Of people. Much like us, advantage with jobs, but the United Kingdom request of aid is extraordinary, the size of people struggling. Francine that figure which you say is very much like we are seeing in the u. S. , was quite shocking. We know this is big and millions of people are losing their job, but the government saying 66 of businesses have asked for Government Support to pay wages. When you look at what Central Banks can do and this was clear from jay powell yesterday if you look at the stimulus they are putting in place for the recession are when the pandemic is here, now, and the second phase when a recovery takes place, three months, six months, even longer, what kind of tools and stimulus support will need then. Tom it is absolutely fascinating. ,or those waking up in america i cannot convey that rotation of earth and data coming out of asia. Data hasy of european been absolutely shocking this morning, and we will give you a brief on that. Us Nouriel Roubini will join and we will have the Lagarde Press conference in the 8 00 hour. With your first word news, here is viviana hurtado. Blaming donald trump chinas Coronavirus Response on politics, saying they would do anything to see him lose the election. He did not provide any election evidence. He is considering various ways to punish the government. The Chinese Government says it has no interest in interfering. Jerome powell worries about the longterm economic damage from the coronavirus. Chairman powell suggesting even if the economy starts to recover in the third quarter, the battle would be far from over and is urging congress to do more. The European Central bank will vote today if a 1. 1 trillion dollars stimulus is enough, including a genuine generous lending plan. Christine lagarde is supposed to reiterate her pledge to do everything she can. The euro area economy plunged into a record contraction, shrinking at an annualized rate of 3. 8 . That reflects shutdowns aimed at containing the coronavirus and more demands for fiscal support from governments. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Hurtado. Ana this is bloomberg. Tom thanks so much. Equities with a fractional left. ,acebook out with earnings microsoft with earnings, and apple later today in new york. In the bond space, shortterm paper coming in with a vengeance. The u. S. Twoyear well under. 20 . That is the number one barometer going through those bloomberg headlines we will see from Christine Lagarde. What do you see . Francine i am seeing a similar data check. A lot of the focus is on earnings and u. S. Jobs. That is also happening today and a lot of focus is on what Christine Lagarde can say in terms of extra stimulus. The economy is in a Holding Pattern and we got a look yesterday after encouraging news fauciach. Which dr. Said was encouraging, from gilead. A medication in treating covid19. Tom joining us is Marcus Ashworth and he can look at the economic tapestry we see from the ecb and pull it over to market dynamics. What are the markets telling madame lagarde right now . Marcus i think they are sending her a message which im a bit worried she may take too seriously which is mainly, look yields noter italian so long ago, a couple weeks ago when it got up to 2. 15 or something. So 35, 45down at. 18 basis points from the peak. That may send a message to the ecb they dont need to do more. I think they probably will not do much. They will tweak but they will come in with extra firepower. That may be a mistake. They need to follow the fed and do more, particularly on investmentgrade assets and make sure they stay low for everyone. Tom that is right where i wanted to go. Jon ferro is better at this than i am, and color this for our american audience. Explain explain the relationship between buying highyield debt to the institution the European Central bank . What is the relationship of garbage bonds with what goes on in frankfurt . Nouriel the point is marcus the point is the moral hazard germany and the more fiscal governments have and a bore ins to buying government abhorrencens to buying Government Debt they have tried to stop a problem to gum up the Banking System. Doubleg double be, grade, below investment and a knock on effect would feed into lower credits even though they are not buying them. Yield hunters constantly going to find things with tigger yields, that would send bigger yields, that would send a bigger signal. It does not have to be long, it can be that immortal word temporary. Francine how much does Christine Lagarde have to actually keep her firepower for the next phase, the recovery phase . Marcus i think they have got 2020 covered. I dont think there is an issue about not having enough money to buy bonds, they do need to plan for 2021. This will not go away. Go virus may, lets hope away, but the impact will not for a while. Whether they do an extra 500 billion today or wait is not the end of the world. They will buy as much as they can. Give themselves constantly more flexibility, making sure the Banking System doesnt gum up, making sure enough corporates are getting enough access to borrow money. ,ook what the fed has done funding corporates directly by commercial paper. That will not happen in europe, but they have been very flexible on Bank Regulations and need to help with corporates more directly. Francine where do you see the biggest concern . Does italy need a bailout once this is over, and is there anything either the commission or ecb can do now to prevent that . It doesi dont think necessarily automatically mean a bailout it has to be able bailout. It has to be able to fund itself. Threedaying given a three year pass the next two years, if it keeps its funding rate below 2 , that is what the ecb can do and is doing. It is more of a question of allowing some of the things that need to recover, to recover. Corporates need growth. Lets bring it over to the markets. This has been wonderful, and i get the gloom. There is a sea change of moving the vision from 2021 and as carl andadonna suggests, to 2022 2023. Adjust that for how the stock market responds given global shock. Everybody is putting out charts showing this is ugly, but the stock market is not. The stock market doesnt have to be ugly if the economy is ugly, right . Marcus true, but the point is lets say you have vision on where corporate earnings will be. We are back down to levels of last summer where corporate earnings were expected to be growing and there was vision. Now there is no vision at all and it is a black hole. Stimulus can do a lot not everything, and key things like a highyield market, we have had three issues in europe and a handful more in the u. S. We need to see that open to people who can get longterm finance. To get the five year or 10 year financing, you have to come through the main loan and bond markets and they are not open yet, and that is why the fed has worked so hard and the ecb needs to do its bit. I hope it does not fall asleep like it really does. Normally does tom if we see the ecb say to the commercial banks, lets issue paper, will we hear that from Christine Lagarde . Marcus i suspect not. I think they are working on it and want to get everyone on board. Unfortunately this will sound awful but the crisis in germany has been less than other places in the world and there is less sense of panic and need to do something. Lagarde is a consensus builder and needs to get germany on side two realize that they need help. Prevention is better than the cure and it could become an incurable. Ashworth fromus bloomberg. We will be back and will talk much more about what Christine Lagarde can and cannot do at the European Central bank. Ae press conference starts little while from today is bloomberg. Francine this is bloomberg surveillance. Shell had to cut dividends for the First Time Since the second world why world war. Omberg spoke exactly exclusively to the chief executive. It is of course a difficult day. On the other hand, it is also an inevitable moment. We are basically facing two problems, one is the poor Macro Economic environment which is getting worse, but the other problem which is probably bigger is that we basically have a crisis of uncertainty, uncertainty about demand, about prices, maybe even uncertainty about the viability of some of our assets given the logistical issues we have. We have taken some strong and early countermeasures to protect the Financial Resilience of our company, and you have seen before we have taken a reduction in capital costs and operating costs, 89 billion over 12 months, but frankly speaking, these countermeasures are not enough to deal with the impressive amount of uncertainty we are seeing. The board decided it was prudent to reduce the dividends, and early this morning we have decided to reset the dividends to . 16 going forward, which is still a meaningful and affordable dividend. Debt let me ask about your companies and countries are having to deal with higher gearing. You were already at your Comfort Level before this crisis but changes will have to be made to our Comfort Levels. How high do you expect your gearing to go, and when do you want to turn it around and bring it down . Ben good question, and when i talk about Financial Resilience which is the key thing to protect with such an uncertain outlook, it is both about the debt levels that we feel are appropriate, but also the liquidity that we have. The debt levels are outside the range we would consider to be normal over the cycle. Gearingp with a slightly less than 29 . We would really like to be below 25 , and of course in the next quarters and years, depending on how this plays out, we will do what we can to get our gearing back to the range we have. Liquidity is fine. We do not have to worry about that. We have more than 30 billion of funds we have access to, but we have to protect these levels of Financial Resilience, and that is why we have to take these drastic countermeasures and take them early and decisively. At this point in time, i would expect our gearing to stay slightly elevated but not at the level we should be concerned. With just a few minutes into the start of the trading day, shell shares falling some 3. 5 at the gate. Is that to be expected . Investorserstand some will feel disappointed and they did not expect this to happen today . Ben i understand this will be a difficult day for our investors. It will be particularly difficult day for investors that are in our stock for income particularly retail investors. Believe me, i feel with them the pain that this causes. I hope it doesnt come as a surprise that measures like this need to be taken in order to ensure the viability of the future value of our company, and i expect that as the quarter wears on, as people will see the extent of the further uncertainty play out, and the distraction of the amount of certainty of assets viability, etc. , will be seen as the only prudent and responsible step to take. The board was clear they would consider it irresponsible to borrow to pay a dividend that is fundamentally not sustainable under the circumstances. That cannot be in the interest of any shareholder right now. Tom a historic day for royal dutch shell, big oil, and this Economic Contraction we are in. We have much more coming up. A former finance minister of greece will join us and we will look forward to the ecb in in seveneginning hours, and the Lagarde Presser of the 8 00 hour as well. An important conversation with Carl Riccadonna of bloomberg economics. He has written a blistering essay extending out your timeline to 2023. Please stay with us. This is bloomberg. Viviana you are watching bloomberg surveillance. Shares of facebook are higher today. First quarter revenue, the social network reporting in 18 jump, showing advertising budgets were strong before the coronavirus out book outbreak. Working at home boosting microsofts quarterly profits. There was increased demand for interdutch internetbased software internetbased software. That is your Bloomberg Business flash. Francine thank you so much. We will get back to viviana with everything you need to know in the news. Your markets are pretty much focused on two things, the European Central bank and u. S. Jobs, laying that over with heard with what we heard from jay powell yesterday. Liftther thing that gave a to the markets was the gilead trial. Saying afrom dr. Fauci little bit of optimism but a lot of caution because it could go either way. European stocks flat. 1. 2515 after the government said 60 of businesses applied for some kind of wage relief. Comes ast term paper well, german twoyear and the u. S. Twoyear decisively under. 20 percent, not back to where it was in 2011, but the two year yields coming in. We will digress. We have done very little on corporations. We will speak to the analyst on apple. Apple is out with earnings and we need to catch up on some of these corporate stories. Please stay with us. This is bloomberg. Good morning. 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. Lacqua in london, tom keene in new york. The ecb meeting coming up, a lot to talk about, the shock of the Economic Data we are seeing. Also the shock of the Tech Corporate data we are seeing, not the big banks or beleaguered industrials or a collapsing oil business, it is a tech dodger Technology Juggernaut centered around five or Six Companies in each company is distinctive. Us. H sankar joins a lift up to 335ish. I want to cut to the chase what is your some of the parts of theon of apple sum parts valuation of apple . 335, and wed say look at the parts and we break down what you call your Traditional Hardware business, etc. , andad, macbook, the services and content. The hardware business is trading at 12 to 13 times multiples but now we give it an 18 multiple because it is going into a 5g cycle. Get a 30 times multiple because they have a revenue with a higher premium valuation. Tom what is your number on that, three hundred 35 r 500 . I cannot get an answer on a or 500 . 335 i cannot get an answer on a correct valuation. Krish 335 over the next 12 months. We look at the earnings power for apple, which effectively from last october to this september the eps of the company, and one reason why 2021, whether you look at a fiscal basis or calendar basis, that is the shining moment for 5g. Tom we have recently a moonshot in amazon, microsoft showed some good things, google has a struggle. Todayre we going to see from the calls, from the presser from all the world about china, what will we see to position apple like these other companies . What will be the surprise to lift the stock . Say a couple of things. Apple as you said is a diversified company in todays terms, given that it is more than just an iphone, and iphones are consumer centric and are expected to be weak in the near givenbut the services, the work from home environment we have been in, it should be more downloads and that should benefit apple as a whole. The other thing i would say is ,n general if you look at it many have gravitated to where there is more strength in tech. Strength in technology seems to come from downstream demand. Pcs have been strong in the near term. Favoring the Pc Data Center names, but qualcomm last evening highlighted that small phot smartphones will be down 35 on a yearoveryear basis. Tom what i want to know is if i look at these 5, 6, 7 juggernaut companies that make up 82 of the s p 500, it seems to be the differential is Revenue Growth. What are you modeling for Revenue Growth forward on apple . It is not amazon like or microsoft like . Can they get to middle single digit or revert to Something Better than that . This, i wouldor say this year will be a little light but i do have them going pretty strong into fiscal 21 fiscal 2021 because of the 5g iphone cycle and over the last couple of years, your services 15 to 20 probably cable business over the years, so Revenue Growth can continue to grow into calendar 2021. The revenue between apple and google has always been a bigger question, and in my view, given the diversity of revenue, apple has become a much more Stable Company than it used to be five or six years ago and it is solely dependent from the iphone cycle. You do have other vectors of growth from apple like the services. Even within hardware, air pods are growing. It may not be enough to offset weakness, but they can do buffers. Tom we have got to do this in a couple of days when we see what the earnings are and what you do with your buy and price target. Romaine will really go right to the data this afternoon. Now in new york city with their first word news, viviana hurtado. Isiana donald trump says he considering ways to punish chinas g