Delivered. Bonds are performing a bit better now, a tightening of the spread, 2004150 is where we are trading right now. In the u. S. We are seeing gains in spite of the initial jobless claims figure that put shivers down your spine. Stocks are just going the other direction. The s p 500, up 1. 4 . The nasdaq, running away with things once again today. All but three sectors in the s p are higher. You can see that there is definitely a risk. Belowoil is still well 18 per barrel. Gold is continuing to is the dollar, although it is off the highs of the session. The dollar, miss versus the other currencies and the euro right now, whether is not much change but you have currencies like the Canadian Dollar that are stronger today on the bounceback in oil. Guy . Lets get some more insight into what is happening with these markets. As we indicated, European Union leaders are holding that conference about delivering massive economic stimulus measures. The need for a positive outcome from the meeting is very much underscored by todays april pmi data, which came in significantly below expectations. Eurozone, probably the worst number we have ever seen. Christine lagarde told leaders on the call that the gdp may as a result of the virus and that they have done too little, too late. Joining us on the phone is andy morris. Lets start off with the big picture question. We know that the data are bad. We know it is bad in the United States and particularly bad in europe. But at least in the United States we have a federal government. In the United States we have an effort being made to try to get the economy back up and running. In europe it is proving to be much more difficult. In terms of my asset allocation, do i favor the United States as ice as i start to think about what the recovery is going to look like . I dont know if it is necessarily a regional call as much as it is a sector call. Technology,at taking out amazon, netflix, apple and everything else, comparing the part of the market with europe, they have been in line with earnings provisions. There hasnt been that much difference between them. If anything, you could argue that in europe for a preference on Consumer Discretionary stocks , with a more supportive welfare state you imagine that there wont be as much anxiety and fear as you are likely to have like we saw with initial jobless claims today. The big difference over the last beene of years has technology and we appreciate how Much Technology is benefiting from the crisis, we are all working from home and watching netflix. Doctors have to do telemedicine instead of seeing patients in their office. Its all just another impetus for longterm Growth Potential in the sector, which is where the u. S. Stands out. A lot of this is about thinking about the sectors in the region. The big appeal for europe is that it is cheaper, but that is the case, has been the case for for most of the last decade. When do we start to see people purchasing cyclicals. Its a very similar story on both sides of the atlantic, health care on both sides have done very well. The numbers today are very solid. Coronavirus impact. Im wondering at what point we start to see cyclicals recovering. At the moment we are not seeing that, defenses continue to thenate, as the chart on screen shows us now. But that ratio continues to be a lead indicator and im wondering if its going to turn anytime soon. I think that if the market continues to focus on the honestly kind of good news or betterthanexpected news coming out of the earnings season, it may be happens sooner rather than later. Surprising is that the surprises have been more positive than negative. One reason that has occurred as you might have thought by now that analysts hadnt necessarily adjusted their estimate to account for the impact of the virus. So, companies have been able to analystsetter than estimates and what they expected. That kind of on the margin good news continuing, you could see cyclicals starting to outperform. But we are more on the cautious side right now because we think that targets have gone too far. We may have to go to a bump in the road before we see that type of trend present itself in a sustainable way. Any thoughts as to how much dry areer there is, if there pockets of dry powder, you could put to work in emerging markets ire risky areas . Imagine that people will be cautious for a bit. Clear concerns about how e. M. Is going to come out of this. We have significant and sustained strength in a way the you havent really seen against the euro. It has been much more volatile, like we have been talking about for years, a level of u. S. Dollar debt in emerging markets and one day if it was strengthened it would be a problem. Really,s suspicion that as far as the evolution of the crisis, they still have the worst ahead of it. As always, there will be an opportunity when prices are attractive enough and you have seen the worst of the risk. To be honest, we are overweight hard currency emergingmarket debt. To see investors moving broadly back into the money markets, thats likely not going to happen yet. The over haim on the overhang on the oil price drop, were going to see something lower for months to come and what does that do to the investors ability to invest . You are thinking about what it does to earnings, but you saw this in the past the last time we had a collapse in oil prices, it slowed down earnings for the indices and looks terrible because you had such a big move in oil prices and Energy Stocks that had been in a sense negatively distorted. Honestly i think we need to back out on whats going to happen in terms of Energy Prices with a broader sense of the trend in the index. Clearly it will be a drag on the earnings outlook, but what we need to of course think about is the benefit for consumers. If you can get petrol for under a u. S. Dollar, thats a pretty big change and something that will benefit, to the degree anyone is driving. But it will help companies when they start up again in terms of energy costs. Winners and losers, probably less concerned about the economic impact, though clearly it is important in the energy sector. Its more what does this tell us about implicit growth question mark equities rally in, but so are gold, oil is not. As we have seen in the past, a contradiction depending on the market that you look at. Vonnie we have to leave it there. A deeper dive into Global Markets with abigail doolittle. Toneil the risk on continues into todays session with a twoday rally for stocks in the u. S. And europe. Puzzling to some is the fact that we have this awful data in the u. S. , the weekly jobless claims, plus the real pmi in europe. Nonetheless we have stocks trading higher and a commodity with a risk asset rally of continuing into the commodity complex along with stocks and investors are looking past the real world data and towards the stimulus of central banks. This is a theme that we have seen for quite some time. If we take a look at the intraday chart on oil, we will see the bumpy road that you were just talking about with our last guest. Oil had been above 30 per barrel. Lows, the rolling contract down almost 80 . A good of a recovery though in the last couple of days. Nonetheless, still down 38 . I was just talking about the disconnect between data, stocks, and risk assets. It will be interesting to see of that is simply something we can back out of or if it is ongoing based on the demand we have seen in the base face of the pandemic. Coming up next, we will be speaking with the ceo of Union Pacific as they report their latest earnings with volume down 25 this quarter. Lots of questions for him, coming up. This is bloomberg. Guy from london, im guy johnson, with vonnie win. S is the european close lets check in with first word news. In the last five wicks five weeks, 26. 5 million americans have filed for unemployment. If everyone who asks for benefits is counted as unemployed it could meet in april jobless rate of 20 . President trump signed an exec order to curb immigration. Green cards that allow foreigners to become eminent residents have been put on hold. It will limit competition for jobs and an exception has been made for medical professionals and researchers. The house is expected to approve the billion dollar plan today. The senate has already passed the program to aid Small Businesses and there is money for hospitals and coronavirus testing. Nancy pelosi says the next program is a major package to aid state and local governments, setting up a conflict with the Senate Majority leader, mitch mcconnell. A warning from Christine Lagarde, who said that gdp could fall as much as 15 . They haveaid that perhaps done too little, too late and they are having a videoconference to try to figure out how to mitigate economic fallout from the outbreak. Global news 24 hours per day online and on air, powered by journalists and analysts in more than 120 countries. This is bloomberg. Vonnie lets get back to earnings season in the economy more broadly, Union Pacific has the latest today with volume done by 25 over last year in the second quarter. ,oining us now is lance fritz the ceo of Union Pacific. Congratulations on getting through a tough, tough quarter. Your employees are classified as essential workers. The supply chain was at stake here. Everything to grocery stores, hospitals, and so on. How many more employees do you think you will need to furlough or layoff . You have already had to furlough what, 15 . Yes, we have. We had talked about a 15 reduction in the you in the workforce yearoveryear. That was sequentially in the Fourth Quarter from last year. Doing right now is everything in our power to adjust to this dramatic decline in volume. Right now that car loans are Something Like 22 off yearoveryear and we told our analyst, our shareholders this morning that it could be as much as 25 through the second quarter. We are making all kinds of adjustments. Discretionary spending is off. We are adjusting the frontline workforce to the volume and adjusting the managerial workforce to the volume in a different way, asking them to take a oneweek unpaid leave of absence every month for the next four months and then all of the executives on the board are taking a 25 pay cut through that same time. We are taking all kinds of actions to adjust to the new volume reality. Vonnie even as certain things are up, like a grain and grain products, its down on a volume or price basis. How are you stress testing the worst caseet for the scenario . What does it mean in terms of pricing, volume, and layoffs . Thats a great question and we have set up a number of scenarios to stress test the liquidity. In all of them we think that by adjusting capital spending, and today we talked about adjusting it between 100 and 50 and 200 and 50 million, by pausing on the share buybacks, we think we will continue to maintain the. Ividend in its current form we also think that we are going to be ok. We have got other forms of liquidity available to us, a 2 billion credit line that we have not tapped. We have a receivables Credit Facility that can go up to about another 400 plus million dollars. We are in pretty good shape their, from a liquidity perspective. Right now its about getting the business right sized for the current volume environment and trying to get an understanding for how deep and how long the downturn is going to last. Mr. Fritz, its a guy johnson in london. Im curious as to what happens to the jobs you are reducing now when the recovery comes. You have been aggressively trying to make this business more efficient over the last year, year and a bit. Is this accelerating the efficiency drive that you have been trying to put in place . Could these jobs simply not come back . What does the longerterm picture look like in terms of employment at your business . I think the way you think about that is that over the last 18 months the entire team has a tremendous job at being more productive in taking work that didnt need to occur out of the network. That has generated most of the historic reductions we have seen and as we look forward, the work is going to continue. There are opportunities to be more efficient as we make a safe and Reliable Network for customers. At a 25 volume reduction, there is a lot more that we need to do. The way that i think about it is this is vonnie european close on bloomberg markets. Lets get a check on where we stand in the u. S. Apache,nding noble and devon are all leading the index higher. The nasdaq up 1. 3 in the dow up 1. 4 . Quite the risk on day for u. S. Equities. Ceosd some comments from that might have incentivized investors to put money to work. Guy amazing considering how grim the data are on both sides of the atlantic. European equities going off their earlier highs as we head towards the closing europe. The ftse 100 up. 9 . We have the next trading higher, the cac 40 we are up 1 . Volume is little on the light side and what we are largely seeing his recovery of some of the oil stocks. They continue to come back. We had a big move in brent that is worth paying attention to. Oil and gas are the biggest sector gains. The banks are coming back. The miners are continuing their recovery. At the bottom end, we have a move away from some of the defensive stocks. Certainly we are seeing some of the more cyclically geared areas coming back more strongly. The volume is not there and it does not make it feel as convincing in terms of the rally we are seeing. The data out of europe continues to be very grim. We will talk more about the eu leaders meeting at we will have the close, next. This is bloomberg. Of the United States. In terms of the individual markets around europe, lets give you a heads up on what is happening and talk about what is happening with the volatility story. That is worth focusing on. In terms of the individual markets around europe, underperformance coming through from the ftse 100. It was in outperform her yesterday. We are seeing some of the mining stocks into the oil stocks doing well, so that is helping out the london market. Nevertheless, we are seeing some weaknesses in other areas in terms of where we are seeing the pointswell, so weakness, unilevt with numbers earlier on. The major contributing factor behind all of that. The dax and the cac 40 up over 1 . Now going back down again. Now from a sector point of view, there is the volatility story, you can see it coming back down again, with trading at levels where we were the back end of last week and the beginning of this week. Certainly nervous midweek. We are getting volatility to go around what is happening with the currency. In terms of the sector story, you can see stocks driving gains around europe, bp doing well, that has been a positive story for the london market. The house for the u. K. Will be fairly well. Names like anglo adding significant points. More defensive stocks at the bottom end of the market. Let me show you what some of the individual names are worth focusing on. We do have some of the hotel stocks in focus, we also have persimmon rising because some of the households in the u. K. Have had a similar session. 28 despite up to the big provisioning. Down. We have also seen lufthansa. I think next thursday we will get the lufthansa number and their the first of the big european carriers to report figures. They are indicating a significant decline in liquidity over the next weeks. That is the European Market story. Vonnie a bounce today and equities. We have major indices up more than 1 . Hard to know how you can call that a rally. That is helping the Energy Components of the s p 500 and it is the energy index leading higher. It is up 5 . We just spoke with the unions the Union Pacific ceo. There is a lot of negative news but they did beat and there are expectations they will be able to get through this and come out the other side without being able to borrow heavily or extend credit lines. Gold is also rallying 1 . Is generallydex getting more strong. Lets take a look inside the s p 500. I mentioned the energy index. You also have the transportation index up along with the auto and components index. You can imagine in this environment it would be the utilities and food and staples. Guy . Guy lets talk about what is happening in europe. European leaders on a critical Conference Call that will determine how the eu will pay for its recovery plans, or at least that is the hope. According to bloomberg reporting, ecb president Christine Lagarde has told leaders gdp could fall as much. S 15 we are getting grim Economic Data. Joining me to discuss all of this is stephanie kelly. What are your expectations for this meeting currently underway . What you think it will deliver . Stephanie we can safely say they are a couple of things baked in, three elements of the package extending for the European Investment bank to a value of about 200 billion. The temporary benefits, layoffs, credit line is valued at 100 billion. That will be helpful because it is small in itself but incentivizes countries to have layoffs. Then the third is the esm credit line expansion, valued at about 2 of gdp with very limited conditionality. The last one is politically fractious, but what all eyes are on is the language around recovery if any . That is the big point of contention. We are bearing in mind after this meeting we go straight into a press conference. There is no written communication at this time. The way it is articulated will be crucial to determining how investors react. Guy what you think the outcome will look like . The french proposal looks difficult to achieve. The spanish proposal, that may be more possible. What ive been reading, certainly to the suggestion is the easiest course is to include this Recovery Fund within the eu budget that the commissioner will deliver and maybe there is gearing around that so we could see borrowing around that. The current budget is about to run out, so the debates around the budget is difficult at best. Im wondering what the possibility of