♪ ♪ >> delaying the payout. ubs and credit suisse pushback half their dividends on advice of the swiss regulator. we speak exclusively with ubs ceo sergio ermotti. global coronavirus cases top 1.5 york and u.k.ew report their deadliest days yet. and oil extends gains ahead of whichs opec-plus meeting,

could close with an agreement to cut output. russia says it is prepared to cut as much as 15%. let's get a check on markets. we are seeing quite a bit of risk abbett -- risk appetite, given that we don't see signs of a peak in cases globally in the epicenters of coronavirus. dax up 2% and the futures pointing to gains. the s&p 500 technically went to pool territory. -- bull territory. will initial jobless claims put a stop to the rally or will they shrug off the numbers? one market is perhaps telling a different story. the dollar is steady in today's session. gains, someg some

optimism ahead of the opec-plus meeting in oil. generally a bit of a risk-on tone across markets. bloomberg first word news. vicena: former u.s. president joe biden is the presumptive democratic nominee for president after bernie sanders suspended his campaign. he thanked supporters for helping create an unprecedented grass-roots movement. stays says he will on the ballot to help democrats closer to his vision. oil gaining as top producers appear to be nearing a deal, russia saying it is prepared to cut by 1.6 million barrels a day. an opec-plus meeting will be held later to discuss the cuts. algeria holds the rotating presidency of the cartel.

when they announced their emergency rate cut in march, fed officials already were talking about a new program to cushion the economy, according to the minutes of their much 15 meeting. officials were split over how long and how severe the downturn would be, but there were concerns the crisis could put further downward pressure on inflation. speaking of inflation, christine lagarde, ecb president, has made a strong plea for inflation and urged governments to get over their differences as they prepared a second round of -- for a second round of talks. the comments came in an op-ed published in newspapers across europe, a day after ministers failed to agree to a rescue package. saudi arabia's sovereign wealth fund has taken stakes worth $1 billion in european oil majors, including total. shares were bought on the open market, and the investment fund

may buy more. no comment from the companies. powered by more than 2700 journalists and analysts in over 120 countries, this is bloomberg. nejra: thank you so much. global coronavirus cases top 1.5 million as germany hit a record one-day death toll earlier this morning. u.k. and new york had the same tragic milestone on wednesday. prime minister boris johnson remains in intensive care, but the chancellor says his condition is improving. wall street banks are warning of a $5 trillion hit to global growth. joining us is the ceo of unigestion. just, given what i outlined in terms of global coronavirus cases, not really a sign of a peak and what wall

street banks worn in a hit to growth, is the rally we have seen so far in april that has taken the s&p 500 into full market territory going to fade? -- bull market territory going to fade? fiona: thank you for having me. first of all, i would say the correction was very strong and the rally that followed was also very strong. we still believe there is uncertainty in the markets. all sectors. remember, in 2008 it started with financial and real estate. 2001, technology. this is the first time we have a correction that is global in a synchronized way. so i think we have more uncertainty going forward, because as you say, the crisis is still not finished and we don't know when it is going to finish. it has a profound effect on the

economy, and we don't know how long it will be locked down as it is now. nejra: fiona, you point out that markets were driven by liquidity risk in march. are they going to wake up to profitability risk in april? fiona: absolutely right. march was really scary, because you had two effects. the macro shock plus all the liquidity risk that followed, with even treasury bonds becoming quite illiquid. i think central banks around the globe have done whatever it takes to keep that under control, quite successfully. he liquidity risk in march has retreated in april. nevertheless, april, we don't know for how long the economy will be closed, and every week

terday,es on -- yes france said every two weeks so you canf the gdp, imagine the shock -- 15% of their gdp, so you can imagine the shock is not finished. nejra: so outline what you mean defensiveay you are but seek out only the most attractive opportunities? what does that look like in a portfolio? fiona: we still have a position in investment grade bonds, because they benefit from the central-bank policy, and remain prudent in equities. we see volatility going up and down in the next month, so we thein in equities but in most offensive part of equities, on a strongplaying rebound of the economy. nejra: ok. so you aren't really playing on

a strong rebound of the economy. we were saying some wall street banks are warning the global economy of the next -- over the next two years could take a hit of $5 trillion to gdp. are you factoring in that sort of macro outlook, core at this point is an outlook like that not that useful given the uncertainties ahead? neil: i still think the outlook is -- fiona: i still think the outlook is not very useful, because we don't know how long the economy will remain closed and all these numbers are very dependent on when the economy will be reopened, and will it be capable of staying open? because if there is a second wave of coronavirus coming, he would have to close again. uncertain, the projection of the future. what we know is that in a best-case scenario, we factored in the economy closed for two months, then a slow restart.

and that's still, we don't know that, that is a best-case scenario. nejra: fiona frick, unigestion ceo, staying with us. up next, solidarity is self-interest, according to ecb president christine lagarde, crisis spending. and as ubs delays part of its dividend, we discuss with ceo sergio ermotti. our exclusive conversation is later. this is bloomberg. ♪

♪ nejra: this is "bloomberg surveillance." in london.ehic biggesterland's two dividend pushing back payments. credit suisse will pay half of

its 2019 dividend and distributes the rest later in the year. ubs plans to pay a dividend in two installments and expects of about $1.5-- billion. disney's streaming service has topped 50 million subscribers, relying on a low price and a wealth of family-friendly content. over the last week, disney plus launched in eight european india,ies and part of their three-pronged platform including espn and julio -- hulu. not yet in at is position to accurately assess the impact of the coronavirus pandemic, and is withdrawing guidance on net sales and profit growth for the year. diageo already returned about 1.25 billion pounds to the first phase of its buyback program. nejra: viviana, thank you so much.

as eurozone finance ministers prepared to hold further talks today, christine lagarde renews a plea for a strong fiscal -- ♪ ♪ ♪

♪ ♪ this is "bloomberg surveillance." still with me is fiona frick, ceo of unigestion. we had commentary in an op-ed from christine lagarde of the ecb yesterday, pushing for physicals averse -- fiscal support as we still wait for a decision on how europe moves forward in tackling the coronavirus crisis. earlier, you were saying in your defensive portfolio you look for selective opportunities, for example u.s. investment-grade because of the fed corporate purchase program. are you taking the same approach in europe, in fixed income,

based on what the ecb is doing? fiona: yes, but mainly in investment grade, and good-quality investment-grade. difference between good investment-grade and investment-grade that could become high-yield, which we think is very risky and has liquidity issues, so we stay on the very good side of investment-grade in europe. nejra: if you look at european equities, fiona, over 100 companies in the stoxx 600 have suspended or delayed dividends. far fewer u.s. companies have done that so far. does that make european companies at all more appealing in this environment, where a lot of investors are focusing on balance sheet strength, particularly with lack of visibility on earnings? fiona: it's a good question. there are two answers to that. the first one is that europe moved to cut dividends, but the

situation in europe before the covid crisis was already less while the less growth u.s. had 1% or 2% growth. in terms of valuation, european stocks are cheaper than u.s. stocks, but in terms of the economy the u.s. was stronger before the covid. the fiscal plan in the u.s. is strong, while in europe we are still negotiating. are from fiscal banks, and central the u.s. is in better position. nejra: ok. how much emphasis are you putting -- focus are you putting on data like initial jobless claims? of all the data you are watching, is that a crucial one for you? fiona: yes, it is a crucial one. the other things, earnings

estimates, which will be very important. q1 coming next week from the first quarter. these numbers are a leading data.tor of the economic fora: how bad could it get company earnings in the u.s. and europe, for the rest of the year? again, there is a lot of uncertainty because it depends on the duration of the lockdown . 35% to 55%e a contraction in earnings for the year. nejra: thanks so much for joining us. unigestion. ceo of as we said earlier, wall street banks worry the coronavirus pandemic could rob the global economy of over $5 trillion of

growth over the next two years. that's greater than the economy of japan. the chairman of goldman sachs asset management, sheila patel, spoke to me earlier about the recovery of different sectors after being hit by a virus. let's -- the virus. let's take a listen. growth, butxpect the order of magnitude has not resonated with us yet. we are extremely focused on the question of rolling recoveries. some sectors will rebound more quickly, while others lag significantly. to speaking after a multi-country tour. in this case, all of it is coming from a desk chair. but after speaking to people on pretty much every continent every day except for maybe antarctica, people are truly looking for the opportunities, but dealing with the uncertainty

of timing. there's no question that some industries will take quite a bit of time to come back, say the restaurant industry or travel. on the other hand, manufacturing could resume sooner. we could see rebounds in transportation, given current levels are so low, although getting back to the prior high levels will be difficult. we will see some geographic disparities. so i think it makes for a very uneven next couple of years, given those unknowns, but not one without opportunity as well. nejra: absolutely. so sheila, as you have done your global tour, albeit perhaps more remotely at the moment, what is engaging from clients in terms of their appetite for risk? are they wanting to hold cash and sit on the sidelines right now? are they concerned with capital preservation? or are they saying please go out and find those opportunities for us, with the recent selloff we have had, even though of course the s&p 500 is technically right

now back in a bull market? sheila: every client wants to talk about the investing environment and management environment. they are all struggling to support their teams and vet new ideas to put money to work, having the whole teamwork remotely. manye institutional front, of our clients came into 2020 expecting a challenging environment or even recession and had raised cash. so they came in with some money that could be put to work, but now you need to consider where. i would say it is more measured in the u.s. money has been put more quickly to work coming out of asia, parts of asia, as well as say the middle east. the focus is really been on the opportunistic side of it. so if you think about where people were in equities, versus where they are today, from the institutional side and the retail side there is significantly less exposure.

patel,that was sheila goldman sachs asset management chairman, speaking to me earlier. let's look at key events to watch out for today. 12:30 p.m. you -- u.k. time, we get the account of the bank of think when meeting. investors will scour it for efforts to tackle the economic fallout of coronavirus. we will get initial u.s. jobless million,orecasted at 5 the second-highest on record. at 5:00 p.m., we get an update from the british government at its daily coronavirus briefing. prime minister boris johnson's health is likely to be a central question. to delay, as ubs seeks part of its dividend, we speak to ceo sergio ermotti. and green on the screen looking at the markets. stoxx 600 gaining over 1%.

we see that across a lot of benchmarks. yesterday the s&p 500 temporarily in bull market territory. u.s. futures-- point to another day of gains. the 10-year yield slips, the dollar is fairly steady and oil on the front foot ahead of the opec-plus meeting, with positive signs from russia in terms of the outcome. this is bloomberg. ♪ ♪ to help you stay informed of the latest news

just say "coronavirus" into your xfinity voice remote to access important information and special reports from around the world. and to keep your kids learning at home, say "education" to discover learning collections for all ages from our partners at common sense media, curiosity stream,

history vault, reading corner and many others. for more information on how you can stay connected, visit xfinity.com/prepare. nejra: delaying the payout, ubs and credit suisse push back half their dividends on advice of the swiss regulator. we'll speak exclusively with ubs ceo sergio ermotti at 9:30 a.m.

. global coronavirus cases top 1.5 million. wall street warns of a $5 trillion hole in the global economy. new york and the u.k. report their deadliest days yet. and nearing a deal, oil extends gains ahead of today's opec-plus meeting as top producers close in on an agreement to cut output. russia says it's ready to cut by as much as 15%. welcome to "bloomberg surveillance." i'm nejra cehic in london. let's get the first word news with viviana hurtado. viviana: we begin with boris johnson. his condition is improving. he spent a third night in critical care in the hospital. officials are drawing up plans to extend the lockdown to control the u.k.'s growing coronavirus crisis. over the next week, it is protected the outbreak will peak. now to questions about how quickly nations can relax their lockdowns after a rise in new infections in italy and spain.

the restrictions are devastating economies. germany is expected to slump almost 10%. that is the most since records began. global coronavirus cases now topping 1.5 million. more than $5 trillion in the global economy growth wiped out by the coronavirus pandemic over the next two years, and that is greater than the annual output of japan. they warning coming from wall street banks as the world plunges into the deepest peacetime recession since the 1930's. even with stimulus, global gdp is unlikely to return to trend until at least 2022. the end with starbucks. at least six months of pain, and despite the stark outlook, starbucks as the headwinds are temporary. they can be readers -- they can be reversed over the next two quarters. there is evidence that business in china will fully recover.

global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. nejra? nejra: thank you so much. let's get the latest on oil. crude is extending gains as they world's top producers appear to be moving closer to a deal to slash output. russia is signaling it is ready to make cuts as a producer nation faced up to unprecedented slump and demand. joining us now is jason gammel. great to have you with us on the show. is the oil market getting ahead of itself, rallying ahead of the opec-plus meeting? jason: i think it is, nejra, and is biggest indicator tha significantly higher than the daily risk. the differential right now is over $15 a barrel. that is an indication that the

paper markets are not in communication with the physical market as much as they should be. jra: how bleak is the outlook for oil prices, jason? you recently updated your forecast. jason: it is pretty dire. the volatility prices are quite high as well. we are looking at demand the 12tion being in million barrel a day range in the second quarter. a 10 million barrel a day cut in opec still leaves you in an oversupplied market. that makes it very tough. we have a $35 forecast for the second quarter, but i would say the risk is downside. nejra: if you look at the oil majors, then, what does that mean in terms of the outlook for buybacks and dividends? believe, eliminated

all by and dividend increases in your models through 2025. is that a little bit aggressive if you do expect some kind of recovery in oil prices before 2025? aggressive, but the key considerations are more related to the depth and duration of price downturn. if oil prices stay below $40 a barrel for an 18-month timeframe, a balance sheet repair will be a high priority for a a lot of these companies. the existing dividends are safe, but the past two dividend increases are -- it is a little difficult to see at the current time. nejra: interesting that you say that current dividends are safe. you are not expecting dividend cuts. is that just for the super majors or across the industry echo jason? jason: it is primarily for the

super majors. i think that the actions that we have seen from the big ,ntegrated companies eliminating buyback programs and cutting a percent plus, leaves them in a position of very strong liquidity. given that the dividends are the highest financial priority, that is why i think it is safe. nejra: who of the companies that you cover has the most capacity for capital preservation at this time? who would you highlight become a priority for these oil majors? who has the capacity to preserve that capital without hurting future growth? jason: i think chevron is in the best position within the industry. it starts the downturn with by far the strongest balance sheet in the sector, and that is -- on the balance sheet is pretty important right now.

i would say that hotel is also in -- that took how is in -- totale is in good shape. .ejra: ok do these companies that are going to be cutting -- do they have the levers to pull in terms of preserving that capital the ? yes.: broadly speaking, capital programs do not have a lot of major capital projects right now, spending that is contractually obligated. so it is still painful. they will be cutting back on the shorter cycle projects that would generally have high rates of return, but i think at the current time the market is not really looking for more barrels of oil, and i'm not sure that they would be rewarded for making those expenditures anyway. we think it is better to preserve that capital and keep the balance strong. nejra: what will be the

long-term impact of all this on u.s. production, jason? well, i think that we are going to see a significantly lower trajectory and growth at least for u.s. shale. a lot of it is going to depend u.s.w badly affected the sector is. they do not have a lot of access to the capital markets. if we do see bankruptcies, that will require consolidation. i think shale is here to stay, but the growth rate in shale will be significantly less then what we have seen over the last several years. nejra: great to have you on the show today. make you so much, jason gammel, senior oil analyst from jeffries. former treasury secretary jack lew says america needs to spend whatever it takes to stem the economic impact.

jack: i have to say that the whole need for the response here is immediate, in the sense that we shut the re-economy down. we need to make sure that these business -- we shut the economy down. we need to make sure that these businesses are there to open it back up. i would love to be able to say i was dottedtter and every t was crossed. businessl be so many failures that the length of the recovery was extended, the depth is deepened. half of american workers are working in small businesses, and we need them to be able to go back to work when health conditions permit it. i think time is of the essence. i thought that the funds were the funds that were put in were helpful, but i did not think it was adequate at the time when you think of the number of businesses that need help. i'm not surprised that they are

considering more assistance. what i'm trying to add in the thinking process with the comments i am making is when the green light comes to open up, there has to be cash flow to reopen. there is going to be a need that continues some of the assistance a little longer than the health crisis, just like there will be a need to help people that are unemployed with extended benefits and food stamps, other kinds of assistance. as long as the economy is lagging behind because of the health crisis. more stimulusver and spending their is done, the government will have to borrow a lot of money. that means a lot of issuance from u.s. treasury. might that change the way issuance is done? for example, should we reconsider something like an ultra long bond? some people even suggested may a war bond. president trump suggested we are

at war with the virus. jack: i think we need to be open to using the whole yield curve to finance this huge increase in debt in the most efficient way possible. i have never been persuaded that the 50-year bond is likely to have the kind of deep market that could be relied on. this feels like a dangerous time to run an experiment on a major scale with a new concept. unique, very well developed markets. we can go long and short, and i think the demand for the u.s. debt will remain strong in the global economy that we are in as long as it is clear that we are responding to this crisis and that we have the resilience to bounce back. ithink that the place where am worried about the financial shortfall being crushing and without federal assistance there will be terrible consequences, is at the state and local level.

they operate, many of them, with balanced budget requirements. if they cannot fill the holes in their budget because of sales tax revenue being off, because of gasoline tax revenues being off, and because of income taxes being off and delayed, they are going to start cutting back on vital services, and they will be canceling things like road programs, and that will have macro economic consequences. overall, i have spent most of my career worrying -- and i continue to worry -- about the long-term sustainability of our deficit and our debt. i do not believe that this moment, if we are penny wise and pound foolish, it will be a good thing. we are going to need to spend what it takes to come out of this healthy, that the long run will be greater and the deficit will be greater. going into markets to make sure that we maintain the depth and

liquidity for what is an extra ordinarily large increase in federal bonds. was former treasury secretary jack lew. -- we will speak with sergio ermotti. don't miss that exclusive conversation next. this is bloomberg. ♪

>> this is "bloomberg surveillance." we have had first quarter guidance from the swiss bank, ubs. the 2019 dividend is to be cut

in half. better half a dividend and no dividend at all. pressure from the swiss financial regulator on this topic. let's get to ceo sergio ermotti. good to have you with me this morning. the dividend is split. i want to get a sense of how tough a negotiation this was with the regulator, or was it quite a bit of pressure to get there? sergio: first i can tell you thatwe reiterated clearly they stronger capital funding weition and the business have would have allowed us to confirm our dividends. fema to request from consider the situation, reconsider the situation. intook the decision that order to balance the interest,

weluding our shareholders, took this decision to split our already announced dividends. 2020 dividend a buyback program at risk as a result of this move? sergio: i think that it is -- first of all, we already announced that we would suspend following theack second half of the year, and the coronavirus situation has only confirmed that it would not be do shareo continue to buybacks. the share buyback team has already been postponed to the late part of 2020, or for the noure, so there is no topic, discussion on that point. also for that when he 20

dividend, it is too early -- also for the 2020 dividend, it --too early to think prudently we have to have a strong capital position and serve our clients at length where appropriate and necessary, but also we will take into consideration the needs of our shareholders in terms of capital returns. so this is going to be a balance -- we can only consider at the end of the year. manus: you give some guidance in terms of first-quarter earnings, $1.5 billion in the market, penciled in a lower number for you there. if may a sense of what kind of lending to the wealth management side of debt give me a sense of what kind of lending to the wealth management side of -- give me a sense of what kind of lending to the wealth management side you are considering. sergio: with a strong operating

performance, our lending activities have been varying in across businesses, across personal banking and corporate banking in switzerland, where we have been helping to speed up the process of releasing liquidity to sme's, to larger workinges, and we are , billionsth the u.s. of loans through the paycheck protection program. saw demand for loans and ,reated in the investment bank and also in the wells management space, we saw some deleveraging coming through, but also new which has credit, contributed for sure to an increase in lending balances.

can i ask you, sergio, in terms of the markets, we are back in bull territory on the decks and the s&p 500. do you think that this -- on the dax and the s&p 500. do you think that this turnaround makes sense as a verlyn return to the bull market? sergio: i think you should not try to rationalize too much in the last few years. that would be a struggle. in my point of view, it is clear that it is good to see markets rebounding, but on the other end, i do think that the market expecting -- and betting a recovery in the late part of this quarter. and then a recovery in the second part of the year. i would say that there is, in my point of view, a downside risk

to that scenario. be in that sense, i would getting too much exposure in equities at this stage. manus: jamie dimon warned of a bad recession. echoes of 2008. do you see any echoes of 2008, sergio? where is the systemic risk in the world today? all, ofwell, first of course you have risks on both sides. a sense, it in could well be that we would see a very welcome v-shaped recovery. on the other end, you can see severe downturn on the economy. i do not think anybody is in a position to call exactly what happens. uncertain he is still the main

driver, will be the main driver for the future, for the near future for the markets, and also together with fear, and in that itse, you know, i think that is very difficult to make a forecast about how the situation will develop. manus: ok. when we last spoke just a couple of weeks ago, we spoke about credit, and you said management do youcredit spread -- see that still as the case, and where in credit would you be ingesting the opportunity? sergio: first of all, i think there is still some value to be picked up in selective situations, but if you look at it today, there is a better risk , because i think

areably credit in markets more critical or more realistic -- how quicklyly the recovery can materialize. in that sense, we continue to ,ee more opportunities particularly in the u.s. with high-yield and investment grades, and to some extent in emergent markets, sovereign debt. manus: when you look at the fed policy response, sergio, do you -- are wethat as there yet with the fed? as io: well, right now, mentioned last time, i think at the fed in general, policymakers and central banks have done a great job in stepping in, not only stabilizing but also

stimulating to the extent that they can at this stage of the economy and also stabilizing liquidity potentials in financial markets. i also think that is -- i cannot see much more that they can do at this stage because there is nothing you can do against fear, and there is nothing you can do against uncertainty at this stage. it is only when things normalize that we will see if and what is necessary to be done. of the money has been spent, and hopefully we will see the results in the next couple of quarters. sergio, you're bringing some of your personal ammunition to bear. you contributed one million swiss francs to your local area. are you setting an example for the rest of the board? will the rest of the board follow you in terms of giving a contribution for coronavirus?

sergio: i think the main thing was trying to set examples -- internally or asked -- was not trying to set an example internally or externally, but the main thing i could do was to give money. in that sense, you know, of in themy colleagues management board have already of their to donate 50% tot six months' salary causes that are related to covid, and in that sense, i don't think that they necessarily need an example in that we are all well united. everybody tries to do what is possible to be done. this is a very difficult environment. usually -- it is

a hugely difficult environment. sergio -- you talk about credit losses, credit valuations. have you any estimate in terms of the numbers that are involved in credit losses in this quarter? how bad could it be? sergio: at this stage we are not really disclosing the details of the quarter. i think that we should look at numbers that we highlighted as a guidance for the quarter. and it highlights that while you may have had some of these elements offsetting the strong performanc of the businesses, they can be fairly relevant -- they can be very relevant in a few weeks when we report our q1 results. sergio, i wish you well. thank you for giving us time this morning on the guidance.

sergio ermotti, ceo of ubs on "surveillance." guyext, tom keene and johnson will speak with christiana george eva. retainingabout capital, the shape of growth and recovery. the risk and rewards is discussed. this is bloomberg. ♪

morning, with the sirens of ambulances receding into the distance, new york city and new jersey record over 1000 deaths. there is a hopeful bending of .elected curve still, this pandemic claims old and young. andme support is too little too late. what can washington do? amid global contraction, the federal reserve and the international monetary fund will be lenders of first resort. good morning, everyone. on a thursday that feels like a friday, this is "bloomberg surveillance," from new york, from the edge of central park, and right next to the very brave people working at mount sinai hospital. guy johnson in london as well. the first-order of business must be, i