And the news for china, sense that the president is cking supplies for huawei [indiscernible] on slot for china. We have the index above 100, and the 10 year yield at 62 basis points. The market except in all of this dire data we are getting this morning. s get to that data now [no audio] michael why that is, unless people just sort of got used to what was happening, and the fact that they have been locked down and couldnt go shopping or Something Like that. That is the only thing i can think of, and maybe the idea that as the weather gets warmer, they are seeing they are feeling a little bit better. I have no good answers for that. For theay, the numbers sentiment are really high, but they didnt do what they said. They didnt go shopping the way they said they would because retail sales were down 16. 4 on the month. That is a new record drop for the month of april. Of course vonnie vonnie vonnie and of course, the data earlier on included retail sales , but that was only temporary as well. Michael this whole month was just kind of a write off. 7 decline in apparel sales. People just didnt buy anything. You kind of just have to say this is what we expected. We thought this would happen. The idea of retail sales falling , followed by the Industrial Production numbers which were truly terrible as well on the month, not only did we see Industrial Production down 11. 2 , manufacturing production fell on the month by 13. 7 , and that is a record going back to 1919. We shut our factories down, and that is what happens. Everything just falls off the table. At that point, there is just no the data coming out about u. S. Today. Sentiment numbers for the university of michigan, we might have to look into. Vonnie i do want to look at the huawei problem as well because this is another effort on the part of the president to punish china, but it is going to have an impact on the Semiconductor Space as a whole, not just huawei. The editor of the global times, seen as something of a mouthpiece for the Chinese Communist party, tweeted today that they may make it harder for cisco and qualcomm to do business, and may also cancel orders for boeing airplanes. This may have a cascading effect on american companies, so at this point we are all waiting to see which way this goes. Obviously, the president s actions to keep chips from huawei are a real problem for that many factor, so the chinese could have motivation. The question is, where does it stop if we go from here . Vonnie obviously it has a huge impact on companies supplying those chips as well. We are off of our lows, but we are to fully going to see those Companies Take a hit today. When do we start seeing d into marketse and the Economic Data . Michael probably you will have to wait until you get data in june. The fed has a weekly indicator that puts together highfrequency data and stuff we get weekly. That may show some improvements, some bottoming out in net improvements, but it is not going to be really fast. The markets have been the equity markets. When i say the markets, i dont mean bond markets, but the equity market has been decoupled from the economic fundamentals, so they may rise sooner than that on this data. But dont confuse the equity market gains for what is actually happening in the economy. Vonnie central bank wise, we have interesting to filaments this week, with the fed saying negative rates are off the table, the boe saying some things alamo saying something similar. Markets are laughing it up, almost like the andrew cuomo of new york city to markets right now. Michael investors have no idea what is going to happen and when. A lot of people are saying one of the big reasons that equities have gone up is all of the Central Bank Liquidity that has been pumped into the markets and is promised for the future, so they want to know if that is going to continue. Vonnie michael mckee, i think we have to leave it there. Michael mckee is our International Economics and policy correspondent. Coming up, the outlook for oil prices in our exclusive conversation with opec secretarygeneral mohammed barkindo. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. Oil is headed for a Third Straight weekly gain a supply is being cut around the globe. Joining us now is an exclusive interview with opec secretarygeneral mohammed barkindo. We are joined as well by bloombergs annmarie hordern. Mr. Secretarygeneral, can you tell us how well the countries of opec and opec are adhering to the agreement struck to cut supply . Mr. Barkindo thank you very much for having me, and good afternoon from rainy vienna. Historic agreement came into effect on the first of may, just a couple of days ago, and i can tell you that we are all ramping up all participating countries, all ramping up their level of compliance. So far, so good. Annmarie mr. Barkindo, nice to see you. The next big question is what happens in june. July, the 9. 7 for becomes 8 Million Barrels a day. Will holdnk that they onto this cut, or will we see the group start to taper those cuts for the rest of the year . Mr. Barkindo as you know very well, our agreement is for two years, and we had agreed for 9. 7 june,e month of may and and then it will taper off to 7. 7 for the rest of the year, and then 5. 8 million from yearry 1 year january 1 1 next yearjanuary to april 2022. Also, importantly to note is that some countries like the kingdom of saudi arabia, kuwait, and the United Arab Emirates have come forward with additional voluntary supply adjustments in the region of day, 1. 2 Million Barrels a and this is also on top of the baseline, effective baseline that they were coming down from in april, which in total, just these three countries have effectively reduced production by about 2. 7 4 Million Barrels a day. So bringing in some total in fortotal at the moment opec . So if you take into account the involuntary shut ins, as well as voluntary shut ins globally that we are closely monitoring, the numbers are evolving. Moment, our numbers show an effective shut in of about 3. 6 Million Barrels a day globally, including in the United States, bringing the 17. 2 4total to about Million Barrels a day. So far, so good. We are closely monitoring these develop ands, and the conference in june will look all of this data, all of the scenarios and options depending on the demand outlook going out to the second half of the year, and the recovery plans of the Global Community as we navigate ourselves out of this horrific pandemic. Vonnie as you look around the world at the shut ins and at the demand picture, isnt your contention that perhaps the worst of the demand destruction has now passed . Or are we still going to see more demand destruction . Mr. Barkindo there is no question at the moment, although remain opec, we cautiously optimistic that the worst is behind us. What you saw in april was howaordinary, and you saw remember countries, together with our allies, rose to the challenge under the able leadership of the kingdom of saudi arabia and the russian federation, and all of the countries to confront this double whammy of unprecedented proportions, as well as the supply shock in the middle of a pandemic, when more than half of the global population is in one form of lockdown or another, bringing the Global Economy literally to a standstill. Vonnie what is your base case right now, given what you can see visibility wise for the second half in terms of those cuts . Will you be able to taper . Will opec, opec countries begin to ramp up production ever so slightly or taper off those cuts . Mr. Barkindo there is a growing consensus that the Global Economy will begin to rebound in the second half. It is the form and shape of the recovery that is in contention. But be that as it may, we will look at all options when we meet in june, depending on the impact of this virus, as well as the impact of the recovery plans, as well as the outlook for demand going into the second half of the year. That will inform youarie i think we lost there. I hope we get him back. That was the secretarygeneral of opec, mr. Mamba barkindo, the first time he has spoken to us since that Historic Deal and the implosion of oil prices. Hopefully we will be able to get him back. Vonnie it is an optimistic picture, and i guess it is his job to keep the optimism out there, but seeing as the worst of demand instruction is behind us could actually be good for oil prices and for the next meeting, which is in for a whole month, so a lot of time will have passed by then. Crudesly, we have brent trading at 31, but wti is above 29 a barrel, so the market definitely taking a little bit of an optimistic and bullish take away from the idea that we have had such a hard time of it. Annmarie they are also putting a much higher number on this supply coming off the market, and also, they seem pretty adamant that these countries are cutting. You have to think that from this week alone, we had saudi arabia, the uae, kuwait. They are going to cut even more production. That brings us to 9. 7 Million Barrels a day. This morning, i also spoke with the omani oil minister. They are part of a plus side of to go alongside with what the saudis, the bradys nd the, and the, roddy and the emiratis are doing. Who will follow the kingdom and cut even more before they meet in june . Vonnie exactly. I know also on both of our minds to ask him is the involvement of the United States. Even though the u. S. Really isnt part of any of these groupings, President Trump had put significant pressure on opec and opec countries to make sure that this works. Obviously the president is concerned about u. S. Shale companies, but he also wants to get reelected. He is also quite happy with lower prices, and that translate to the gas pump, not that anyone is actually at the gas pump these days. Annmarie gasoline is picking up a little bit in the United States, but as you say, we are seeing really historic lows for gasoline. Obviously an implosion in the oil prices into negative territory. The president of the United States was touting this deal. He helped bring the russians together and the saudis together. That is a big question for opec. What does the United States play in this future role . They were a big part of this agreement, bringing all sides of the table together. The reports coming out was almost that the saudis were under immense political pressure to do something, cut production and get prices higher. Of course, that is because the u. S. Is now the worlds biggest producer, and the oil economy in the United States just detached millions of jobs, so it is crucial for donald trump in an election year. Vonnie so our things once again to opec sicker terry general mohammed barkindo, and to bloombergs annmarie hordern. 29. 02il now trading at for a barrel of wti. Brent crude trading at 32. 01. Still ahead, we will hear from Andrew Robertson of bbdo worldwide. We will hear all about the advertising space and how demand destruction is impacting the market as well. We will also hear from the Planet Fitness ceo, chris rondeau. Planet fitness counting a lot of franchisees. How are they faring, and will people be going back to the gym . This is bloomberg. Vonnie live from new york, im vonnie quinn this is bloomberg markets. Lets get to dave wilson for our stock of the hour and more. What are you looking at . Dave i am looking at qualcomm. It has been exactly a year since President Trump signed an order against huawei. It put the company on an entity list. That meant that anybody supplying technology to the Network Equipment maker had to go get licenses. Here we are today, and the Commerce Department is taking the next step. Decidede gone ahead and that any software and technology that huawei would use in making its ships is going to be restricted as well. So now you have this report in response out of the global times, a Chinese Communist party controlled newspaper, saying there is going to be retaliation that Companies Like apple and Cisco Systems and boeing are going to have potentially curbs put on their and qualcommhina, will not list, because of the amount of business it doesnt china. Something like have its revenue comes from greater china, which would include hong kong. That puts them in a similar position to other chipmakers because of their dependence on the chinese markets. The idea that the Chinese Government would retaliate for the restrictions against huawei by moving against other companies in technology, especially qualcomm, that is definitely leaving a mark on the shares, and also on the Industry Group more broadly when you look at the chip equipment makers, which would be more directly affected by the restrictions that are being put in place when it comes to huawei. You can really see it in those stocks as well. We are talking about Companies Like applied materials, kla, all down in todays trading, along with qualcomm and a lot of other chipmakers. Vonnie exactly. So you have the nasdaq lagging, but what i dont understand is this is something very concrete. It is easy to trade this, if you like. There are obvious outcomes possible. And yet we are not seeing a huge drag on stocks today generally, whereas yesterday, we had some vague comments from the president to another network about not wanting to speak with the chinese premier, for example, and we had indices down nearly 3 . What are participants trading on these days . Dave it is any number of things. When you look at retailers, for example, we are going to have results out next week, so the retail sales figures that were frankly awful that the government reported, it kind of those to the back burner to some extent. We have certainly seen a lot of moves related to earnings or the lack of guidance Going Forward the rest of the year, given the effects of the virus. This week has been a fair amount of back and forth for sure. You look at the financials shares, they had quite a day yesterday. A real reversal from what we see in that group for some time now, especially the idea of negative Interest Rates potentially coming down the line here in the u. S. Today they have kind of fallen back, so theres a lot of backandforth going on, and a lot of company specific, industryspecific, if only because the Bigger Picture is kind of bad at this point. A lot of the economy is in poor shape, and a lot of companies are, too. Possibilityhere a that that narrative shifts gears . Dave well, if anybody can figure out what the path of the virus was going to be and the effects of the virus, you can answer that question. That is the great unknown at this point. Is it going to subside as some of the more optimistic sort of folks, including President Trump, would suggest . Or is it going to be a bigger issue later in the year, to the extent that restrictions are being eased at this point, that they are going to have to be tightened again . If you come back to the worst Case Scenario or some thing like it, the stayathome type of stocks, the food companies, the zoom videos of the world, you would think they would do well, but it really comes down to how things unfold with the virus. Vonnie exactly. Bloombergs dave wilson, thank you. He has his own code if you have a bloomberg. Isll ahead, staying at home reshaped the advertising market. We will speak about that with the ceo of bbdo. This is bloomberg. Live from new york, im vonnie quinn. This is bloomberg markets. Lets check in now on the first word news. Heres ritika gupta. Ritika House Speaker nancy pelosi going ahead with a vote today on a 3 trillion democratic only virus relief bill. The measure has no chance of getting signed into law, but pelosi is counting on generating public support. It would aid to states and individuals. That could force Senate Republicans into another round of stimulus. China is denying it tried to cover up details of the coronavirus outbreak. Beijing says it did not know until january 19 how infectious the new disease was. China says it released that information the next day. The chinese face growing blame for delay in sounding the alarm about the coronavirus. That allowed people allowed people to spread it on knowingly for some time. The German Economy shrank 2. 2 in the third quarter, less than two weeks. Official lockdown hit Consumer Spending and capital investment. And in the u. K. , limited progress towards a postbrexit deal. Negotiator says criticized eu demand for u. K. Fishing borders. Next month, politicians meet to decide the way forward. 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. The coronavirus pandemic shifting platforms for advertising, while tv giants face a doubledigit plunge in the second quarter. Online advertising is growing at a record pace. For more, lets bring in Andrew Robertson, ceo of bbdo worldwide. Thank you for joining. It is only now that we can start to see the results of the coronavirus pandemic on certain industries, and you are representing the Advertising Industry to a large extent. What big picture has been the biggest and most obvious shift you have seen since, say, midmarch in the United States . Notew i think what you saw just in the u. S. , but around the world, is most advertisers immediately hit the pause button while they figured out what they should be doing. Much,vertisers are pretty without exception, preparing for what their recovery plans should be so that they are ready to hit the button when that happens. But in the meantime, some advertisers are staying out of the business, staying out of the market, and others are in. Those that are in have higher rates than before. Things like gaming brands, streaming services, and businesses that are good at ecommerce, not surprisingly. The ones that have completely disappeared, also not surprisingly, are everything that is travel related or nonessential retail. If you think of how much advertising you would normally see for movie launches and because it is is very hard for people to go and shop, although there is a lot of evidence that there is pentup demand that will come back as soon as people can hit the accelerator. And then all of the other categories fall somewhere between those two extremes. Did you have a heads up on how bad this was going to be because obviously, china was experiencing this in december and january, and parts of europe were experiencing it january and february . How were you prepared by the time it hit the United States . I would say there was an advantage because we were able to see what was happening both to Consumer Behavior and client rolling west as the virus did. Thing is howrtant we can make consumers feel, so understanding what consumers are feeling in this process is the most important thing. That we had a head start on because we were able to look at china, first of all, and see how that was replicated as he moved across the world, and in essence, what that means is people feel completely under siege. When you are under siege, all you can think about is the here and now. You cant really think more than day or two into the future, and you cant even think backwards. If you ask people how they felt a week ago or two weeks ago, they cant really tell you. They are feeling worried. They are failing they are feeling isolated, and they feel like they cant do anything. For advertisers, if you can find a way to make them feel reassured rather than worried, make them feel connected rather than isolated, to give them something that can actually do because they can feel empowered, that is a very positive thing to do, and people will remember how that felt. From the likes of chrysler and gillette, major multinationals across the industry spectrum, how are you looking at their budgeting for the next couple of quarters . Are they being upfront . If we see no second wave, then we will be back up to 100 . Arketing budget, only a 50 are they giving you figures . Andrew everybody is basically putting plans together. The thing that nobody knows is when you are going to hit the accelerator. Many advertisers have got campaigns running at the moment because they recognize that they can get credit from consumers for the actions they are taking, from the way they are talking. So there is a fair amount going on now. But in terms of the covering seeingovery plan, we are pretty aggressive plans, but what nobody knows is when they , because to be active we dont know when things are going to return. Vonnie how many layoffs will be permanent . There is around of layoffs coming, im sure. I dont know what the number is. Everybody will approach this in a different way. When you run a business, one layoff is one too many, but everybody has to adjust their businesses to what we think is coming, both in terms of capacity, but also in terms of capability. What are the focus areas in terms of skills and talents that are going to be particularly valuable as we look forward . So there will be some significant adjustments. To covid19t friendly advertising, if that is possible. Have you done that for some brands . What have they asked you to do . Andrew we have done a lot. In some cases, if you can make people feel like they are connected when they feel isolated, that shift is a feeling that will stick with them. They will take that positive feeling into the future and remember it next time they are shopping. We obviously have brands like at t that is continuing to trade vigorously through covid19, and one of the things we have done their is bring back lily, who used to work in store, and in this new campaign, she is working at home. So we are delivering the messaging we need to deliver for today, and recognizing and pushing off the reality of covid. Vonnie theres obviously been no live sports either. Talk about how much that has impacted your business. Has it got into parts of your business . Andrew well, no. Obviously, theres been no sports, and the ratings have plummeted. But a lot of that audience has gone somewhere else because the biggest single driver of audience is availability to view , and ironically, one of the consequent is of this crisis is people are more available, so you have seen big increases, as you know, in news channels, kids innnels, big increases Spanish Language channels, and also some of the more interesting dynamics in things like the food network and hd tv, people just looking for somewhere else to be. That may help account for the flower shortage and the boom in banana bread. I dont know. What you have seen with specific , some of the big replay games that espn has been doing, they have done ok. And we are going to start seeing sports coming back. Nascar starts its engines again this weekend. Pga next month. Baseball is talking about july. And then the big one, the nfl in september. Vonnie good luck with the next couple of quarters, and do come back and give us some more insights soon. That is Andrew Robertson, ceo of bbdo worldwide. Coming up, how will jims be different when they how will gyms be different when they reopened . We will speak with the ceo of Planet Fitness. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. Gyms across the u. S. Have slowly begun to reopen with limited capacity and new sanitation protocols. Still, questions remain about whether customers will actually go and how the at Home Movement has affected the industry longerterm. Joining us is chris rondeau, the ceo of planus fitness. I know you of Planet Fitness. I know you are reopening some of your gyms. How are franchisees doing in general . Are any of them saying we cant ever reopen . Chris no, the franchisees have been really great to work throughout this entire process. Luckily, our Franchise System has been very sophisticated and has been with us, building our businesses out. [indiscernible] workinghas just been with us on protocols and understanding etiquette for members Going Forward to make sure things are safe and clean and ready for business. It couldnt be more exciting to get the doors open. Vonnie and obviously, some of them are better capitalized than others. Have you had to do something at hq to help them weather this process . Have they been able to send royalties your way . How is it working . Chris right now, because there is no revenue in the stores that are closed, theres no royalties right now. No one is waving the white flag. More so we just see leniency on development and requip schedules so they are not having to build a store or remodel why they are closed. It is giving the more time to get the stores reopened, focus on that, and then get back to the div element and remodels and things like that in the future. Ather this storm some, and then reopen. We are opening about 50 today, and we will have almost 400 by the end of the month. Looking forward to getting back in business. Vonnie you have about 25 of the market, which is pretty phenomenal already, but is this may be an opportunity to grab some more market share from the higher priced gyms that people wont be able to afford, very likely . Chris in the 2009 recession, we had a lot of people coming down from higher prices. Astudy was recently done and little over 15 of members were saying that they wouldnt stop working out, but they would trade down to a more affordable option, so that is great for us. That, through this virus, theres been the news about golds gym filing for bankruptcy. When he for our fitness, the struggles they are having area theres definitely been they are having. There stefan li bin some problems theres definitely ,een some problems with this and i think we are able to come out better than we went in. Vonnie if the retail space gets cheaper, that is awful an npportunity ashtead is also a that is also an opportunity for more franchising. That is further down the road, but are you looking at more real estate . Chris this has really been in our favor. Down aboutre taking 5 million square feet of real estate every year, and have the last four or five years, so we are definitely driving about 5000 workups are weak percent or. 5000 workouts per week per center. I think we can get even Better Real Estate and better prices longerterm. Vonnie exactly. Are you renegotiating anything right now . Are you renegotiating royalties with your franchisees . Are they renegotiating rent with their landlords . Chris not renegotiating royalties. With the landlords, most of them have been real accommodating, honestly. There have been read deferrals during this closure period. I believe we will probably go back to the negotiating table and this is probably going to drive better returns than previrus. Vonnie lets get back to the gym part itself. Is there a lot of inquiries about how you are going to reopen, and how various gyms are reopening already . I would imagine people would be just a little bit wary of equipment and so on, and being in a place where people are fairly close to each other. Chris we are really engaged with members throughout this whole process, from the time we closed and freezing everybodys never ship, and now to the everybodys membership, and now to the reopen process. We are really stressing good etiquette in the facilities while we go over the protocols with our staff and train them. Cleaning at our facilities. Gyms get a bad rap for being germ havens, but really, when you think about retail establishments that have readily available disinfectant solution and paper towels to wipe down anything before and after you use it, whether it is sitting in a restaurant or grabbing a doorhandle, gyms are really cleaner than most people would think. Vonnie if it is one thing that you have experience with it, it is cleaning equipment. So chris, very best of luck in navigating your way through the rest of this. Hopefully at some point, it wont even be a problem anymore. That is chris rondeau, Planet Fitness ceo. I do want to mention that larry kudlow, white house advisor, has been speaking in the last few minutes, and says a china trade deal is absolutely not falling apart. So larry kudlow throwing cold waters on the fire of this china trade spat. He does say theres lots of issues with china on transparency and around the coronavirus. He is also talking about a 50 Corporate Tax discount for Companies Moving to the United States. Theres something he just lobbed in. Lets see how that plays over the next couple of hours, and whether it is a real suggestion or just something being front around the white house. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. It is time for etf friday now. This week marks the beginning of the etf purchasing program by the fed. For more, we are joined by athan asios psarofagis. Which etfs are likely to be on the buy list . Filed a reporty yesterday, and according to that, they purchased dust over 300 million of etfs. Sure,we dont know for they are not going to disclose which ones they actually bought, we have narrowed it down to a pretty confident list of which ones we think they are going to buy. Theres ones based on the exposure they have been looking for, the size, the assets, the liquidity. Now the reality is, even though blackrock is the biggest out there, others are going to be their own. But just to avoid some of the optics, they are going to do a good job of spreading around. They will not just by their own product. Vonnie exactly. Here hundred 50 million seems like a relatively small amount. Any reason why they maybe didnt decide on potentially a larger amount . Athanasios i think theres a couple of reasons. One is the market sort of did a lot of the heavy lifting for them. When they announced they were going to do this, that was at the end of march. Lqd, onetie into that they will likely be buying, and others we have it in a fight on the list, about 20 billion has come into those funds since 300nnouncement, so million seems small, but i think the fact that they are now doing it just makes good on their word. They said they were going to do it. Now they have the facility up and running. It shows that we are actually going to be doing this. I think the other thing is theres the primary and the secondary one. They are buying etfs with the secondary facility. The primary isnt set up yet. I think by not having that set up yet, if they were making the big urges is, you could wind up getting to the same problem that we had before with some of the etf trading, and then they fall out of their purchasing programs. I think it was just smart for them to start slowly, get the ball rolling. But i think the market has done a lot of the heavy lifting. Vonnie thank you so much for joining us this morning. That is Athanasios Psarofagis of bloomberg intelligence. It is time for your Bloomberg Business flash. Fiat chrysler is in talks to get a 6. 8 Million Dollar credit line backed by the italian government. The money would be used to help the automaker get through the coronavirus crisis. Fiat chrysler burn through 5. 5 billion in the first quarter. The companys north american factories were shut down. Southwest airlines is looking for volunteers to leave their jobs. It is trying to reduce expenses and avoid the first forced job cuts in its 49 year history. About 21 of southwest employees have already offered to take some sort of time off or accept a partial pay plan. The u. K. Is preparing to allow professional soccer matches to resume next month. That will allow the English Premier League to complete season that was suspended in march. The government signaled that soccer clubs must make free televised matches more widely available. We will be speaking about the bundesliga and a little bit, so stay tuned. Next hour, we will also be with theexclusively ceo of. You dont want to miss that. Lets check where we are markets wise. We got that surprising confidence data this morning, but dire retail sales data and warnings to china from President Trump. That hasnt stocks lower. The nasdaq down about, the s p 500 down 0. 8 sent. The european close is next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy johnson is off today in london. We are counting you down to the european close on bloomberg markets. Lets check those european markets now because we are looking to close out the week on a negative note. Lets take a look at where indices stand. We have turned around, and fact. The stoxx 600 is now up 0. 6 , the dax in germany up 1. 2 percent, and the ftse 100 is up 1. 3 . It is a friday turnaround, a little surprising because we got negative economic news, which really, we were anticipating out of germany. There are plenty of stocks lower, and giving back gains, like to gains that 3i group made yesterday. The ftse 100 down earlier, now up higher by 1. 25 . You have the british pound weaker versus the u. S. Dollar. Here in the u. S. , it is still firmly down. We are being led lower by the nasdaq, pricing and that chips decline thanks to the