. , the executive announcing external border closures for 30 mostdays, to prolong the travel into the block until june 15. It will be a slow and gradual recovery we are likely to get in terms of the opening up of travel, which is a fact of airlines in europe and around the world. Talk about what is going to be coming down the pike toward italy. We have another rating review coming up in an hour or sos moodys coming out with its rating. If moodys downgrades italy into junk territory or even if it puts it on negative watch, how would you respect the euro to react to that if at all . How would you expect the euro to react to that, if at all . . First i would see how the the ecb is going to backs up this in practical terms. It has already indicated by its new purchase programs that it can tilt its purchase more than it could in the past toward peripheral debt. I think the market just takes us as further evidence of the , is aerm question critical event risk in the near term. These two things are starting to interplay now. We have question marks being asked about the ecbs ability to act, and this is the longterm program we are talking about, the longterm programs, and the proportionality about that, potentially being pushed into junk status, which causes questions about the ecbs , wearing on the greek crisis. That thea danger markets kind of reasonably relaxed attitude at the moment starts to spin out of control as it did back in the euro zone crisis . Can we go from zero to 100 miles per hour, and how quickly can we do it . I think you pinpointed it exactly. I think the ecb can keep things technically propped up and sort of market equality market liquidity ad infinitum, but as it does so it becomes political, and it is up to the Political Leadership of europe to decide this is the ultimate crisis to decide whether europe can do it or not. It is around the multiannual framework, how much is loans, how much is grants, how that is all figured out. To me the science is just not promising. I cannot tell you the time to this. The first indication was that recent council meeting. Lets wait and see. The other thing that could happen is something sudden on the political front domestically in italy that could point toward a new election, etc. It is a wait and see, but i agree that there is a trigger risk out there. Guy just getting more and more symbols of the division that exists, the divisions that exist within the euro zone. John, thank you very much indeed for joining us today. U. K. And denmark having holidays today. John hardy joining us from saxo bank. This is bloomberg. Vonnie live from new york, im vonnie quinn along with guy in london. This is the european on bloomberg markets. Lets focus on europes economy. Christine lagarde spoke today at an online event where she defended the Central Banks purchase plan. Germanys Constitutional Court put out a statement to the effect that any other opinion did not count. It has the jurisdiction on this one. Lets bring in maria tadeo in brussels. How much is this binding . It is a statement and at the end of the statement it actually says this is not a court ruling, this is a statement. Maria this all goes back to the ruling from the German Constitutional Court at the start of the week, which said that the old program, not the one that is currently dealing with the pandemic, constitution, and there are two months to fix it, and i mean the European Central bank. It is not clear the ecb should actually allow the German Central Bank to deal with this, but fundamentally, you are seeing two reactions. The European Central bank is taking note of this, but the independence of the central bank is above any of this. To turn thisant into a nasty fight between the ecb and the german court, so what is unclear at this point is whether they will do anything at all or delay the action. Almost saying this is something you have to do with, it is not our response ability. Secondly, you are seeing Strong Language between the german ecj, the european aurt, saying that this is not place for the court to intervene, and it sent a resident it set a precedent that we are starting to question on rulings. And you are allowing members of the European Union saying i dont like this, im going to take it to court and perhaps not even follow. I will have guidance coming from the court, being institutionally above them. Guy the problem with all of this is that ultimately german politicians answer to the german people. You have only got to look at the front pages of the german newspapers at the moment to appreciate the growing concern about what is happening here. Views areman courts to be ignored, ultimately that fire ofow fuel on the german public opinion. How problematic could this fight become for the european politicians . A deep division already exists, maria. This is only going to make it worse. Maria i think you nailed it. The problem here is that there are two things. One is that the german public opinion, they could say this is a fiscally conservative country, a country that already questioned whether the amount of stimulus that was being put out not so much with Christine Lagarde but like mario draghi in the past was even appropriate, the president of the german Central Banks always took a very hawkish line. On the one hand you have this perception where the german public, that something here is not fully working and now you have the biggest court saying this is against our constitution, which, if you can imagine, many germans do appreciate and love, but also you have a big awkward moment now, a difficult situation for the German Central Bank because on the one hand they have to respond to the European Central bank, they are part of the euro system and it would be unprecedented for them to take any action with a tremendous impact on the market, but they also do not want to be seen as operating outside of that if that is with you german court is saying. Vonnie we got headlines a few moments ago that the European Commission is inviting Member States to extend the research and on nonessential travel to the e. U. Until june 15, so this is essentially all of the european states within the schengen passport free zone. It is asking them to then act on the travel ban until june 15. How is that working . Have people been staying home and not traveling to Different Countries . Maria yes, and it is likely now that Member States will say we will accept that accommodation and we will extend a ban into the European Union that into traveling into the European Union for another month. It was supposed to come to an end on they 15, but it is likely that will be extended further. There is the question whether there will be any summer for europe, whether we will see tourists coming to europe. This is a key sector for many countries. Looking to greece, 20 of the nations gdp comes from tourism, so this really does have a lot of economic implications and repercussions for the european states. But also Industry Leaders are airplanes,get airlines, all of this. You can see that affecting things for a very long time. We are going to leave it there. Lufthansa saying early on it will service 116 destinations with 160 planes from june. I want to take us back to what is happening in the u. K. Here. We are watching obviously the celebrations of the e day victory in europe of ve day, three in europe day. The london market is closed as a result of that. We are counting you down to the end of trading for the other markets. This is bloomberg. The 30 seconds to go until end of trading for european net cap equities. Europe victory in friday, the london market is closed, so there is no trading on the ftse. Let us show you what is happening in terms of how the markets is progressing. We have seen the german markets trading higher and we see them being pushed towards the back end of the session as we have their payroll number coming through. We saw a positive response in equity markets and the dac is trading up 1. 5 . We were talking to joe a little bit earlier on from siemens, but in terms of the breakdown, it is important to think about how we traded on the week. It has been a mixed week for european equities. That me show you these other stories we have developing let me show you these other stories we have been developing. It isc down by. 5 , that the number at the bottom that i want to highlight. The italian market is coming into the focus from the point of equities, but also from the point of the btp market, these two factors are closely intertwined. We have a review coming up for italy very shortly from moody, Pay Attention for that. A quick look at the story and how we have been doing in terms of positioning, and again it is worth paying attention to what is happening at the banking sector. Right at the bottom is what you want to bear in mind. Mining stocks have come back along with financial services. Retail bouncing back as well. You have seen some of the fashion brands coming back strongly. This is some of the names that we are watching right now in europe as we come through the close. Lvmh, a story once again when it comes to what has been going on with the French Market and we have already seen siemens and we were talking to joe a little bit earlier on, but it has been a week at which we have shifted sideways looking for a sense of direction. Equity markets in the states, particularly the nasdaq, drawing higher. Europe does not have that heavyweight technology position. Vonnie the nasdaq has been positive for two sessions. Ais is the second session in row. S p 500 at 2920 of one. 4 . Some of these are electricity companies. We have yields back to their own old range. 66 basis points. The shock of quarterly refunding announcements coming out, or at least at the front end, back in her comfortable zone. Treasuries less optimistic and stocks have been down. To 99. 60. Index down that is look at the stocks on the move because we were stock focused on the jobs report all morning but there are some stocks moving independently. , lower, but analysts solve longterm games gains, and the stock is up 90 from its march low, so this selloff is not as unfortunate as it looks. Lookingp 2 and we are at analysts saying that the park could open 41 days earlier than we had thought, and we saw the news that the tickets to the reopening of the shanghai disneyland sold out within minutes, perhaps a clue into how Consumer Behavior will be once we start to reopen, even if it is slow. Guy let us talk about the big picture, i am trying to figure out what we are witnessing. There is a race on between the United States and china on it comes to the vaccine. President trump is betting on a big Research Efforts called operation warp speed because we needed at warp speed that pulls together a bunch of pharmaceutical companies, government agencies, and the military. Anda is doing this as well, the two countries are engaged in a fight for dominance impacting the story, and we are watching it carefully including people including the rollout of 5g to this vaccine story. Are we witnessing a new kind of race when russia went into space and kennedy had to make that famous speech about going to the moon. It kicked off a huge arms race between the United States and the soviet union. Joining us now is mark champion. The parallels are there in terms of the impact and the site that science could have in terms of geopolitics. What do you think the development will look like in a much more interconnected world . Can we find ourselves in that similar situation, or does one country having a vaccine kind of effect another country . Think the thing that is similar in the thing to focus on is the degree of competition. Hadolitics has return, we vaccine issues around h1n1, we smallpoxsmall parks during the cold war, and hivaids after, and since the cold war we have not had geopolitics around one of these issues. Question of what would other countries do was not so important. Situation thata is more reminiscence of that cold war competition. The point is that when geopolitics dominates, it dominates everything. This kindwho are in of competition will get stuck into that is of importance, and certainly, dealing with the andirus in the work the workforce is at that level. There is no way to escape it. About thist we come veryat you handle this well thought out drive for collaboration and make sure there is an actual equitable distribution, it is very likely it could get run over like a truck by National Interest and geopolitics. A cold do you foresee war over biotechnology when this is a virus that can be spread from any site in the world. So if china is a little bit proprietary about what it comes up with, it could come back and hurt china again anyway. I think what you need to think about is how this will play out. If someone comes up with a vaccine, let us imagine that it is china. They have to make a decision, they have one billion people to vaccinate. It takes a little while to make one billion vaccines. And, there will be other countries saying, give it to us, give us the technology and etc. The question for the chinese at that point will be, do we just vaccinate our people and we will get that get that done and get our workforce and focus on that, or do we collaborate . And they are going to be real issues for them to think about in terms of how fast do we want the United States to get back vaccinated also. Contrarily, imagine the u. S. Response, which is very likely has theirchinese version of the vaccine, is it safe, was it done properly . Were corners cut . Think that case they might say wait for our vaccine, but wait until some company that we recognize like pfizer or whatever one has produced a vaccine which has been properly tested and approved, and so on. Marc, if you look at this from a european perspective, we need to pick sides . Do you need to be on one side of the war or the other side of the war . Do you need to wait for the Pfizer Vaccine and wonder if that will come with things attached to it, like we will give you the vaccine but you cannot buy 5g technology . How does it work if you are not one of these two powers . Marc that is a very good point and a very good question. Theeurope, it is disaster scenario is being forced to choose sides. They have two essential Economic Partners and it cannot do without either. The more intense this competition gets, and the point about this Coronavirus Crisis is that it is not creating new trends or competition, it is accelerating competition. And, you can see that in the language that is getting thrown back and forth between the two sides. It makes it more acute, which is a bad thing for those caught in between. Europe is definitely caught in between, and the french and German Response is logical, let us have an International Collaborative response which is handled by the who, and all of these different vaccine programs, we do not know which one will win, but let us agree that the Technology Gets despairs. It is very logical and makes a lot of sense to europe, it protects europe, but it is not the way things that will play but it is not necessarily the way things will play out. Vonnie from your point of view, who comes up with something first . Marc i really have no idea. O. Says thee w. H. I programs that are most advanced in china, there is one in which the military academy is involved that is in the second phase of human trials, and we should get some idea of what happened in those trials around the end of may or early june. But, it is early days, any time you Start Talking to scientists who are familiar with the process, they will start to choke at the kinds of schedules that people are talking about, by january Like Operation work speed aims to have 300 vaccines. It is difficult to say. Vonnie i am just going to jump in here, and thanks to you. He wrote a wonderful column about vaccines and the race for them. We are showing the live pictures of the president and the first lady, the 75th anniversary of ve day at the world war ii were mario to pay tribute memorial to pay tribute to the 10,000 allied forces that did not make it past this day 75 years ago. That is the world war ii recognizes though americans that the americans that served and also recognizing the victory that achieved freedom, really, around the world. This is a moment of silence, i believe. [trumpet playing] guy live pictures coming to us from washington, d. C. And the Second World War ii memorial the Second World War memorial. Today,ictory in europe 75 years since the end of hostilities in europe. This is europe. This is bloomberg. Vonnie i from new york, i am vonnie quinn. Along with guy johnson in london. This is the european close. And it is time for the Bloomberg Business flash. Accused ofing compromising workers safety in order to keep the making computer chips. People who worked at a factory in arizona said that staff were not kept apart from people who had tested positive. Rose briefly above 10,000 for the First Time Since february before the worlds thatcryptocurrency is before the reward that miners get cut in half. Of course, all of the comments did not help either. Disneyland shanghai sold out of tickets a few minutes after they went on sale. It is a sign that chinese consumers are ready to spend in the wake of the coronavirus pandemic. The theme park has been shut down for four months. Shanghai disneyland has a capacity of 80,000 visitors, and one third will be in service. That is the latest Bloomberg Business flash. Time for our stock of the hour. It has to be uber. I was here when they reported their Quarterly Results after the bell, at one point jumping as high as 8 extending a two as 15lly as of as much to 16 . This is when they are seeing recovery and rides are increasing in places that eased shelterinplace orders. I want to take a look at the exact growth in individual business line, because this is where diversification is helping uber. The uber eats business grew and so did the freight business 50 or so which offset the decline you saw of about 5 of ridesharing, which was the first decline ever. Of 8 e getting a total bookings growth because of help from the eats and frates business. Flipping up the board one point of concern has been about cash burn and cash on the Balance Sheets that the ceo did come out and say that they have about 9 billion of cash, and are preserving that by cutting 37 hundred jobs and reducing their footprint in places where uber eats is not possible. We know that that businesses cash intensive and competitive, so all of those measures should keep cash at above 5 billion by year end. I want to flip up the board because the debate continues about who is better to weather the storm, uber or lyft. Diversification is helping the share private performance and price performance, and lyft is not. Some analysts thought that lyf t would be better. Uber said that Kevin Percival given their exposure to the asia business, they were seeing declines. Lyfts exposure to north america might hurt them considering it is a smaller market. Uber has to be the stock of the hour. Guy absolutely. Ipo,ss a year on from the and i guess managhappy they gote way and that Balance Sheet strength will be critical working through this process. Taylor riggs with the stock of the hour. Let us talk about what is happening in italy. We are awaiting a review. When it is already on the lowest on the ig rating. We will watch how the market will react to all of that. We will talk about that next. This is bloomberg. Vonnie welcome back to bloomberg markets. Europe struggling with the coronavirus no less then the United States. Francine lacqua spoke with the president of the ecb as part of a panel discussing. Central banks are driven by their mandate. They have the privilege of being independent institutions accountable to the european parliament, to which i report back and am accountable to, and i go every three months to tell about our action and or tools, and how we monitor and assess them, but, we are also mandate dictatesnd mandate that we do whatever is necessary. And, whatever is needed in order to actually deliver on our purpose, which will be a factor of circumstances. To give you an example, we are currently, and we have said the same thing, going through exceptional circumstances. The Global Economy in the euro area, where i have to be active, is facing this unprecedented stock that we could have not and that not imagined. In that case, you clearly have to go beyond the normal, including the normal and conventional tools to use things of an exceptional nature, and that have to be designed, calibrated, and with the appropriate level of deviation, and room to maneuver in order to actually deliver on that mandate, whether it is to avoid the tightening of financing conditions or to make sure that Monetary Policy is transmitted across all jurisdictions in the euro area, that is what we need to do. And, we are actually doing it, and will continue doing so because that is what drives our action. Francine what is on top of your worry list . Christine this may surprise you. Ut i feel fear two ws number one is war, because i think on top of everything we have at the moment that would be the most aggravating factor that we could face, and my second w is the second wave, if we ever have a second wave. When we look at analogies like the spanish flu, unnecessarily called spanish for that matter. The second wave was even worse than the first. Those are the two things on my humanitarian, as a person. As i look at the economic consequences of all of that, clearly, even without the ws, those are my fears. I think that we have the most unprecedented economic crisis we have seen in these times, and the damage that is it is thatcting around the world na knowsline kristali better than i at this time is damaging families, and jobs. Goodmply have no real sense of how badly economies are effected and we are seeing this on the basis of scenarios, because we do not know. How we be a factor of get out of those lockdown measures, at which pace, and at which sequence. If we do, we do not know either how fast, and how strong the recovery will be, because it will be a factor of the measures undertaken at this point in time. So, that is the situation we have, and in the face of that we have to take all possible measures and policies to help with maintaining the situation and sustaining it for as long as ather the shock to help families, firms, and governments to move to a recovery phase. End of ourt was the talk with president Christine Lagarde. To look up more, it was a fascinating interview and of course the imf taking part. Powerup, balance of with david westin. He will be speaking with james. Guy from new york to our Bloomberg Television audiences worldwide, welcome to balance of power where the world of politics meets the world of business. We will start once again with the markets, because we had abysmal job numbers out. Nevertheless, the equity markets are up and Abigail Doolittle will explain why they are not selling. Incredible,is just really devastating from a human and economic standpoint, so you think it would would take it would take a troll a toll, so we are talking about the disconnect between wall street and main did and main street. The s p 500 up 3 on the week and this has a lot to do with fed liquidity. The fed really getting in there and making sure that the Financial System is liquid and moving well. We see markets and risk assets responding well as has been the case, quite frankly, over