Included 75 previously announced, so the likes of avolon, for example. The stock is down about 0. 3 . We had been anticipate and we would get those numbers today. Once again, boeing lost orders aircraftf its 737 max last month as air travel plunged amid the coronavirus panda make, and of course coronavirus pandemic, and of course, lessors and the like all canceling. Elsewhere we are rallying here for the s p 500. Theres just one sector in the s p 500 lower, and that is banks. We will get to the conversation on their earnings in just a few minutes. Jp morgan and wells fargo out today. Crude oil down on was 5 again. It cant catch a break these days. The 10 year yield at 74 basis points. Guy lets talk a bit about what is happening here in europe and around the world, equity markets and the virus story. We are starting to see maybe some indications that we are seeing a plateau in the number of cases in countries across europe. We are also starting to see some countries reopen their economies, starting to ease their lockdowns. However, countries like the u. K. , france, and italy extending theirs. , headtalk to peter garnry of Equity Strategies at saxo. My question to you, is there a greater risk that we get more upside from here, or a greater risk that we retrace these recent gains . Peter i think we will retrace these gains. Risk isthe downside bigger than the upside risk at this point in time. The s p 500 and european equities are trading on sentiment of a faster recovery. Be many falsewill starts in reopening the economy. Of the earlyis one lessons we are seeing from asia. We did a study looking at these dividend futures, if you look at the expected dividends for 22 anyone, the market is pricing 23 a share, down almost when he percent from current levels. Differentk at valuation levels over the past 30 years, expected fundamentals are around 2300 and the s p 500. Clearly, the only thing if we believe markets are efficient and the s p 500 is right, but the dividend futures market is also right, the only explanation is that investors are buying the fed put and are willing to pay higher valuation multiples than we have seen in recent years because the fed is crushing yields in credit and government bonds. That might be what is explaining this rally. I just dont think it is sustainable, to be honest. Guy lets talk about what may undo it, the earnings season. Jp morgan coming out today. It is booking some pretty big provisions as a result of the virus. What are you expecting from earnings season . What kind of numbers do you think are going to be posted . In reality, given the fact that the Rearview Mirror only really kind of had a month of serious virus impact, how useful are these figures . Peter i dont read too much into the q1 numbers for Many Companies. It is the outlook that is important. If you look at jp morgan and the wells fargo earnings today, they say that they only give q2 guidance, basically. Theres no guidance for q3 or q4. I think that will be the case for Many Companies who will be flying blind, so to speak. We dont really know what is coming. J. P. Morgan chase shares started up in the early session, now down 3 during the conference call. Dimonsimon maybe comments about reopening the or what the current Market Pricing is. I am profoundly shocked to see that mastercard and American Express stocks are, last time i checked, up today because the credit provisions from j. P. Morgan chase in the credit card business and the news coming out of china in the space tells you that we are hitting a wall in this market. And to ak mastercard, lesser extent, visa, but American Express are in for a tough year, maybe two years. We look at certain trending point indicators, and we would like to be confident about this rally. We would like to see financials outperform utilities, and we are still in the basement on that spread between those two sectors. So it is not the Credit Outlook that has improved. The fed is buying credit come about the Credit Outlook hasnt improved. It is driven by online businesses that are to some extent immune from what is going on in the real economy. But i dont think we have much more like to go in the equity market. Vonnie the amount of Loan Loss Provisions we saw today out of wells fargo and jp morgan, should it be a leading indicator for us as to the health of the consumer in three to six months, or should we just read this as jamie dimon protecting his Balance Sheet for the future . Guy theres probably an element of both. A real test for the market and for earnings will be when we hit july, when we get the q2 numbers. The q1 numbers, theres still a lot of uncertainty, as you pointed out. The selloff started in february. The real toll on the european and u. S. Economy only really happened in march. I think q2 will be the real test. I think the market will be shocked to see what banks will have to set aside for credit provisions. All of the various economic forecasts for the on them limit rate in the u. S. Is looking in the range of 20 to 30 . For the Unemployment Rate in the u. S. Is looking in the range saxo to 30 i think we at are probably leaning toward some kind of hybrid between a uturn or an lshaped recovery. We are not in the positive camp on how fast things can go. But if you look at the elk ud that tracks investing great bonds the lqd that tracks Investment Grade bonds, it is on was back to the selloff. As you pointed out before we italianthe show, the yield spread is also widening. I think that is a signal in the noise from the equity market that things are really not heading up here in europe. I whether europe can survive this shock unless we go forward on the corunna bonds. So far, the germans and the dutch politicians dont really want to play ball with the italians and spain. Know fromll we Balance Sheets who will make it and who wont . Will we know from this set of earnings which companies will struggle, and even the multinationals . You mentioned several of them. Retailers, every business that is not strong in online within the consumer space will suffer. That is also what we are seeing in europe. You can see adidas has performed worse than nike. H m has done worse than some of the online businesses. That is going to be the trend. But what is very odd is if you look across the different equity factors, a lot of the quant fudns and Equity Managers that would like, and atypical environment like this, to have overweight in the quality versus the junk factor, if you look at the session yesterday and in the previous weeks, and has been the junks that have performed very well. In the u. S. Yesterday, junk was up 3 in the s p cash index was down 1 . Ont is all due to the fed thursday buying junk bonds. It is lowering the financing rates for week Balance Sheets. I think people have to be extremely careful how they play this. It is a sickly building up it is basically building up these companies and not the economy. The real economy is not really the publicly listed companies, for sure. Vonnie peter, thank you. That is peter garnry, head of equity strategy at saxo bank. Lets check markets. With a deeper dive, heres abigail doolittle. Bit mixed,rope is a but the s p 500 right now up about 2 off the highs, when it was up closer to 3 . Can see one reason why, the financials now down 0. 3 . Initial reaction to Bank Earnings was positive. Now, investors taking into account the severity of those numbers. The stoxx 600 up 0. 8 , off of its highs of 1. 4 . The banks in europe also weak, so off of the highs, but we do have gains. This is reflected in the volatility indicators you have been talking about. Take a look at the vix index in the u. S. It is below 40, the first time we have seen that in more than month. So volatility is coming off. Interesting, though, when we go across asset class, it is not risk on. We have the yen higher for a fourth day in a row. Gold had been higher, so not as much of a haven bid, but that is really fitting to the commodity complex, another group of risk assets. Those are lower. Take a look at crude oil, down about 6 . A nuanced, risk on picture. Finally, certainly risk on, amazon hitting an alltime high. Really pretty incredible. This stock up more than to any percent on the year as americans and people around the world are simply ordering supplies into their homes during this coronavirus crisis. Guy it does make you wonder whether amazon is going to have to pay its staff a little bit more at the end of this. Maybe a lot more. We will see. Coming up, we get an update on how the Aviation Industry is dealing with the coronavirus pandemic. , directorde juniac general of the International Air transport association, is joining us later today. Bloombergs is launching leadership live with david rubenstein. Ari sorensen is going to be joining us. This is bloomberg. There are very adverse consequences way beyond just the economy, and terms of mental health, domestic abuse, substance abuse, etc. Do. S a good thing to we talk about june, july, august. Vonnie jp morgan Ceo Jamie Dimon speaking all that investor call on when the u. S. Economy will reopen. Joining us with more on earnings is bloombergs sonali basak. Everyone has been obsessing about about the Loan Loss Provisions. Is that with the street is really taking account of today . Sonali these provisions are certainly significant. They are much more than what wall street was expecting. Whats worse is they may get worse in the coming quarters. This morning, the market shrugged off some of these issues because other areas of the bank were really able to shine, like trading, but you dont know how long this is going to last and how it will continue to impact not only Loan Loss Provisions, but the low Interest Rates might impact their ability to collect Interest Income on top of that. Guy we dont have much to go on at this point in time. How useful are these numbers . We had a month in which weve had an impact coming through of the virus. Jamie dimon and the rest of the team dont have much visibility on what is going forward. How rough are the estimates of the forwardlooking components, particularly when it comes to the credit side . Sonali it is better than nothing. When you have more than 8 billion, it is a significant change. You see jp morgan trying to get ahead of the issue and give wall street estimates on how bad it can really get, and not try to sugarcoat how bad it can become. You see of that said, the banks outlining their exposures across all of the different sectors. Entertainment, oil and gas, travel. That is a question. Some of this is covid related, some of it is oil related. None of the banks can really give us expectation on whether that will continue to prop up the bright spot, which was trading. Vonnie what do we end despite from these results for the rest of the banks this week . Sonali tomorrow morning, bank of america will be extraordinary telling because bank of america is also heavily weighted towards the consumer, and is very highly dependent on net Interest Income, so we will be watching to see what their income expectations are this year. Remember, wells fargo didnt tell us exactly where they will fall at the end of this year, and at jp morgan at 55 billion, they might still be above where they were two years ago. At goldman, what will be interesting is their principal investing at a time when they are building another 10 billion war chest to put towards private markets. People are looking to ramp up opportunities, but again, things have not quite evened out in this market enough for people to really dive in. Will wait going to and see. Sonali is going to give us great coverage throughout the week. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with guy johnson in london. This is the european close on bloomberg markets. The International Monetary protecting the Great Lockdown recession will be the steepest in years. Baseline is that the crisis, the epidemic, will be concentrated in the Second Quarter for most countries of the world, and containment measures will also be concentrated in the Second Quarter, and then there will be a gradual removal after that. We will start seeing initial signs of a recovery in the second half. That is what is in our baseline, but we also have more adverse scenarios. Lets talk about where you see that more pronounced. Are you seeing that being led by countries like china, like the United States . Is it a first in, first out scenario . China, of course, was the epicenter of the pandemic and was hit severely in the first quarter, so we have a very deep contraction in the first quarter. We are seeing signs of recovery, but it is not back to business as usual. Also, for chinas growth, what will matter is what is happening in the rest of the world. While containment measures are coming off in china, there are still very severe letdowns in many parts of the world, and that could be extended. Emerging markets are still at the beginning of this whole pandemic. For the Global Economy as a whole, it matters a lot what is happening everywhere in the world. But if our baseline is right, which is that most of it will be concentrated in the first half, then we should start seeing stronger recovery starting in the second half of this year. This,an environment like and for many economists struggling with the same thing, how difficult is it to throw out a forecast when youve got no real precedent right now for reopening and establishing normalization . This is really unprecedented. Usually we like to rely on Historical Data and analysis to come up with projections, but you dont really have that, it is hard to do. And usually when you have a shock, it is usually a housing crisis or bursting a financial bubble. Here, we have to rely on epidemiologists and Public Health officials to tell us how this virus will evolve, what kind of therapeutics and vaccines might come about. This is very difficult. The way we are thinking about it is we know that as long as you contain the measures as long as the containment measures are in place, some sectors are more severely hit than others. If you are a country that relies heavily on these sectors for your growth, then you will be very badly hit. But this is also a financial crisis and a commodity price collapse. For the emerging markets, the vulnerabilities are magnified, with big reversal in capital flows and currency pressures. This is a very complex set of crises to thing about. It is the latter point i want to pick up on. I dont think we have really quite understood the shock to em yet, and i dont think we have seen the wave, the way the shock wave through em and back into the Global Economy just yet. What are you expecting to see play out in emerging markets in the coming months . I see that is one very major Downside Risk to our baseline. Things could get a whole lot worse in emerging markets. We are assuming in our baseline that emerging markets will have a more Severe Health crisis then what we are seeing right now, but not at the same level as what we have seen, for instance, in the euro area or the u. S. , at least in terms of containment measures. That could change. Secondly, it is not just a health crisis. They have a big collapse in external demand. They have a big reversal in capital flows coming into their economies. If you are commodity exposed, you have a major drop in commodity prices. They are starting out with much more fragile health systems, very high debt levels. These can compound the problem. I think that is one area where the Downside Risks are severe, and why it is very important for the International Community to Pay Attention to emerging markets and low income country. Vonnie that was the imf chief economist earlier on bloomberg television. Lets check u. S. Markets because a nice been seeing rally today in all stocks, save the banks. The s p up 2 , the nasdaq up almost free percent, and the dow 1 . 1. 19. N is trading at boeing is recovering. It had dropped by as much as 2 , now down on. 6 . Still a difficult day for boeing investors once again. Guy look forward to seeing exactly what the company has to say. We had a bit of a technical issue with the dax earlier on. It is now up and functioning, and it is outperforming, up by 1. 68 . In terms of where we are seeing business today, we are seeing it in the travel and level sector where we are seeing weakness today, we are seeing it in the travel and leisure sector. In terms of where the points are being taken off, it is in the oil sector. Bp nothing ellen points off off, shell 11 points knocking 10 points off. The Health Stocks are catching a nice bid today. What we are seeing this afternoon is a widening of the spread. The btpbund we are not at the levels we saw a month ago, but it is worth paying attention to what is happening with those spreads. They are an indication of risk here in europe. Theand close is next european closes next. This is bloomberg. These days you need faster internet that does all you expect and way more. Thats xfinity xfi. Get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. Can your internet do that . Guy 30 seconds until the end of regular trading in europe this tuesday. We are back today. Eu