Recovery of the whole of europe. President trump invokes a wartime law to get more swabs produced as he rebukes accusations from impov ngovernoy dont have enough testing equipment to reopen their states elsewhere the uk government is reportedly split on easing of lockdown restrictions, as it appears the Health Secretary matt hancock wants to defeat the virus before easing measures phillips First Quarter numbers drop 33 as they suffer the effects of coronavirus in all of their markets the ceo telling this station, though, they do see growth coming back in the second half of the year. Our order is strong and we expect a gradual resumption of Consumer Sentiment, as we could already start to see in china. Light crude prices get crushed amid concerns the u. S. Is about to hit storage capacity, sending the may wti contract to its lowest level since 1999 well, a very warm welcome this morning lets get into our top stories of the day a number of u. S. Governors have clashed with President Trump over his claims that states have sufficient coronavirus testing in place as part of their floon reopen the u. S. Economy. Both republican and Democratic State leaders called trumps xlents delusional and absolutely false. Trump hit back at the criticism, tweeting he was right on testing and calling on gov no ares to get the job done out breaks broke out over the weekend. The protests, many organized by conservative groups, called on governments to relax lockdowns and reopen the u. S. Economy. President trump defended the demonstrators, calling them, quote, great people. Mayor de blasio criticized President Trumps response to the outbreak, asking if trump is telling the city to, quote, drop dead andrew cuomo said virus deaths in the state have declined but warned against reopening the economy too soon its no time to get cocky and no time to get arrogant, right we still have a long way to go and a lot of work to do. And this virus has been ahead of us every step of the way we have been playing catchup from day one in this situation so, thats the latest in terms of whats going on stateside. Whats going on here in Europe Germany has reopened parts of its Economy Today while in spain the government has chosen to extend but ease the lockdown in the uk, disagreements over how to lift measures are dominating the headlines steve is in the center of london charlotte joins us on spain. And annetta is joining us from frankfurt. Germany, they have been very aggressive, very early on when it comes to testing and it appears as though theyre reaping the benefits of that approach tell us whats going on in germany, what parts of the economy are actually now reopening . Well, its a very specific nature of the economy, which is actually reopening it is retailers, which have less than 800 square meters in public area and also parts of the car production is resuming their production in germany, thats about it like social distancing rules, all other restrictions will remain in place. Were just hearing to Angela Markle that germany is taking it easy and we could see a resurgence in infection rates if we are not sticking to the strict rules, which are still in place, meaning we are not allowed to have big social gatherings in public or in private. And social gatherings are big public events. We wont see that until august, that tells you how much success the government thinks this Current Situation is angel markle, chancellor of germany, reiterated multiple times this is only interim success and the virus could spread again very much faster if we are loosening the loos loosening the rules too fast that is why every two weeks theyre convening, the cabinet and coronavirus group, they call it, to really yeah, to reopen parts of the economy even further but if we can go full on with open schools, for example for now its just a very gradual approach we cant call it a victory for now. What germany does very successfully is testing, testing, testing now what theyre also doing, theyre starting to have more Scientific Research into antibody tests, which are not very reliable right now, but they are trying to make them more rereliable, perhaps even before we get a vaccination, we can antibody a large part. Population which could then give them some sense of security. Back to you. Thank you so much we will be talking about those antibodiest tests later in the show thank you for the latest on germany. Lets shift over to spain now where Charlotte Reed will join us for more on that country. Charlotte, it looks as though were seeing green choshooting t of spain as well give us the latest no, youre right, they gave another tv address this saturday to talk about how the rest of the situation might be behind them, behind the country, but theres still a lot of challenges for the country ahead and the Economic Situation is one of them. He mentioned he was going to seek extension until may 9th and in the runup there might be easing about children being able to go out as for now they have to stay indoors the whole time spain started easing the measures and the confinement just a week ago when some nonessential workers have been allowed to go back to work but now the Prime Minister this weekend talking about the new another malty and how the unlocking of the lockdown will be very gradual and very slow. Its said there will be an could be a group, didnt give details but hinted at this gradual lockdown and spain has been hit very hard in march alone 900,000 people have lost their jobs there are forecasts of an 8 loss in gdp for spain this year. To put it in context, the financial crisis of 2009 was 2. 9 8 of gdp loss is a huge number in comparison. So, a little earlier the spanish finance minister spoke to cnbc and spoke about how the country has learned its lesson from the financial crisis and how they hope measures put in place will help a quick rebound of the spanish economy. The Spanish Government moved very fast in an effective matter from day one to try to provide two sources of adjustment to the economy to stop the same mistakes we provided ample liquidity for the economy to exist and flexible mechan flexible mechanisms in order to allow the unemployment level ramp up because of the closures for some weeks we see these measures are being quite effective to ensure there is no destruction of the economic tissue and we have a good basis to recover to kick start growth once the Health Crisis is behind us. That was the spanish finance minister speaking to cnbc earlier. Sailing the government has put in place for quick rebound but the spanish Prime Minister saying the situation accidents the worst is behind us but big changes ahead for the spanish economy. Thank you so much for joining us with the latest on spain. Lets get over now to steve who will join us for the latest in uk were talking to annette and charlotte about how the german and Spanish Governments are beginning their exit strategies and how to ease. In the uk, the government has been reluctant to acknowledge what their exit strategy is. Whats going on . And et cetera becoming annoying for the British Public which, by and large, has been incredibly supportive of the government restrictions, lockdown, social distancing, despite theres been valuable criticisms about testing, about the protective equipment for the National Health service and for care homes and, indeed, the reporting of deaths as well. Lots of big questions. This comes as jenny harris, the deputy cmo, believes were moving in the right directions, past or during the peak and things are looking better on the infection rate and the hospital admissions rate. As you say, there are lots of questions over strategy. This is the day when schools should have gone back, including the city of London School behind us and the city of London School, one of our correspondents on twitter said its fully online,s as are a lot of schools theres nothing like getting physical teaching, as we all know and questions over that and, indeed, the opening up of the other parts of the economy that could be done sooner rather than later there are a lot of questions over being as the sunday times and other press say they have good sources saying the government were looking at a whole host of smentz, including a traffic light systems where you have green for getting some parts of economy up and going, and medium and red areas will take longer from the other side of the coin. The government, the education secretary or the cabinet secretary, one of the senior members of Boris Johnsons inner circle, so to speak, both strenuously denying there was a strategy which could see the schools opening as early as the second week of may this seems incredible that various detailed reporting came out from various sources only for the government to deny it. It reminds me of the time, dare i say it, stories are leaked for the sunday paper, so companies, governments and institutions can see what the reaction is the old flying a kite via the friday night drop, as journalists will understand those concepts michael gove was saying, no, its not direct. The uk does not have Detailed Planning available at the moment the public has been very supportive so far, despite the fact that the death toll continues to be absolutely horrendous here in the United Kingdom and 596 people died up until sunday evening that takes the total death toll to 16,060. People want to know whats going on but the government is adamant, and dominic raab said there were five key tests, whether there was enough equipment and if actions taken if they loosened restrictions would create a second wave the government is sticking to its guns certain quarters are getting very restless how the strategy will look when there is a lessening and were finally past the peak back to you. Your point about the friday night drop, it reminds me of what you see in m a markets, the drop to see how stocks react to potential m a news definitely a concept to be aware of here. Well get back to you later on street signs. Lets bring in graham secor, chief European Equity strategist thank you for being with us this morning. If you look back, equity markets have been on a bit of a tear, rebounding from the lows in march. I know you put out a note on march 24th saying we were close to peak uncertainty. If i look at the way markets have reacted, it seems as though you may have been right. Have we actually reached and past peak uncertainty here yes, good morning, everyone we think the point of that note back then is we past peak market uncertainty. And what we were arguing is that is the point when policy makers around the world basically got ahead of the curve, or no longer behind the curve theyve done huge amounts of policy response from Central Banks and governments, stabilized the situation from the markets perspective and the markets bounced very strongly from that i think in terms of looking forward to make more progress from here, because obviously weve had a large bounce in Global Equity markets now, its more about the extent of the sorry, the macro uncertainty, the economic uncertainty, how quickly we can recover for myself as a strategist, what were focusing on now is how bad the earnings damage is going to be and whether or not we can still create upside from equity markets at this point when we think about how much earnings are going to get hit and where we are on valuations as well we think europe is up 17 from the lows, the s p is up over 25 from the lows. We do think weve had a pretty strong recovery already on a market perspective. From a valuation point, one metric that stuck out to me in your latest research is valuation discount of cyclicals versus defensives. This has narrowed from 26 to 5 , suggesting the valuation gap for cyclicals is much, much narrower is it too late for investors to buy into these value cyclical plays given the rally weve seen not necessarily its quite a tricky message from the cyclicals because theres a very we have a bifurcated market in general, lets call it, the tech stocks and quality stocks people want to own and the cyclical value names like and autos that for many people people have not wanted to own. When we look in the cyclical universe, we get a quite severe bifurcation so European Capital goods look very expensive to us. Mining and autos look cheap. Within the cyclical space, we would argue there are some sectors where valuations suggest theres quite a lot of good news priced in and other sectors like mining and auto where you would say the good news extent is priced in. In the note we published bas week, we think from an investor perspective its interesting to look for single stocks or subsectors where things are down there. It doesnt look like lots of upside cyclical to rebound over the nextthreeweeks but when you drill down during the universe, we think you can find subsectors and the like where valuations look quite attractive. I wayour colleague, andrew sheets, had a terrific piece about the risk of countries trying to reopen their economies too quickly and the danger of a second wave of the pandemic or potentially problems around that reopening. Is there, perhaps, a reason to believe that even though we may have passed peak uncertainty, we might have limited visibility around the impact on the Global Economy way into the second half of the year . If thats the case, cant we afford to wait a little bit before reentering equity positions . Thats a good question. I think its the right idea as well from our perspective. When we wrote that, europe traded ten times close to pe and now trades at 14 times pe. Thats the largest ever onemonth rerating in markets. This is my point weve come off an awful lot in a short period of time i agree with you, our experts at Morgan Stanley believe its quite possible we have a mini reescalation in virus waves as we look over the next months its a cat and mouse game. We relax restrictions and then a pick up of cases as weve seen in hong kong and singapore over the last few months, often it ends up with some restrictions being put back in place i agree. The market here seems to me to be pretty fully valued on the basis that there will still be some uncertainty Going Forward about how quickly we can sort of relax restrictions and support the economy and the risks we get, new escalation. So, i think thats why im a bit nervous about buying, shall we say, cyclical shares where valuations are quite high because in my mind theyre pricing pretty quick normalization of the macro environment and things Getting Better quite quickly, whereas if youre buying cheaper shares and you dont think the Business Models are broken, be you have a margin of error if, as we suspect, this will be two steps forward, one step back approach to trying to reopen economies. Talking about reopening economies, one of the things that concerns me is we get that read across from china at moment is that this is an economy now meant to be giving us a vshaped recovery as its closely managed by chinese authorities, and yet retail Sales Recovery numbers are lackluster and if things are going so well, why have the chinese just cut rates on one and fiveyear lending . Thats troubling, it seems to me i think were still in the face when policy makers are effectively going all in youre looking at the current growth data. The market is basically saying the Second Quarter is going to be terrible from an economic and earnings perspective, but i know that, so lets move on and look to the future. And the future is its really bad now and will get less bad Going Forward and markets are forward looking. Perhaps the policymakers in some respects are looking at whats happening today rather than the stock market looking at whats happening tomorrow and thats why you still get the policy responses coming through and i expect across many different regions well still get further policy announcements Going Forward, even if perhaps the majority are behind us youre right, and again this is why were a bit more hesitant than we were, lets say, a month or so ago because the instances in china, the example there is that even in an economy, you know, it takes time for Consumer Behavior and the like to start to normalize an important distinction between what policy makers and what the market are looking at in term of time frame versus the future thats all we have time for. Graham secker, thank you for joining us jeff, well get back out to him a little later in the show. Coming up on street signs, crude craters as u. S. 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