Markets. Buying in the long and in the u. S. We had a seven year auction yesterday. A lot of supply was coming online. One area you are still seeing selling is btps in italy. Oil up by about 1. 50. As we get lots of earnings sees their yum restaurants around the world largely open for business, so that is interesting. Worldwide comp sales down by 7 , better than estimated. The estimates were for down. 4 . 8. 4 . E for down no visibility really for all of these companies trying to figure out where they go from here. Into all of todays market moving news. We are about 1 3 through earnings right now. Onhabet surging in premarket betterthanexpected results. D both taking a hit. Annmarie hordern has more. Annmarie i want to look alphabet, up in premarket trading. On top of that, it is boosting shares in the nasdaq futures market. Sales came in better than last year. On top of that, they beat the street. They did suffer from cuts in marketing to do the pandemic, but the executives had a lot of optimism around youtube and Cloud Business is that fueled some of these shares. 2 billion more than what was anticipated. We have seen the pind, crilly have a massive blow to the auto industry. The ceo of ford acknowledged that. Ge this morning, they missed earnings, taking steps to really save cash, but this was very well forecasted for the company. No doubt, the pandemic has been absolutely brutal for aviation. The ceo said this quarter, the as hit, but the Second Quarter as well. In about 30 minutes is boeing. That is going to be very interesting. Theres talk of boeing meeting to tap government data. On tap. Companies one thing you have to ask yourself, does this quarter really matter, or is this to stay right off . Q2 or is this just a write off . Q2 and q3 is when we will really see the impact of this pandemic. Alix thank you very much. In europe, another wave of Bank Earnings that was First Quarter results. The site despite some strong numbers, feeling the pain from bad loan provisions. Bloomberg spoke to jes staley, ceo of barclays. That toughconomy is and unemployment goes that high, we have reserved what we into the debate to be. The government response is so were bust around the world. If it starts to mitigate contraction in the economy, that will free up reserves later on. Bloombergs dani burger has more. Souring ininly the loans set aside, Standard Chartered earnings under 1 billion. These are a level u. K. In european banks havent seen since the financial crisis, and it really just piles pressure on the lenders that already have a fragile business model. Coronavirus also has a disproportionate effect on any banks that have a large retail and commercial focused business model. Look at barclays for an example. Ae credit card business saw 38 drop in pretax profit. But there is a briley big qualification there is a really big qualification here. Strategists are saying about these earnings, it is overwhelmingly focused on the positive. You can see it reflected in the share price, as barclays is up nearly 7 right now. Morgan stanley points out that our place fic trading that barclays fic trading more than compensated for poor results elsewhere. Deutsche bank, we learned today that the surprise profit than an ounce profit they announced earlier in the week was also fueled by trading revenue. The other big earnings we got in europe was airbus. Through 8. 7 burn billion in the First Quarter, unprecedented for the firm. Have of that came from a bribery settlement, but the drop in deliveries that started in march also eating into their reserves, and likely will continue to. Shares are up 4. 5 . Analysts say that the cash burn was actually better than feared, calling it somewhat of a relief. You have to imagine with shares down 60 year to date, some of the results are already baked into expectations. Adding into the pressure for airbus and european banks is this new dynamic, where forecasting is basically guesswork, and we continue to see Companies Pull their guidance. Alix thank you so much. That 8 billion could have been worse. Heres one other story we are watching this morning. It is italys surprise rating cut. Toch downgrading the rating, can get down one notch to bbb, just one level above junk. Currentlynd market is on life support from the European Central bank, although the outlook was lifted from stable to negative. Morningp, more of your news, trade and analysis in the market in todays first take. This is bloomberg. Happy wednesday. Alix welcome to bloomberg first take. We give you the news, you get the trade and analysis of the markets. Joining us is bloombergs Michael Mckee and damian sassower. Lets set up the stage for the fed today. Michael the fed is the second item on the agenda today. The opening act, gdp for the united states. The consensus is for 4 annualized drop. We will see if it is worse than that. But wall street will kind of shrug that off, looking more at the components to see how fast the decline was in various areas to get an idea of how bad it is going to be in the current quarter. Then we go to the fed. They will decide what they are going to do, eights probably nothing because they have done so much already, but look for some discussion from jay powell in the Virtual Press conference this afternoon on where the fed thinks we go from here. Do they think we need to add more stimulus to the economy . Do they think we are going to be doing this for a year, two years . A lot of the programs they set up are supposed to expire september 30. Do they think they will have to go longer than that . Some questions about where to invest in the future, but not a whole lot of additional action expected. Alix if that is the set up, what are you watching within that . Damian i agree, the big what it discusse fed doesnt the actual duration. I dont expect that it will. But if it should do that, that could be, in my opinion, quite bearish for markets. Lets see what happens there. In the meantime, i am focused on china. We are seeing the big banks. We just saw the big oil producers. Clearly they are not exempt from what is going on globally. Spending cuts, output cuts, they are going to reduce dividend payments. Very sensitive given china is the Worlds Largest oil and gas importer. Alix so how do you digest that . We knew that was coming. How does that inform how you are viewing them . Damian i will tell you one thing it is doing, it is causing the bank of china to take a 1 billion loss on oil linked retail products. They have this crude oil product links to wti in the u. S. , but it is in yuan. They are not the only bank in china that has products like that. B youve got ccb and banks in communication with others. They will exit the pandemic more quickly than other countries come about china banks are trading at less than five times book value. I am looking to see any improvement. Alix im glad you brought up oil. What has been interesting is oil prices havent necessarily had the same disruptive quality they have in the past when it comes to e. M. Volatility or emfx. Retail investors got wiped out, but that is different than what we what ive seen for years ago. What you make of that . Damian its no destructive quality right this minute, but it will certainly be destructive down the road. Not just in the middle east, but across the whole of emerging markets. We have seen roughly 70 billion of dollar debt issued from e. M. , most of which have come from easteigns, with the middle comprising a large portion of that. Metrics are deteriorating off the back of that. While that may not impact them today, it certainly will in the future. Alix how does the fed address oil and the inflation conversation . Michael they will talk about the fact they need to keep an ion it, and there is the danger of disinflation out there. I am not sure they are going to come out and say inflation is on the horizon because that might scare the markets, but they will talk about the need for vigilance, and that the policies they have but in place so far should help counteract that. We will have some data on prices from the gdp report. It may give us an indication of some of the impacts of the overall coronavirus shut down, and the idea that that is going to be weighing on prices as well. I think everybody is pretty used to the idea that we get very close to zero. We might even see a month of disinflation, deflation where we go below zero, but the expectation is then the economy starts to open up, oil starts to get pumped out of your lix, and prices start to rise again. Then the question, the market will flip, and the question is how far, how flash does inflation rise. That will be a whole different conversation, when we havent had in quite a while. Alix it is crowded with hummus right now, so i am doing the chickpea long for my refrigerator. All of a sudden we get oil stabilization, and rates spike. Is that something you are or is or are we that far out . Because mikeup mckee just mentioned inflation. Froment heard that word him. Certainly if inflation accelerates, it is really going to damage emerging markets, specifically those which resorted to quant easing. The rise in the Monetary Base means is going to lead to weaker currencies abroad. It is certainly going to lead to faster inflation and many of these emergingmarket economies, and that certainly wont be good for Foreign Investment or foreign inflows from abroad. Alix what did we just see, saudi arabia and reserves plunging the most in two decades . That hasnt even begun to factor in the potential inflation. Damian we saw a lot of Central Banks, including china, dipping into its reserves in march to defend its currency. Deteriorateerves and deteriorate considerably, that is going to be a prealarm bell for emergingmarket investors. Alix what is interesting yesterday, if you read the headlines after stocks dropped, it was all about Consumer Confidence was really terrible, and thats why stocks were selling off. Did you buy that, or do you get the feeling when you talk to sources that this is a normal trading environment as we wait for clarity . Or are we really moving on these headlines . Michael it is kind of like people are saying this is normal, to the extent that anything is normal right now. We also have lower volumes than usual these days, and especially with the holidays coming up. You do get some exaggerated moves at times, but the feeling is traders have an eye on the economic data, but kind of know what is going on. Morning ishis germany. They want to open up the economy , but their infection rate is going up again. Singapore, the infection rate going up again. People are trying to parse out, . O we get to open earnings . T to see or are we going to stay in lockdown and a lot of places . I dont want to use the word fundamentals because nobody really has a fundamental at this point, but the traditional things you want to look at, and then the progress of the disease, those are the two factors that are balancing each other out right now. That is the next and we are going to be tackling over the next couple of hours. Guys, really appreciate it. Tune into bloomberg tv. We will have special coverage for you at 2 00 p. M. Here in new york. Any charts we use throughout the two hours, go to gtv on your terminal. Viviana the parent of mercedesbenz another company hammered by the coronavirus. Daimler says sales and operating profit slumped. Has startedsays it a gradual ramp up of production. Ford forecasts in the Second Quarter, more than 5 billion loss. That is about 2 billion more than analysts projected. It is one more sign of how the pandemic is hammering the auto industry. Ford expects to see in every region significant sales declines. The company also says it will delay until 2022 start of its self driving vehicle service. Shares of alphabet higher today. Cloud and parents you do business is kept growing amid the pandemic. Sales rising 14 , beating estimates. Crumpled, ad sales but still werent as bad as expected. Alix thanks so much. sr more on alphabet ourings, we are joined by bloomberg analyst. A second. Ads for do we have visibility of what it will be like in the Second Quarter . Reporter the pain is going to continue. We have some visibility for the. Onth of april from strong in january and february 2 almost declining by midmarch, and that trend continued into april. There are some signs that some aspects of the business are showing flattening, but to be honest, i dont think the pain is over for the Advertising Division side in general. Youtube was extremely strong as well in the First Quarter. In fact, surprisingly so. Also slowed down 30 plus growth to significantly slower towards the end of march. So i think if you look at the other side of the equation, you are hearing how the customer revenues are dropping as arens continue to continuing are dropping as lockdowns continue. Is going toisaac mirror what the macroeconomic trends say. What is interesting for google, the quarter is showing that the business is more diversified than in the last recession, especially with cloud benefiting a lot from work from home trends , and the structural change for a push towards accelerating cloud options. Companies are trying to make sure that they are ready and prepared and adapting to videoconferencing, the ability to have employees work from home for a longer time. It is really changing the culture of Cloud Adoption in many ways. The growth we have seen in cloud yes . Alix if you look at the good and the bad, the risk of the weakness versus the strength, what is priced in and the relative earnings value right now . I think the weakness on the ad side was expected. What came out was not as bad. What is clear is the cloud side have somentent side secular details here. So theyre managing the costs well amid this uncertainty, but they are seeing a lot of adoption of content across the property, even if it is not making money from some Cloud Solutions lets or ecommerceing adoption. Ads on googleng for now to benefit from the. Urge on the other side of the pandemic, it is going to add new Revenue Streams for this company. Alix weve got to leave it there. Thank you very much. Coming up, it is how to trade all of these earnings. We will break it down with dean curnutt, Macro Risk Advisors ceo. This is bloomberg. Alix this is bloomberg daybreak. We are waiting for numbers from boeing. On the stock market, you are looking at a climb in the equity markets. Nasdaq also rebounding. Yesterday, the nasdaq was one of the hardest hit. Detect winners became the losers, prompting calls for, is this a shift in leadership, or was this just normal trading . European equities a little more mixed, but they have negative autos and positive banks. Nonetheless, stronger trading revenue at the big banks. Other asset classes, looking at broadly weaker dollar, btps getting moderately hit. Boeing is out right now. Revenue coming in 16. 9 billion, down 26 year on year. Their negative operating cash flow came in about 4. 3 billion. Loss per share was 1. 70 versus 3. 16 a year ago. Lets take a look at the cash burn, 4. 3 billion. Airbus had an 8 billion plus, but have of that was due to some settlements, so it seems like there negative cash burn are relatively inline line with each other. Theyre looking at a voluntary layoff program, and they are still looking for safe return of service for the 737 max. The 787 production rate is now going down to 10 per month. The negative cash burn is that headline for you as boeing stock is still up by about 1 in premarket. So how do you trade all of the volatility when you dont have any visibility . That is the real question, whether looking at the overall market or individual stocks. We are joined by dean curnutt, Macro Risk Advisors founder and ceo. How do you hedge right now stocks overall, s p . Dean there is certainly some sticker shock in terms of the price of hedging. It is clearly down substantially from a month ago, but when anyone looks at the prospects for hedging their portfolio out a couple of months, certainly relative to earlier this year, it is a normal sleeve more expensive. It is set against a couple of things that make it even more challenging. One is the policy response is overwhelming, as it needs to be. So it is certainly setting a floor under the market. The daily swings in the market are clearly settling down. The first thing i do in the mornings look at the overnight futures. You get a sense as to what the u. S. Is going to do based on even the preopen activity. You are just seeing a narrowing of ranges. That means hedges are increasingly difficult to pay for because you are not getting those daily swings. So it is not obvious. I think the second part is just the market has given a free pass to a lot of these numbers. It is a bit of a waiting game to see what is on the other side. I think about hedging and a couple of different ways. One is just paying for options. Those are harder to do. The second is trying to put things in your portfolio that can do well in a market that might revisit subversion s revisit some version of negativity. That is as gold becomes an increasingly interesting thing to look at in that context. Alix before we get to gold specifically, i wanted to get your take on the future of volatility because all of the talk the last couple of days is the vix curve coming down. From your risk perspective of the market, is that an appropriate view . Sense in the make context of the market exhibiting lower swings. , thisk in a lot of ways has been a classic crisis. You get a shock to demand. It creates derisking. Dd risking feeds on itself. The authorities dont sit by and do nothing. They come in, this time with reasonably overwhelming force, and then that creates a rush to cover the shorts and brings volatility down. So now we are in the hard part. The vol has come down a tremendous amount. It is still maybe worth it to be long volatility, but it is difficult to ascertain that in the context of a lot of artificiality in asset prices from government and fed response , and peak crisis is over. That was a month ago. So we are trying to sift through what is the result, and a little bit of it is a frustrating waiting game because the market is not really responsive to economic and profit data in the sense that it normally is because we are in no mans land right now. Alix lets go back to gold. Is that a call for 2000 gold, or is this is literally here is where i can put some