Will reopen the economy if it is safe. And the italy and italy and lowering in the number of cases. Manus we are getting some breaking news. We go to the heart of earning season. Single structure. Jennifer may will leave at the end of may. Numbers, First Quarter, nonir four f. They see a solid start to 2020 despite the eye of the coronavirus storm. And First Quarter results, they theyted some softness and had said there was a little bit of a dent with a significant new business having been derailed. They see a solid start to 2020 amid this covid19 crisis implying a strong rebound. In the structure at sap. We are waiting to see if any other news is coming through on their dividend. Good morning. It is all about the oil market. Nejra absolutely. 20 7 revenue increased for sap. The tech sector is going to be in focus this week. In the u. S. As well, we have the following revenue and the pulling away of the forecast for ibm. Tech has been resilient in the equity market. If that falls, we may question the recent rally. Front and center is the oil market. We had the unprecedented drop with negative prices on the wti on the may contract. We will question and dig into what happened there. Did it have to do with people long wanting to roll over to june. And it reflects what we know what is been happening in the physical market for quite a long time. If you look at the markets, we are seeing a little bit of a rebound in the may contracts so we are back in positive territory. 21. Contracts, around elsewhere, you are seeing red on the screen in terms of asian equities. Dollar strength. The kiwi underperforms. We had some comments from adrian or in terms of the monetization of debt. Around 25 a barrel. President donald trump says he will sign an executive order temporarily suspending immigration into the United States. This comes as the country tries to contain the spread of the coronavirus. In a tweet he said his decision what also protect american jobs. Thepresident has said pandemic has strengthened his desire to restrict access to the u. S. How did this announcement play into the Trump Administrations push to reopen the economy . Another restriction for the u. S. Border. One thing we dont know is the scope of who this will affect and that timeframe. We have seen more restrictions from the administration on the border with travel from china, europe, mexico, and canada. Of also using this desire the president to restrict the border. This also plays to his base. This is something the president ran on in 20 16. Cracking down on illegal immigration as well as construct a wall with mexico. At this thing time he is pushing for the u. S. To reopen. Some southern republican governors are pushing parts of their society to reopen this week. Movie theaters reopening in georgia and beaches reopening in South Carolina and florida. There are ongoing morning so that there is not enough widespread testing in the u. S. And many say we could have a second wave. A number of governors said they are not prepared to reopen because they dont feel they have the materials like slobs in order to do widespread testing. this goes to the heart of what Morgan Stanley said over the weekend. Can we talk about the oil market. Yesterday was a catastrophe for may numbers. How do we repair the damage . What do we know so far . Yesterday was an extraordinary day. What many traders told me was that this has been playing out in the physical market for quite some time. The way the president describes of a financiale situation than an oil situation. In his press conference yesterday he talked about the securities Petroleum Reserve in the u. S. He said he would Like Congress to approve this but at a minimum, they will open this up for storage. Getting that through congress will be a political battle. We have seen in other phases as with the relief package, that congress is not playing ball. The other thing potentially senator kevin cramer from north onota has pushed on tariffs saudi arabia. This is something that the administration could look at. I know bob mcnally told you in the last hour that he thinks this is where they will start first. Nejra i know youre keeping a close eye on the Texas Railroad commission. Goldman saying a violent rebalancing in u. S. Production is coming. Citigroup says if global storage loosens more quickly, wti could be chased to the bottom. The u. S. Has information that north Korean Leader kim jongun was in Critical Condition after surgery last week according to an official. Not knownt status is and the Trump Administration is seeking more details. Last weekent surgery and has now not recovered. Back at. K. , hitting criticism that there are encouraging signs the pandemic is slowing. Set to of parliament are return and at the top of the agenda, scrutinizing the response by the government to the outbreak. Israeli Prime MinisterBenjamin Netanyahu and his rival have reached a powersharing agreement bringing the country closer to emerging from political paralysis. He had previously refused to serve with netanyahu but he cited changed circumstances. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Manus . Says mayrry kudlow could turn out to be the month of transition to a better economy. Up next, we bring our interview on bringing america back to business. This is bloomberg. Manus this is bloomberg daybreak europe. I am in dubai. Nejra cehic is in london. A realitys check for the rest of the world. Imploding in the first 20 days of the month. That is knocking the asian markets. Equity futures down. Com valuations does that make sense . 2 . By over look at wti imploding yesterday on the may contract but studying around the 22 a barrel. As you can see there. The mayude that is contracts. Down 40 . 1. 45. That rebound in asian trade after the historic trade. That or they would be forced to take delivery of an actual barrel of oil. Is no place to put them. American companies are running out of storage. Collapsejawdropping the june Contract Trading above 20 a barrel but that is likely to see downward pressure in the coming weeks. There will be a violent rebalancing in the american production storage situation. That is according to Goldman Sachs. Let us take this to charleshenry monchau. We are waiting for a violent repricing and restructuring in the u. S. Market. We saw a symbiotic relationship between the demise of crude and the drop in the s p 500. That relationship giv diverged. Without a significant lift in oil . Charleshenry that is a tough question. There are many divergents. , i dontime being think it is. [indiscernible] a narrow group of stocks. It looks like investors learned the lesson of the last 10 years higheru have qe and pay levels for growth. , yesterday to oil there was some technical explanations. Real urgency there is no storage. Moving on to the june contracts. I dont see how the markets can [indiscernible] nejra exactly. That point. P made if you continue to see the challenges in storage than brent will chase wti down to the bottom. In the asian session, we are seeing falls on that crude plunge. Credit markets are responding as well. Do you think we will see brent react in a similar way to wti . And what implications will that have for your strategy, if so . You can see in offshore. Storage is it is at 70 of capacity. Brent will catch up definitely. My issue is on the iu market. The big question for the market cracks . Ll we see some of the risk, the credit risk in the United States 30 oddica, it is if percent of america has been taken out of commission, what is the credit risk as a result of the demise of shale . That ahenry we know very high proportion of the market is coming from oil and this could put pressure on the oil market. This is why they did not have a box. A backstop. Checked what happened yesterday. Further First Time Ever [indiscernible] there is a huge amount of clo s. Will see if it can backstop that segment of the market. Nejra will you bring up an interesting point. Aguest on the show did say few weeks ago that month i should do next and this was before they stepped into junk debt, he said the fed should be buying commodity futures. Should they do that next or do you see equities being next on the spectrum . Is a goodnry that point. I saw that yesterday. Some investors saying the fed should buy oil futures. We are seeing a lot of dislocation. Not just oil futures. Inc. About gold futures. I think we see an indication that the fed was successful to butt the liquidity crunch we are seeing many parts of the insecure to are too fix the financial risk issue. We cannot get fully comfortable at this stage. Monchau,arleshenry chief Investment Officer at al mal capital. With many states pushing to reopen the economy, the Trump Administration is proposing a three phased plan. Larry kudlow talks about the economic plan forward. The rulesont think were bad to begin with. There may have been some glitches here and there. I think secretary mnuchin has done a terrific job at treasury working with sba. Nothing is perfect but on the whole, judging on how fast the original 350 billion went out the door, i think it is a very good program. Mind you, we are stepping up into the mediumsized area but that is being done principally through the Federal Reserves main Street Lending facilities. Tore will be some assistance large, Important Companies that have hardships like the airlines. I think it is a pretty solid program. There are always tweaks here and there. The fact that it worked so quickly is testimony to its efficiency. Jon i agree. It acted much quicker than i thought it would. I accept that i was wrong about that. A one billion Dollar Company getting access to the Paycheck Protection Program designed for Small Businesses, we have a bit of a problem. That part of the agreement tweak things a little bit so the likes of shake shack, a 1 billion Company Listed in the u. S. Does not get access to those funds for Small Businesses . Larry i am not i have not. Ollowed the shake shack story apparently, there were some issues there. They may be able to seek financing through the Federal Reserve loan facility. I dont want to go there. There will always be tweaks. We are trying to do this as expeditiously as we can. The whole point is we just want to stabilize, put enough cash, a enough liquidity into the economy to get us through the next couple of weeks. That is the whole purpose of this. Small businesses and those that work for Small Businesses. The unemployment numbers are very bad although there is some evidence that perhaps they may be slightly less bad but it is a hardship situation. If we can get through the next couple of weeks and, as you know, the administrations scientists have given the governors good guidance and a roadmap for reopening in several stages. May may be a transition month into a better economy, moving into the summer. When hopefully, the contraction will give way to some economic growth. We are trying to set the stage for that and keep folks going with the direct treasury checks, with the deferral of the payroll tax, with the deferral of Student Loans and income taxes, and on and on. That is what we are trying to do. I think in a short period of time, i have to give credit the operating agency has done a good job. Us move on to terrorists and trade. The latest announcement overnight is that we will be differing some terrorists on some goods. Can you give some clarity as to the purpose of that . What have you done . Larry on the socalled most favored nations where there are hardship cases, we will suspend tariffs for a few months, i think three. We are not rolling back 301s or 232s or other trade deals. But in some cases, the custom if therell be lifted are hardship cases. In particular, there was a lot andoncern about retailers related supply chains getting into the United States. It is a significant action. We want to help folks. Certainway to help o industries. And it does not change the president s own trade policy. We are suspending and differing as we have with things like income taxes and payroll taxes and elsewhere in our recovery plan. Kudlow sparring with jonathan. On the sectors hardest hit by the measures to contain coronavirus. Leisure stocks are still down. How is the industry coping with the prospect of a Summer Season with little revenue . And what steps are they taking when coronavirus measures are lifted . Theave the marriott ceo and internot to and the Intercontinental Hotels groups leader. This is bloomberg. Arun sorenson ada ra this is bloomberg daybreak europe. I am nejra cehic in london. The u. S. Senate will meet today for a potential vote on an emergency stimulus package. Fundsgislation would add to the full business aid program. House Speaker Nancy Pelosi said negotiations are down to the fine print. Still with us is charleshenry monchau. We were discussing the view yesterday that u. S. Equities because of the way the u. S. Has moved quickly. Has moved quickly to counter coronavirus. Do you have a preference for u. S. Equities in your global view . Charleshenry yes. More easilyly supported than any other markets. They are able to fine tune and engineer the economy with the treasury. Also, the top five stocks make up 20 of the index. Fasthey are growing very and they are taking market share. They are driving the valuation higher. Why they are pulling in a lot of domestic money. This is why we still like u. S. Stocks. Look at, you need to the u. S. Versus north asia like korea, taiwan, or even china. They may be able to grow this year. Manus charles, we have that Conference Today about u. S. Equities. Charleshenry monchau. We are trading at 18 time the earnings. Up, we are going to talk about another leader. Kim jongun, we understand he is in Critical Condition. What is the latest news from north korea. Manus a very good morning. I am manus cranny alongside nejra cehic it nejra cehic in london. Wti rebounds after plunging below zero for the first time after the may contracts expire. U. S. Crude for june delivery is at 21. The kospi trades lower on reports that kim jongun is in Critical Condition. Willd trump said he temporarily suspend immigration amidst the coronavirus as some states are preparing to reopen. Larry kudlow said the president will reopen the economy if it is safe to do so. Smaller gains in new virus cases in italy and the u. K. About the discussion around oil and what donald trump is prepared to do next to help us remain above zero. Nejra absolutely. Welcome to daybreak europe. A devastating day for oil yesterday. We have some breaking news coming through. Guide dueg its 2020 to coronavirus. This is amidst the uncertainty. It remains confident it can deliver on 2030 goals. In terms of the First Quarter, beat ons came in with a estimates. First quarter revenue coming in stronger than expected. It is the withdrawal of the 2020 guidance. The abandonment of that which is the key line to look at here. And to go back to oil, because i know we both want to talk about it, really devastating day yesterday. We asked how much of it had to do with the rolling over of the may contracts people that were long oil to get data that it reflects on what we have been saying for a while. The storage issues. Manus yes, absolutely. We are going to talk to Harry Tchilinguirian. With a whimper and out with a primal scream. What will donald trump be willing to do . There is a flotilla of saudi oil on its way to the u. S. That is the worst optic. Nejra it is interesting because citigroup said if the storage challenges continue, you could see brent chase wti to the bottom and you have goldman also talking about volatility and some kind of disruption we could see in production as well. How are the markets looking . Manus it could be a violent reprising. That is what Goldman Sachs was saying. We dropped sub 40. Volumes or 40 times higher. Will there be a rebalancing Goldman Sachs says. This is all about tender and read tender. Retail investors do not want to take delivery of a tanker of oil. You have that process going on. Equity markets. 26 higher than the crushing low of march the third. The hedge funds have wrapped up the short bets by 50 . Since the 14th of april. The dollar is bid this morning. Best yearoking at the since 2015 for the dollar as a Federal Reserve prepares to work prepares to return to work. I have put it at breakeven, the deflationary risk for oil. It is a clear and present danger for the fed. Nejra absolutely. I love that you put those breakevens in. You have pgim saying you may for buying tips. President donald trump said he will sign an executive order temporarily suspending immigration into the u. S. This comes as a country tries to contain the spread of the coronavirus. In a tweet, he said his decision will also protect american drops. S. American job manus let us get the very latest on north korea. The u. S. Has received information that kim jongun is in Critical Condition after artiodactyla surgery last week. According to unidentified u. S. Officials, the administration is Korean Leaders condition and are seeking more information. Engle.