You have to say the banks now have a difficult situation on the one hand, they are asked to come forward with loans to enterprises in difficulties. On the other hand, they have to do their Due Diligence wirecard plunges to the bottom of the stoxx 600 as the German Payment Company becomes the first dchl ever to file for insolvency im not going to use any of the alphabet soup we hear about. Vw, nike whatever the recovery is going to be a complicated matter adds that the world has crossed the lowest point of the crisis Government Council member says central bank has taken the right action. Happy friday, this is how we are now shaping up across the market as we move across the session. An hour transpired a risk at the start and a little give back throughout the trading day. Green has given evidence on the screen close to. 07 we are looking at right now. A bit of a volatile week investors doing repositioning for the quarter and end of the first half after this recovery trade that has splashed up on the boards playing the export of market or germany, the trade has been incredibly strong there. The other big trade weve seen has been that the fear around coronavirus clusters whether it is showing a second wave with more lockdowns it is unclear whether well see a lockdown like we saw in march and april. It has been a bit of a lagarde as were the german and french markets. A little catch up, german stocks up a half a percent. The stock market a little bit back more than dout 04 firmer across the board. Repositioning on the board too weve been closely analyzing the implications with dividends and buy backs caution to real estate and Health Insurance versus some of those gains and technology. Industrial rallying and youve got a decent trade in media stocks one of those areas hit by the slump in advertising weve seen a lot of bail outs in the return to the market easy jet tapped the market lufthansa agreed with the major share holder stepping aside to clear and allow into the german carrier. Of course Air France Klm now with all sorts of strings and consideration. Not holding on to some of the early gains. Up close to 6 now 4. 2 hard to hold on to the extra Green Holding on to the boards drilling down quickly at the start of the shift we were in the green and in the Stocks Deutsche Bank in particular and now selling up 2 plus percent hsbc, two patches of green now i think it was up 2 at the start. That was significant turn around could see significant losses in the down turn caused by the dividend pandemic. Share buy backs will be suspended until the Fourth Quarter. They need to resubmit the payout plans. Shares in those major u. S. Banks stocks fell in after hour trading and led the major averages higher. Here is a look at how they stand in after hour trade. Bank of america, lerl lynch. Ecm government told cnbc that the banks had a tougher job. The issue of the stress test on the part of the discussion of the last two days. The first result was put on the table and from that perspective, im pretty confident that the stress testing is done well and that it will cover issues if they were to merge but one has to say that banks now a days have a difficult situation. On the one hand, they are asked to come forward to the loans to enterprises in difficulties. On the other hand, they have to do their Due Diligence that they support the wrong enterprises and this has to be taken into account into the stress testing. Before the stressing of the banker, what is necessary is to stress the enterprises where they are in their capacity to overcome the crisis and help with the banking system. In this number, the way that the bank is one of those members doing those innovations. As you have been modelling no doubt in vienna. The emerge yens of this risis, to what extent is it following your play book or is it worse or better than you imagined at the moment, we see banks are very well put into position to help the enterprises and the answer what needs to be seen is that this is perhaps not the end of the crisis someone has to be sure the financing is there this requires special Due Diligence at the level of the enterprises or the sides of the banks that are demanding well vested and not misused joining us now, dritor of federated. Can i ask you what we saw in this stress test to me, it looked like a distinct shift. We hearing that the banks provided all of these provisions that maybe could be written down the track. What we are hearing from the fed is that they may need to dig even deeper. That is correct i thi i think the projecting lasted. It was a number of things there. On the comment for 30 billion that has been considering the fact that this crisis is not only confined to a few sector but has range for more business it is not surprising that the fed is asking about a bit of reprieve in the point of the buy backs. Because of the result increasing in the short to medium term. When it comes to the share buy backs, it seems to be the way the money buys back from investors. That has been the important number we all know this kind of mechanism we know this is a difficult situation and the time we are living in from the preferred shares. I that is more of a dramatic way to approach things as opposed to a regular lator on the world many wonder or might guess when the buy backs will be resumed. Mft banks will have to make corporate paperwork. Do you think well see a little light in the Fourth Quarter as a result of those buy backs. If you look, i think the 144 billion is quite huge. The americans now involved in Consumer Finance as their american peers if they stabilize and come back now, then maybe it is not completely out share buy backs will be more through 2021 can we pick through some of the names . Wells fargo was given back the dividend the difference which were hard hit in the crisis scenarios. What did you make of those three and how they fared as you pointed out, for obvious reason because it has been in that part for the past say two years citigroup was always here and there with potential to add in capital. Considering they are exposed to credit cards on the area weakness i think number one goldman. It is a little surprising. It is the kbi indication of the trading and the most difficult ushape type of scenario not also well as the banks like jp morgan, bank of america or citigroup. Weve spoken about how strong the stress tests are there has been some criticism from the man who oversaw the banking. He was concerned that these reflect a substantial erosion. He thought the fed really didnt recall i operate the test to incorporate to coronavirus taking on the hit. What do you make of that do you think the stress test did not go far enough this year. The current market or situation is almost a daily stress test. I think the assumption just to use for the d and w shaped recovery is severe 19. 5 Unemployment Rate in the United States is seen the last 25 years that is quite significant. The banks involved in this is not like just marginal for them. Not completely shared for this stress test to be lighter than this Previous Year the value added in the stress test that the cloers brings. Well see how it turns that is a lot of data from the potential modelling the way forward for the banks from here. Im curious what the stress tests mean for the banks in recent years, those have meant the expand of the market share. They have to wind down certain businesses what happens from here what do we clean in terms of the trade from those european banks . That is quite interesting the likes of jp morgan and bank of america, their plan to grow in europe and in the Cash Management business. We know every time the crisis strike, typically a bank typically in the whole market. Potentially in the short to midterm, some of the low to midterm banks, since it is the likes of jp morgan and some of the european expansion plan. When they pick it up again, i think they will be from the last year, they could be as competitive as they expect thank you for being with us today. We mentioned the alphabet soup the ecb president lagarde says the Global Economy has likely passed the lowest level of the crisis adding that the outlook remains certain. Sharpest, deepest recession we are probably past the lowest point muching towards recovery, im not going to move towards the alphabet soup, vw, u, v, l, nike i would characterize it as seek wental and constrains. And coming up more on the klm bailout. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. All of these are face masks. This looks like a bottle of vodka. But when we first got these, we were like whoa [laughing] my threeyearold, when we get a box delivered, screams mommys work mommys work. With this pandemic, safety is even more important to make sure we go home safe every single day. Safety is even more important to make sure we go home 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. The butch government has committed 3. 4 billion euros. Includes guarantees and the 1 billion euro loan. Watching this and it does come at an important time in the week this closes the gap on the air transklm package. You are right weve been waiting on the package there. That part has been green lighted by the commission this morning the dutch government confirming this 3. 4 billion package the french government has about a 14 stake in the airlines. If you remember, they said it is not a blank check. One of the conditions was a transition to a cleaner airline and less carbon emission as part of that, we know air france will have to reduce the domestic routes. They are looking at any route that can be done 2. 5 hours by train will have to go by air france and will stop other Airlines Taking on those also the grounding of the a 380 planes. Finally, a more efficient fleet. Theyve already taken possession of the airbus. The industry also received support from the government. That will take on the place to be more fuel efficient we heard from the dutch financeman this morning saying given the aid received, they will have to cut the co 2 emissions by half by 2030. This package comes from some Strings Attached the next battle comes with potential job cuts there are some reports that could come between 8,000 to 10,000 job cuts in july. About 15 to 20 of the work force. 1. 2 billion euros lost this aid package coming this morning sending shares higher on the market on the back of heavy losses here. Close to 60 pes on the year. Karen. A trick dwy question for you clearly borders coming up. What are we seeing in a scenario like this. You are right, it has been a wait and see there hasnt been a flair up like other countries schools have reopened. They are waiting to watch what happens next that could be replaced by trains that are are more efficient there. The activity has come back leaving paris. Activities coming back they dont see activity coming back at least two years. As you say the unknown is thele second announcing. Lets push on the latest that will be closed to the 9 billion bailout package. 90 of investors backed the proposal that will see the 20 stake. That was a point of contention the german Financial Plan in the bailout and will not prove a burden to taxpayers. Translator this is very, very good news good news for the company itself, lufthansa employees and germany as a Business Location with the financial aid, the government is stabilizing a Large Company that was in Perfect Health and fallen into severe turbulence. Wirecard has filed for insolvency and said it can no longer ensure its survival the auditor has admitted the 1. 9 billion is likely a part of an elaborate fraud clearly the shock yesterday, all of us trying to digest that. The huge swings in the share price. Caller thats clearly the fact that has come next week will be the pay raise for the salaries what is next is the growing part of the companies in the concern and which is not having a look at how reliable the companies will be and that those will be written down completely those will not have many money left as those will never have existed reporting that twothirds of the revenue as they were putting it was a big fraud. The auditor has been interesting because of these statements for many years. The financial watch dog in germany is under skrcrutiny and has to improve to germany. Coming up on the show, Food Delivery Services have been thriving well talk to one food delivery ceo next on the show this is the tempurpedic breeze. And its mission is to make sleep. Feel. Cool. So, no more night sweats. No more nocturnal baking, or polar ice cap airconditioner mode. Because the tempurpedic breeze delivers superior cooling from cover to core. Helping you sleep cool, all night long. During the tempurpedic summer of sleep, save 500 on all tempurbreeze mattresses. And experience your coolest sleep this summer, on our best breeze savings of the year. Welcome to street signs. These are your headlines european stocks rise building on wall street gains. After the dutch government backs the bail out of Air France Klm with 3. 4 billion in aid. The banks following the latest round of stress tests. The Financial Sector is in a tough spot one has to say that banks now a days have a difficult situation on the one hand they are asked to come forward for loans to enterprises in difficulties on the other hand, they have to do their Due Diligence from boom to bust, wire card becomes the first dax member ever to file for insolvency. Im not going to use any of the alphabet soup numbers we hear you know, vw, u, v, l, nike. The recovery is going to be a complicated matter saying a lot of uncertainty but adds that the world has passpast the lowest point of the crisis lets take another quick check. Trading up by 18 . Modest gains for the dax about a quarter a percent. Almost. 06 on the market given back a little territory on the start. It has been a volatile trading week we are minimizing the losses on the trading week we lost about 1. 5 of trade this morning. This does minimize some of that. U. S. Futures baring again. You can see the red on the board for the futures. And crossing lock step, no resilience in tech stocks as we count down to the session. Yesterday, we had gains of more than 1 as they wrapped up the trading day. Black rock Ceo Larry Fink has warned the u. S. Economy will require more stimulus if rising cases force the government into a second lockdown. I think the market is probably a little ahead of itself at this time because i still believe we are witnessing real tragedies in the small and medium businesses. If we have to go back to more Compassionate Society and more lockdowns, then it will require larger fiscal stimulus in just a few months, the pandemic has reshaped the restaurant sector as businesses have shut their doors and switched to a delivery model expanding fine dining Delivery Service super hiring several new eateries since march founder of super, great to have you on today. You can see many of those motorcyclists zipping across town how different is your Business Model because it does tackle the high end which has been very hard hit by this crisis. Good morning. Basically, we concentrate on quality and service. We are not a quick Delivery Service. Since the beginning, we focused on on the delivery more than the tech or the tech side. We want to put in process something the restaurants are happy with and ultimately the customer gets a better experience on the other end. We do have by having our own vehicles and we employ the drivers directly one on the list is a restaurant known for dumplings getting into what this means on the price tag. You spend a lot more on these highend orders. Is it just a special occasion on a friday or saturday night when people would have gone out or more frequent . Certainly not we are seeing a prepeat customer over a blended range around 2. 9 times a month at the moment. That is one but weve added a slew of great restaurants. Novu, scotts the list of whos who of restaurants in london right now because the demand has always been there sinci since the beginning when i came up with the idea it was because people would want these kind of restaurants delivered at home. The pandemic has pushed this forward. Nobody has a choice. The idea has always been there weve been there five years. Can i ask you what that means on the quality side. I think some customers are looking at opening a pizy and it being soggy there. How much is the cost for your business to maintain quality the process is a lot more expensive. When you have your own bikes a lot of these other companies dont own anything they are pure Tech Companies or try to bill themselves as. Owning the bike, creating all the elements that go into the bike to keep hot and cold. All the tests you have to do for the restaurants to ensure that they are happy those things take time and effort premium style processes take more time. This isnt just a guy on a bicycle with a rack sack that sloshes your food around you have to ensure quality time after time the reason service has been so successful is because weve been able to offer that not only to the restaurant but to the customer weve seen our revenue go uch like 10 times since february the head count in the office has tripled. Where the restaurants had their concerns, it is the customer that dictated how we do it we follow a lot of different sectors involved around covid19 the acceleration of cost as you beef up the demand in the hurdles across the uk and restaurants socially distanced the 4th of july hurdled the demand and some researchers come up with a vaccine, are you concerned youll see a hit in the short to medium term i think it is great restaurants are coming back. We are partners after all. We champion the restaurants and stand on their shoulders we Work Together when we work with a restaurant. Then coming back and people going out, thats great. In the short term, i envision people going out i dont think this is ever going to go away. It is probably 18 months away. Ive been speaking to owners and groups that have to factor in the process. This will factor in the strategy now. Nobody knows the way the winter comes. The slow down has been the season for us. When the weather cools and it gets damp. We are here with positions already working with these restaurants. If they do slow down the side. Im sure it will come back with a bank we are in a very good place weve seen very good strong sales. I dont see any reason to switch them off i dont know what it is to talk about food that just makes you hungry ive got my phone ready for lunch time thank you founder an ceo of supper continuing lines of conversation tweet us directly at street signs cnbc and im cnbckaren coming up, nike and store closures well have more when we return businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. There is breaking news now on wire card the news crossed the Management Board had decided to push ahead with the proceedings just crossing the tape now that we had seen criminal charges against two incumbent and one auditor at ernst and young around the events at wirecard. Two incumbent and one auditor at ernst and young. They continue to investigate the Fintech Company and the missing 1. 9 billion euros. The fed has put fresh restrictions on u. S. Banks after stress tests showed some lenders could impact the down turn caused by the coronavirus. The fed is limiting banks saying that for the third quarter, it is suspending the purchases cap dividends allowing them to see the base the largest banks already ended the buy backs. This takes it a step further the fed will reassess on a quarterly basis. The first time in 10 years, banks are required to resubmit the capital plans. Vice chair notes in a statement there is, quote, material uncertainty about the trajectory on the recovery and impact of not all governors agreed to let the banks take pay outs. Saying she, quote, does not support giving the green light to large banks to raise capital which raises the risk to rebuild during the recovery. The decision by the fed was the covid sensitive overlay for traditional stress tests testing under three hypothetical recessions and sub kwesequent recovery vshaped, ushaped and wshaped. Amounting to 560 billion to 750 billion climbed from 12 in 2019 to between 9. 5 to 7. 7 in the hypothetical down side they did not break out the results of the analysis on banks. The u. S. Set another single day record for coronavirus cases reporting over 39,000 new cases on thursday. The death toll rose by 2. 5,000 its likely 26 million have been fekted which represents roughly 8 of the population and more than previously anticipated. Counting down to the wall street action you can see futures are in the red. Losses are down 200 plus points in futures still indicating a little red splashing up on the boards when they resume trade this morning liverpool has secured the First League Title in 30 years after the challenge against manchester city. Thousands gathered despite calls by the team to stay at home due to coronavirus you can see the fans didnt heed those calls. Thats not a meter plus between those people must be living in the same household. Well done liverpool. Nike has reported a surprise Fourth Quarter loss due to Widespread Store Closures the 75 jump in Digital Sales was not enough to help with demand and in stores stacey, nice to see you today. A pretty strong reaction to the negative side. Talk us through what you thought the reaction was and where you thought it stood in terms of the retail environment at the moment this is against the back drop of nike flirting with an alltime high. Really, what could they tell the street to make things better the loss was bigger than expected the margin hit was over 800 basis points when you are a brand that is very dependent on the wholesale channel that stops ordering from you, you have break downs. You have to cancel orders. The really good news for nike is that china has returned to growth north america and europe seems to be moving in the right direction. When the stores open, digital didnt slow down so thats a good sign. Acceleration, we are seeing more of. 75 spike in Digital Sales i know the business tried to transition to more subscription in terms of selling sneakers on a regular model. Some of those trends are still early on what are we hearing about the push to the online channel looking to get to 30 exposure they are already there they are thinking about moving to 50 for direct. Thats the model everybody is moving toward. We dont want to be dependent on the wholesale channel. If you control your distribution, you control your message. Nike is moving towards owning its own distribution for them tharks will be eventually higher margin in the near term, it comes with some blips because they are getting an influx of returns you have to pay for shipping it will end incredibly well for nike that probably wont have to depend on amazon as Department Stores face disappears in some cases, trying a shoe on getting to the inventory model we saw 17. 4 billion worth of inventory. Which gives you a picture of a very tall tower of trainers. So their inventory was up just over 30 . Thats a big number. They have to work through that what that will look like is well see more product in the factory outlets youll get some great deals. Theyve canceled a lot of orders what you are hearing is that they are going to offer less diversity of skus. So theyll shrink the number of different styles you see will it be more of a narrow focus for a lot of brands. They are taking all the right steps and feel by the end of q 2, they can get the inventory in shape, which will be incredible considering what weve been through. Weve been through stores for some wholesale partners. There are boxes piled to the ceiling of returns youve got to work through that stuff and it takes time. I didnt see a lot of reporting. They have had a Successful Campaign around black lives matter and around Colin Kaepernick what can we tell from those sales for the quarter . Nike came out and the message was really strong for once, dont do it. They came out first and they came out strong. That builds a lot of loyalty for their brand. I think that showed up in their app downloads and premium selling. The messaging in general around covid, the you cant stop us campaign the play for the world the impactful resonating they offered their app for free. Wo workout classes. That builds huge loyalty long term before we go, not offering the complete outlook at this time clearly clouds of uncertainty. When you think about the demand fora for athleisure the spending can be a bit compressed exactly for nike, we saw a lot of premium selling. We saw a lot of full priced selling. Yes, we have the bargain seekers but the market of traffic coming back is fullprized selling traffic. Yes, if we are going to be working from home long term, it is not a mystery why there is a twohour wait to get into a l u lululemon in a mall in the u. S they started giving out a restaurantstyle buzzer. Thats where the demand is it is not changing anytime soon. It reminds me of a food court. Exactly thank you, stacey u. S. President trump said he will not shut down the country despite calls for fears of a second wave saying our economy is roaring back and we will not be shut down tracie potts is with us from washington, d. C. Talk us about that as many are concerned about the wave of infections across the states exactly we now have numbers to show that the wave of infection is growing in many areas. 33 of our 50 states are seeing an increase. Many of them like texas, florida, california, the largest states are particular hot spots for this virus the cdc now saying that we could have 10 times as many cases as the numbers even show based on the people with antibodies who may have had it and didnt know it and spread it to others President Trump selfcorrecting again saying he was joking about scaling back testing to reduce the number of cases. Testing is going away in some areas. The federal government said it will increase in others. This late surge going into the summer when people want to get out and about, when states have started to reopen business is concerning states like texas now, a very large state, is putting the pause button on reopening and have stopped that. They are asking people to literally stay inside because they are seeing such a large increase in cases. There is a core relation to where people were required to wear masks, it is going down where it was only optional, this err on the rise. Interesting around the masks we have been watching that closely here too thank you. We are counting down to the friday session on wall street. Futures have been a little weak this morning starting to improve in the last 20 minutes or so that is all for todays show im karen tso. Thank you for watching Worldwide Exchange is coming your way next. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Good morning it is 5 00 at cnbc top five 5. Futures and dow down for the second week. The fed puts new restrictions on banks nike posting a surprise quarterly loss the latest Retail Company hit hard major u. S. Airline ceos will hold a white house meeting while their labor unionsee
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