Breaks on future higher call volumes offset by lower revenues. Helping the german telco beat expectations an insurance warns casualty claims to top the year the underlying performance, wed be talking about a strong delivery but of course, the conversation will be dominated by the impact of the virus that will have impact and growth for the remainder of the year. A down but not out. Second quarter Global Oil Demand well speak with the executive director on this show. Lets dive in to that oil report that is just crossing the latest is that all demand is set for a record fall in 2020. Probably no surprise to our viewers out there. It has trimmed the forecast for the drop citing the easing in drop down measures that has trimmed estimates by 690,000. The report that 2. 8 billion people will be living in confinement through may. Down from 4 billion in april the iea trimming its forecast and citing the ability in some European Countries and the United States. Uncertainties remain the biggest whether they can ease the lockdown measures. A couple of other quick lines of what we are seeing on the q 2 global refinery runs run 4. 4 Million Barrels a day. The peak decline is shifting from april to may. So an adjustment there well dive into the detailed report for more in depth look at the agencys monthly report coming your way at 10 45 cet. Be sure to draw in looking to potential lockdowns lets take a look at the market. About one hour into the day here what we are witnessing with even more red, it was weak first up out of the starting position weve added to that red. We are down 1. 4 on the benchmark. What we have witnessed in that red ink now as we saw fresh concerns about the emerging of lockdowns through germany, south korea and china in wuhan looking to whether the fed will be moved to further stimulus jay powell dismissing the idea of negative rates but more cause for stimulus as the democrats put forward the 3 trillion deal that republicans are not at this stage signing up for getting to the individual markets. You can see 1. 8 down. It was one of the brighter areas that the weakness and pound had a prop only down a percent before we opened this morning. We have to add these losses on top. Weve given up a fair amount of territory across the last sessions French Market down 1. 25 it is a poor showing at the start of the session u. S. Futures starting out the future a mixed picture for the dow jones in the red what we saw yesterday in lock step across the bore as these markets reverse down the board and even nasdaq where investors have declined to that market down a second straight session lets get to the latest from the fed. Jay powell said the corona cry sustain has led to a down turn risk the stimulus measures will likely be required to mitigate the fall out in days, the fed funds will mitigate rates saying the central bank has a good tool kit. The effectiveness is very mixed. There are research that says theyve been effective there are plenty of doubters the issue really is the concern over interrupting the intermediation process and the reducing of availability of credit in the economy. It is an unsettled area i would call it. President trump has again criticized the feds reluctance to use negative rates but did praise powells actions. The chairman has done a pretty good job. Ive been critical in many ways, i call him my m. I. P. , the most improved player did you ever get one of those playing baseball, cory certainly not the chairman, hes my mip right now. I disagree with him on one thing and thats negative rates. Cleveland fed president told cnbc that two starkly different scenarios were possible saying a recovery is likely as a much more dire outcome. We could see as activity starts to pick up some improvement over the second half of the year but the at the end of the year, we may see that come down. Unemployment may come down but still be in the double digits or high Single Digits it may be in place to happen almost equally outcome is more dire than that well hear more from top fed officials. In minneapolis, atlanta and dallas fed president s. What we have seen across the markets, clearly investors concerned. One interpretation made is the banks taking out certain protection they are expecting to see over the course of this crisis the refusal to get negative rates. Weve seen the experiment in europe not been positive or encouraged. Not encouraged to lend out anymore. Perhaps it is the right move to say it is not going to happen at this stage you make very, very important points the damage done to Net Interest Income to Financial Institutions who are dealing with negative rates are enormous on the balance sheet. How many times are you and i talking about Amazing Companies out there raising money at zero anyway what difference would it make for companys ability to raise and invest capital not a lot, i would suggest what it would do is damage the banking model. You cant really add this and say, lets go through this sector by sector banks could be hugely damaged. Negative Interest Rates would only make this worse one thing that is very interesting is the shut ins as mentioned on page 14 to 16 of his report are quite extraordinary in dakota, eagle ford and across the u. S. That is another sector struggling we have the banks, the energy, autos, airlines, travel stocks, discretionary as well. A whole host of companies are struggling i take it on board that tech is doing well some parts of pharma are doing well why would you damage one sector that was such a problem with that capital and make that position so much worse by creating negative rates. There isnt a problem in the Financial Sector per se. Why would you create one i want to bring up jobs weve been watching initial claims in weeks and weeks. 2. 7 million to be expected to file for those that would be expected to file up to 2. 5 million claims that began in the United States around march slightly different in europe, there was this scheme in the United States that you would get a top up of the amount of money you might receive. People might be receiving more money now than they would have in the work force. What does this mean did you know the track . Unless that cash does come back, it is not going to be saved or spent. How do you feel about it karen, if you lose a job, you lose activity. What the state is doing here in the united kingdom, incredibly genero generous furlough scheme what you saw 10 years ago and you are seeing similar schemes in germany and elsewhere you are seeing a bet all over europe that actually we can weather this storm by keeping people in some sort of life support furlough and then those jobs dont have to be recreated and we can earn tax and revenue to pay back the state. If you dont have the same situation, it is a lot harder to have such a furl oough scheme. It can recreate those jobs quickly. But sobering numbers thats devastating thank you well talk about that later in the show including that oil report i want to take you to a couple of stocks now. Very much on the radar a bounce of 6 beating expectations as higher call volumes helped offset some of those store close yours backing the revenue targets. There is a demand. When it comes to the proposition, it offered some of those customers disney packages for six months for free. Of course, when you are in lockdown, more offers for broadband. Office 365 given to customers and teams. It is available to run remotely and key to get customers through the door also what i mentioned may include sprint the long awaited deal to combine sprint and tmobile actually went through on the first of april. Also gained all the approvals. This is really important on trimming expenses on the 5g roll out. We had an update on that company roll out that was unchanged and given the forecast keeping the dividend we saw push back from the u. S. On huawei and the use of those products in the supply chain this is one company that very much depends on the use of huawei saying if you want to construct tiles by the end of the year, they need to use huawei supplies rwe says it posted a 19 rise in First Quarter ebitda they confirmed they will pay out dividends for 2019 and 2020. Well speak to the cfo in an interview at 14 00 cet moving on to autos, it is a weak picture for these stocks. Chrysler and peugeot scrapped their 2019 pay out as they were hit by slumping consumer demand. In a joint statement, the planned 50 50 merger remains on track and they expect to finalize that to next year requiring the approval for the fourth largest automaker thyssenkrupp is one stock weve been watching. It is down 2. 8 . Talks to combine the submarine and ship unit. The troubled German Industrial Company is exploring different options including a merger the tie up would create a champion in the space with sales of more than 3 billion euros plenty coming up including conversation with the director general as the group Warns Airlines will feel the impact of the coronavirus outbreak for years to come. Well be back shortly. Jimmys gotten used to his whole room smelling like sweaty odors. Yup, hes gone noseblind. He thinks it smells fine, but his mom smells this. Luckily for all your hardtowash fabrics. Theres febreze fabric refresher. Febreze doesnt just mask, it eliminates odors youve. 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Get the connectivity your business needs. Call today. Comcast business. Airbus comments it will cut 10,000 jobs as it reigns in production following guidelines to help ease restrictions. Brussels requests travelers wear face masks and observe social distancing, schedule time at restaurants and pools. Booking slots in swimming pools sounds extreme but i guess anything at this point to rescue summer these are very unprecedented circumstances. The european sector is trying to reopen let me focus on the airlines for the moment this sector is particularly hit by the pandemic and lockdown according to the commission, some of the guidelines to these businesses include strengthening their vent lailation systems an that airlines should look to support electronic documents and payments and suggested that movements in the cabin should be reduced. That means less luggage and less contact with the crewmembers there is a lot of participation airlines will have to do in the coming weeks or months to allow for the Tourism Sector as a whole. There is a lot of uncertainty when it comes to Free Movement and lifting the restrictions on traveling. We dont know when youll be able to travel from one country within the eu to another there is a lot of restrictions still in the area and it imposes a lot of questions on the sector as a whole i want to leave you with a final comment on the vouchers. There is a lot of controversy on this consumers have the right to request a full refund for a previous travel package that they have paid for however certain businesses including the airlines say that they would like to be more about giving the vouchers so they can keep the cash as they struggle a lot in keeping their businesses running. Lets see what will happen in that front perhaps you can address that with our next guest. The impact will be felt for a couple of years according to the air travel association which suggestions travel will not rebound until at least 2023. Travel has dropped more than 90 . Warning the recovery may be slower if lockdowns and restrictions are extended. Joining us in the conversation, alexander, we saw this road map from europe yesterday, what do you make of the prospects of Summer Travel . We are asking the government to have a phased approach and to play again we are aiming at reopening and boosting domestic market by the end of Second Quarter and opening what we call the regional, continental market by the third quarter. And the continental in the fourth for summer, we hope we will see flights within europe coming back with i hope interesting prices some of the travel groups are desperate to get holiday can you see that from tui and ryanair. What Consumer Behavior would you anticipate over the key july and august traveling periods i think that they are expect pg us to implement a safe process and has control for passengers we are working with the government on that and will be ready for the Internation Association by the end of the month. Well be able to guarantee as usual for our industry because it is a key priority a safe travel to avoid any combination on board and the transfer from the virus from one country to another. It could be possible to fly safely and at least in europe, we hope. Then, it depends on the government decision to lift the decisions and whatever it is i want to get into those restrictions the board is closed border ie to foreigners until june it is key for europe and tui and the travel industry to reopen, to reopen travel and borders and lift travel restrictions especially, we are advocating with governments not to implement quarantine measures that would retain people for two weeks when they arrive anywhere. We think it is useless we have implemented the health with the government. It is key for the tourist industry, which is so important for many countries in europe sir, you are against quarantining dont get me wrong, i dont want to be quarantined if i travel more than the other. Yet, it is impossible to have social distancing getting on a plane, departing a plane and getting your luggage admitting social distancing on a plane is impossible. How can we not have quarantining, sir . The point is, is it possible to have an aircraft full without a risk of contamination . The answer is yes provided we provide the sanitize process for passengers just before the flight by asking for temperature control by the obligation to wear a mask. Cleaning the aircraft properly, disinfecting the aircraft properly limiting the food and limiting cabin luggage to one to avoid the disembarking and embarking process to be overcrowded. To avoid that multilayered approach, you limit the risk to something absolutely reelectricable that is not useful in this case. Sir, masks are not fool prove. Weve had the debate and know they can be beneficial masks cannot cover eyes. Masks can be contaminated. Practically, for shorthaul airlines to decontaminate, clean a plane, let everybody on and off and clean the bathroom, it is impossible to keep a clean space on a plane we know the proximities. We are all extensive travelers we know how congested the space is keeping one and a half to two meters apart even with or without a mask on. We know it is impossible no. Not exactly. For two reasons. In a plane, the vent lags and airconditioning is pretty safe. Very safe. The air is filtered by antivirus filters and comes from the outside, which you have no virus you have no risk through the air flow system. Secondly, you are seated in front or back of another seat and not facing another passenger, so there is reduced risk of receiving droplets, which is, as you know, one of the Main Elements for contamination. Third, if you wear a mask you limit further the risk of being contaminated if you have the control of the Health Declaration before, we think we have made some studies on board that demonstrate the risk of contamination is absolutely minimal, even when you dont have special equipment. If you have special equipment, special control, special cleaning, you reduce risk, which is never easy but will be negliable. That is our strong conviction based on studies and equipments they are using and even more important that safety is the key priority for this business and this industry. It has always been and will always be. I want to get to some of the w. H. O. Virus that we may have to live with it given the lack of guarantee on a vaccine what does it mean because of the ordering intentions of some airlines being Energy Efficient and so large. What does it mean in terms of the type of aircraft and configurations over the next few years . It is a bitterly to say that it will have an impact on the continuation of the aircraft on the borders and the next two to three years, you will see reduction of new aircraft orders because the demand is too low. A large portion of aircraft are grounded so we dont need new ones in terms of seeing a different configuration, it will depend on how we are going to identify or implement some control and Health Control processes for passengers in the future, if we are able to test everybody in appropriate ways with saliva tests, fast tests and enough tests to be able to test everyone, the problem with contamination on board and transmission of virus will be reduced. Thank you for giving us your time the director general of iata with us. Coming up, john neal from lloyds joins us after the break. We could never do what they do. But what we can do it be a partner that never quits. Verizon is the most Reliable Network in america. Built for interoperability and puts First Responders first, giving their calls priority, 24 7. We do what we do best so they can too. Welcome to street signs. These are your headlines european stocks join the global decline. Fed chair says they are not considering negative rates it may not be the final chapter given the path ahead is highly uncertain and subject to significant down side risks. Using a joint statement to state reduction in demand. A stable connection in deutsc Deutsche Telecom helping the german telco beat expectations german insurance warns casualty claims could top 750 billion but the fall outremains a 2020 event we are talking about strong delivery on the targets. For obvious reasons, the conversation will be dominated by the impact of the virus that will impact the growth the remainder of the year. Down but not out reporting an upward projection for the Second Quarter but amid a massive drop well speak to the executive director later in the show i want to take you to some of the Market Action weve been watching in europe it has been a weak start and if anything, accelerating to more red ink. Weve cleared under that 5,800 level. It is a rough day for uk stocks that has been one of the better performers this week 1. 5 down for the german stocks. 1. 8 extent of losses in france and contained in the italian market in terms of stocks, Zurich Insurance expects casualty claims to rise this year after taking a 280 million hit. Expecting the impact to be, quote, a 2020 earning event and the gross written premiums up 7 than before. Telling cnbc the performance remains strong and added that the virus would hinder growth. Weve been talking about strong delivery. Because of obvious reasons, the conversation would be dominated. That will have impact and growth for the remainder of the year. We expect to see rate continue to improve and the profitability will continue to rise given the challenge of capacity. The economic circumstance will have an impact on business driven by activity we are expecting well see overall premium volume to be flat to slightly down overall. Lloyds of london has predicted losses over the Insurance Industry indicating the industry underwriting will reach 107 billion. This will be on par with some of the largest modern day cat astro if i like 9 11 terrorist attacks and storms of 2005 and 2017. Insurers are likely to suffer plunge in the value of their investments bringing the industry losses to over 200 billion. Lets bring in john neal i want to get into the damage at this stage as you tally up the estimates, i notice it is with a lot of things some of the other factors. Give us a sense of how bad this is for insurance businesses . This is all over the world. We are trying to put a lens on what we think the impact of the pandemic will be globally. It is so far reaching. The loss of life is devastating and the Economic Impact is mind boggling at the moment the claims really come in three areas. There is the immediate impact, the follow up for recession and the impact of less activity. Well create less activity for insurers well see inflation come back and that will have an impact as well that factors together for us a claims bill north of 100 billion as a result of the virus. The industry is pretty good at assessing risk. That is the risk of the second lockdown weve seen a risk emerging from lockdown weve said today our estimates of claims up 4. 3 billion through the 30th of june if there is any repeat, that would add to that bill i dont know well really know the full cost of covid19 for maybe up to two years. Sir, the industry has been criticized in recent weeks around the stance of disruption policies adding that a pandemic was not included in most of the policies that businesses under took customers are arguing that they should be paid out in the event of Business Interruption because of coronavirus can you weigh in on where this debate is going and how this will play out . Let me try to answer it it is not classically the type of insurance that lloyds is involved in. I would be suggesting to those customers and i understand their pain and challenge is that in every instance, they will have taken professional advice when they bought their cover and engaged with a broker. They need to go back and understand what they bought, why they bought something differently and take the conversation from there. That would be the best advice i could give them. In terms of looking ahead do you think there will be more looking ahead and looking forward. We reduced a paper today in some thinking and ideas around what we might be able to do to help more about the strain and stress at a time more there are over 70 trials taking place as we speak up to the idea of saying how do we solve the second wave and what structures do we put into help. I think it is really important we try to look short, medium and long term to fix the challenges that we all couldnt have possibly foreseen to the fource of this nature offering after the event coverage, which is extraordinary. You dont have the coverage for say flooding and it happens. How on earth does this work when youve already been hit by the crisis there is no way any industry copay for those claims and hence the government steps in. We create very long term annuity structure for nonlife insurance so that people buy a 10, 15 or 20 year cover against the pandemic the insurer will take that risk knowing likely theyll take that money in year one or two knowing over time theyll take the cost of that claim. John, thank you for joining us today the ceo of lloyds of london coming up, the iea warns and revises the Second Quarter demand well speak to the executive director coming up next. Jimmys gotten used to his whole room smelling like sweaty odors. Yup, hes gone noseblind. He thinks it smells fine, but his mom smells this. Luckily for all your hardtowash fabrics. Theres febreze fabric refresher. Febreze doesnt just mask, it eliminates odors youve. Gone noseblind to. And try Febreze Unstopables for fabric. With up to twice the fresh scent power, youll want to try it. Again and again and maybe just one more time. Indulge in irresistible freshness. Febreze unstopables. Breathe happy. So were working 24 7 toected maintain a Reliable Network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. On the data front today. Arriving by another 2. 5 million pushing claims to the last eight weeks to 36 million. The weekly increase would be down and a peak of almost 7 million at the start of march. The limit to coming on at this stage. The market is overvalued the manager says they are down to a session low as the highly followed billionaire investor said stocks could fall from these levels caller definitely down from yesterday. I would say that 99 was more overvalued, 99 and 2000. I would say it is an overvalued market the question has there been differential owe indications on the markets. You are seeing pockets of that in the stock market. The market is by anybodys standards pretty full. The bottom it is in is probably the situation remains if we are just dealing with the virus and there is no other issue coming up the National Energy agency says the Second Quarter is higher than expected and warns the yearonyear drop and joining us on the conversation i want to ask you about what we are seeing on the demand picture. First the draw down on industry and now your report. How encouraged should that be . Caller after the socalled black april, we see early signs of a gradual rebalancing of Global Oil Markets why we have a slightly more optimistic or less optimistic outlook with this report is for three reasons. One, demands we see signs of recovery wit the easing of a lockdown measures around the world, especially load transportation and chemical sector giving life to oil demand. Our oil demand expectations still negative but we revise from 9. 3 Million Barrels decline from less a report from 8. 6. Second, opec countries are in a good position continuing with production cuts. Announcing initial cuts. This is the second reason. Third and in my view, why we are expecting a gradual move from markets is from the nonopec producers in the United States we see the Market Forces react to the stronger prices we expect the Oil Production with decline about 2. 8 Million Barrels per day. This will be the largest reduction from Oil Producers from canada and others we put together that time of life gives us the message that we are seeing early signs of a gradual rebalancing of global markets. Doctor, you and i have talks about the lack of infrastructure in u. S. Shale. Thats where i wanted to go. You said it was the most important point. On page 16, you talked about acceleration of u. S. Production way faster than expected has u. S. Shale been dealt a mortgageal blow given the position it was in before this crisis thank you, very much, steve you are right. Shale gets a big hit it will be a big decline in the United States. Biggest of all the countries we are talking about. This is mainly shale gets the hit. Having said that, i think after some comment where we are seeing the shale where i do not agree with it. The prices go back to a gradual recovery in my view. Far too early for the shale oil in the United States we all saw something we never thought we would see in our lifetime that is a minus 37 plus expiry of the main contract we have a june contract. Can what we saw in may from that expiry can it happen ever again that is only a few days. It may be echoed in the first month of the history of the oil industry seeing those signs of recovery in the oil demand. Production cuts coming from the oil demand and in advance to the u. S. And others would be a risk of seeing the prices much less than we have in april, i would say. Weve spoken in the past, given what you are seeing and the energy transmission. Do you want to revisit the role you think oil will be playing in the next 10 to 20 years . Of course we will revisit the oil on all the parts of the sector. That will be a very different system in the next years to come having said that that after the crisis we will not need oil anymore, that is something i do not agree. We will need oil maybe less in the energy transfer, for cars and aviation. We have discussed a lot in the past in the chemical sector today. It is a critical sector. The oil market did not decline significantly. Why . Because we are seeing that they are able to produce the equipment for the Health Sector and in this product packaging that i will need oil for years to come but to the level of the demand is something we all need to look very carefully thank you for joining us. Executive director of the iea. We picked up on brent to the tune of 2. 9 it was 3. 1 higher on wti. A bit of a bounce out there. A draw down on imagery in the states this report helping us to the trade in the industry. Coming your way later on including the data on initial claims in the states stay tuned for more coming your way on worldwide exchange. Thanks for watching. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. It is 5 00 in boston markets on edge over new concerns about getting the American Economy going again those worries coming off jay powells dire outlook on the road ahead and what hes saying about the prospects for negative Interest Rates send in the czar a former pharmaceutical executive and work on the vaccine. The future of work and
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