nejra: good morning from london. this is "bloomberg daybreak: europe." a more than today low for a while as demand crushes the global benchmark. an opec scholar firms commitment , -- opec-plus call reaffirms commitment. the senate passes new pandemic relief funds. nancy pelosi joins us today.

and the strongest result in history amid the outbreak. manus: warm welcome to the show. we are deep in earnings season novell.a-cola to the first quarter comes in like this. $2.06 billion. that is a beat. on the operating income side, 214 million dollars. significants have a impact in the second quarter. that is what we already know. first quarter results show a 31% uplift in profitability. nobel. akzo you have the input side and the output side.

inputs are going to trickle down . what do you have? good morning. ericsson saying there is no reason to change its target for 2020 and 2022. that's one of the lines from erickson. ,t sees the 2020 market growth lower growth in the second quarter. in terms of the first quarter, 49.8 billion swedish krona, a miss on the estimate of 51.94, but there was some expectation the virus boost for more telecom equipment might materialize later. first quarter growth margin at 14.4%. first quarter adjusted estimating profit at four point 6 billion swedish krona. it is concerned 5g investments in europe are delayed. that is an interesting line relating to the coronavirus. numbers,t quarter

adjusted operating profit comes in at a bit of a beat. the first quarter gross margin at a beat as well. change the targets for 2020 and 2022. manus: let's get into pharma. this is where people say you want to be positioned post-corona. oche, a very comfortable beat for them on the first quarter in terms of the overall sales. line is drawn to outlook. the outlook is concerned -- confirmed based on the current backingnts, they are their current view, sticking firm with that. weittle bit more on roche, will bring that to you. that is it for the moment. we have to get to oil.

just a look at the june contract this morning in london, down 13% at one juncture. floating to hell, born out of a flood of oil. , i sawlook at june wti barrels.e on 6 million we are in a dangerous time as morgan stanley summit up -- sum it up. this market is beyond anybody's control. nejra: did you just bring up $.50? am processing that. stunning moves in oil itself. this has reverberated across other markets. i saw a tweet from nora dale

yesterday saying this seems to be the only asset that is accurately pricing global growth. everything else is rigged by central banks. however, you have jim mccormick saying oil prices exaggerate the equityf global weakness, exaggerates the potential for recovery. something to chew on. read on the screen in asia. we saw the s&p 500 drop 3% yesterday. we are actually edging into positive territory. they have been fluctuating overnight. will they turn negative later? will we see another negative down day in equities? a 600 year yield below handle yesterday. it stays there today. a touch of dollar strength. we already talked about oil, but we saw the wti may contract has rolled over into the june contract. we are seeing losses today, $10 a barrel. brent about -- at that 21 year

low, $16 a barrel. if you look at junk debt, we are not at those highs of 1100 basis points on a month ago. let us get back to our top story. the u.s. senate has passed a $484 billion deal that will restock an exhausted business aid program and provide funds for virus testing at hospitals. the house expected to vote tomorrow. donald trump has said he would sign it. it includes $320 billion for the paycheck protection program, meant to help small businesses keep workers employed. steven mnuchin says it would forably be the last trench the white house to recalibrate if needed. >> there will be a lot more. we are looking at this having a big impact. we would expect this is the last trench, but we can always reconsider that. joining us from new york is annmarie hordern.

what else do we know about the new round of stimulus? click the big chunk is that $320 billion, the paycheck protection program that was exhausted so quickly, just in two weeks. that is going to go to small businesses. the idea, that money is to keep workers employed. it has been devastating to look at the jobless claims. millions of americans out of work. senate, as many senators are at home. thursday we have the house back in session for a formal vote. forother thing is aid hospitals and money to bolster testing for the virus. donald trump said yesterday the on this is just drying and they are going to be working on another stimulus package. that will help more on the front lines. that includes grocery store workers, drugstores, and others providing during the lockdown. this stimulus does not go on

without controversy. we saw that throughout the week with big public companies taking on money, like shake shack. they are going to be returning loan.$10 million president trump yesterday made a comment about harvard. harvard has said they are using money that was directed for higher institutions. they said that money is going to students in financial need, but the criticism for harvard's they have an endowment of more than $40 billion. there has been criticism, but this money going to the paycheck protection program is definitely needed by small businesses in the united states. manus: the president also tweeted, this is yesterday's story about immigration, he's going to temporarily suspend immigration. do we have more detail? >> what he is calling it is a 60 day pause.

would-be immigrants and also the green card process which is notoriously cumbersome. president trump is saying he wants to use this restriction because it would be unjust for americans laid off by the virus to be replaced by new immigrant labor. the scope and timeframe are limited, but there is concern among company looking to hire foreign workers. donald trump said additional restrictions could be on the horizon. that is something everyone is going to be watching. nejra: annmarie hordern in new york. thank you. later we are going to be speaking as the house of representatives votes on the deal, we are going to speak with nancy pelosi. is set forvernment its first major political test of the pandemic. a virtual parliament questioned by video conference with most mps taking part remotely.

foreign secretary dominic raab will be in the chamber. pcv policymakers are holding a conference call today and they must discuss whether to accept junk-rated debt as collateral. the move is intended to head off bonds cut below investment grade. rating isedit set to be reviewed. without concrete proposals on how to finance economic recovery fund, it raises the chance of another inconclusive showdown. a roadmap contains no details on the amount, specific objections, and the timeframe of the investment. today, turkey is likely to lower its interest rates for an eight time in less than a year. the central bank has delivered a bigger than expected cut at most meetings since its new governor took the job last july. consensus is for a 50 basis point move.

the decision is at midday london time. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. manus: there is only one discussion. it is the oil crisis. the opec-plus ministers gathered for an impromptu call after the market collapsed. things are out of their hands. we discuss up next. ♪

manus: this is "bloomberg daybreak: europe." let's give you a snapshot of the risk in markets. inextricably linked to oil. asian stocks giving back a third of 1%. the s&p 500, a great note coming from j.p. morgan. 2021 forghs again in the s&p futures. stocks a buyerre ious trade? a vicar the dollar stronger this morning with the yen, a little bit of movement on dollar-yen. 7%.x crude for june down the oil rout continues. lowest in 21 years. wti below zero for the first time in history. futures for june, delivery fell.

selling pressure intensifies. the oil ministers of opec-plus to hold a conference call tuesday to discuss the collapse in prices. several producers held informal talks. despite the group reaching a deal for record production cuts earlier this month, a closing statement signaled they are ready to settle -- they did not seem ready to settle on any new policy measures. we have oil volatility through the roof. puts getting record highs and lows respectively. what i have created in my chart, it is in my terminal, is the relationship between the s&p 500

and wti. i have tracked it over one year. what we are seeing is again there is that symbiotic relationship. it broke up, but it is back. how shaken are you by the risk redux in oil? >> good morning. regarding what you are mentioning, it is a stable correlation. to better price in the position on the one hand, but the ,volution of the oil price usually the demand depends on the economic situation, but it magnifies the collapse in demand for oil, it magnifies the economic cycle and the magnitude

of economic cycles. theres why would say yes, is a correlation, but be careful. correlation is stable. the collapse we have in oil a new legld have down. great to speak to you this morning. yesterday, there were tweets saying oil is the only market that accurately reflects global growth because other assets are rigged by central banks. pricesormick said oil exaggerate the level of global weakness, equity markets exaggerate the potential for recovery. your view on which market is accurately reflecting global growth right now? >> it's a very good question. , there is no perfect

answer to this key question. the market is dislocated by interventions. as a result, it is very difficult to find the asset class reflecting perfectly the economic situation, the dynamic economic situation. have the equity markets and the oil market, to fine-tune what is priced by the market today. way a better in a situation, better pricing of the economic situation in the currency markets. as currencies remain very strong , if you look at gold, we had some strength there.

probably i would look at currency exchange rates, --ecially for most currencies. manus: you also talk about the. the need for liquidity and cash. what does that mean for what clients are doing? >> i would like to come back on your point by saying cash is king. i'm not so sure about it. thecially when you look at strategic approach. , --richer you get from cash then when you stay invested in

cash, you destroy your principal. does not make sense to stay invested in cash. cash just is a wait and see asset class, just for a very short period of time. me, cash is not so much king for asset allocation. long-term, taking profits today thanks to this very tough situation in which we are. manus: we will return to the topic. bit later this morning,

we are speaking to the executive director of the international energy agency. don't miss the interview. that is the group that demolished the demand expectations. coming up, locked down and chill. adding a record number of paid subscribers. ib nejra and i suggestions for netflix.

nejra: this is "bloomberg daybreak: europe." its strongest result in history as it cashed in on lockdown around the world and added 15.8 million paid

subscribers. the streaming company also warned investors the surge may come at the expense of growth in the months ahead. another interesting thing for netflix is that the unintended benefit from coronavirus when it positive quarter of free cash flow since 2014. when you look at equity markets, what are you savoring? do you have a preference for large caps in tech or are you focusing more on companies with strong balance sheets and free cash flow? >> i would say both. our locationrding within the equity markets, we prefer the most resilient companies. with low leverage in orders to make sure the company will be able to crush this task.

the second thing i would like to mention about netflix as an pray forwe continue to growth. within equity markets. regarding netflix, it is something you can extend to innovative companies taking profits off this very touch period. , weuld say to summarize like a low leverage and we favor large stocks. one of the things we have been exploring throughout the week is the consistent threat of deflation. it is really apparent if you look at the breakevens.

the 10 year breakevens below 1%. my question is, where do you want to avoid the deflation threat in the equity story? >> once again, growth stories and growth stocks. probably four years, but i companies in a win-win situation. to -- companies, the idea is to continue to inflate balance sheets. margins are under pressure. youwill need everything have it your disposal to reinflate your margins.

are veryechnologies helpful for all companies to help maintain high margins. , regardingr hand , maybe we need for example tracking as we do in china or south korea. once again, the big tech players should be the winners. you need to use a very powerful macro computer. ofrything is in favor innovative companies. much.thank you very the message is loud and clear.

stays withdonay nejra and i. we have another ceo conversation coming up. ♪ coming up. ♪

manus: good morning from bloomberg's middle east headquarters. it is "daybreak europe. brent crude falls to a more than two decade low as demand crush hits the global benchmark. an impromptu opec-plus call gives us significant cuts, but no new action. the u.s. sees its biggest daily tally of new coronavirus

infections in almost two weeks. the senate passes a pandemic relief fund. nancy pelosi joins the bloomberg team today. netflix posts its strongest result in history. but warns of future subscriber slowing. headwinds will have a significant impact. there lies the guidance. these results. some are sinking fast and others are weathering on the vine in terms of guidance. good morning. nejra: we have all been absolutely stunned by the moves in oil. we start to ask ourselves, how much is this going to reverberate through other markets? when you look at junk debts, the spreads widened. drawn to a comment from jim mccormick saying oil prices exaggerate the level of global weakness, equity markets exaggerate the potential for recovery. is the truth in between? morgan,f you go to jp

suppression of rates is ultimately going to drive much more than the loss of earnings. eye of a we are in the risk redux. brent is down a crushing 15%. moves inanley say no supplies can offset this destruction. it is outside the control. aat caught my eye is there is $.50 trade in 6 million barrels. there is a lumpy zero rate wti trade. the dollar.es us to the s&p 500 clawing onto a green gain. 2739 -- getting my words out. will retest records

in the first half of 2021. the dollar is bid as we see a haven. 10 year yields at the low of pretty much counting back to record lows. the five-year paper has made record lows. at the eye of the risk storm in the bond markets. i found those comments interesting because i saw other comments yesterday about the fact that oil is accurately reflecting global growth. every other market is rigged by central banks. we will pick up on that is the show goes on. to an update on coronavirus, the u.s. senate has passed a deal that will restock an exalted small business a program and provide more funds for virus testing at hospitals. the house is set to vote tomorrow and donald trump has said he would sign it. it includes money for the paycheck protection program, meant to keep small business

workers employed. steven mnuchin said it would tranche butthe last the white house could recalibrate if needed. >> we look forward to this having a big impact on the economy. we expect this is the last trancvhe. we can always reconsider that. quarter results down 38% year on year as the covid-19 had a negative impact on the tv and media unit as well as lower pension refunds. service operations are on the upside. increase data traffic on six networks. 20% on normal. let's get to the ceo, the acting

president at the moment. first quarter earnings. great to have you with us. thank you for joining us. i had a question with -- a conversation with the man who used to run your company. he said the biggest issue for telecoms operators is the difficulty in monetizing the upsurge in line usage. are you having difficulty taking advantage of the surges your seeing across the business? >> good morning. that is exactly what we have been focusing on the last nine months. this is actually a good quarter. we grow our mobile business 1% -- it is ourur third consecutive quarter with growth. we have started to be more commercialized in driving our business, thinking about how to utilize the networks and being closer to the customer, which

makes our offering more relevant. to betough in these times too positive, but we are having the first quarter in several years where we are flat on revenue. what we havete every year. we have the first time in many years we have mobile growth in sweden, which is our biggest market. that comes from the combination networks, theood , andsurgically detailed i'm super happy about it. off is why we are taking the tv media which we knew could have an impact is doing well. not want to burst

the bubble of your happiness. i do have task about the potential effects on the rest of the year and beyond potentially of coronavirus. you did give an update in late march. i believe you said then pandemic related effects will result in a 1.5 billion swedish krona ebit drop year on year in the media business. can you give us any kind of update on the outlook for the rest of the year as a result of the pandemic? >> and that is true. , it ism in media definitely affected by the sports and the advertising downturn. 1.5 billionllion to that comes through. been ok with the situation, so we continue to guide on the cash flow. we have lowered one billion from

10.5 to 11.5 to 9.5, 10 .5 guidance for this year, about our dividend rate we have right now. difficult.very we will have economic downturn. have tv distribution that will impact, but we will mitigate and work hard with the best networks to monitor this and handle this. cash flow, fine. even today, softer to give guidance on. you cut the dividend. autumn. have an egm for with the guidance you have just given us and the robustness you say the company is in, when will that dividend be restored? is there risk of a further cut?

they do not tie up for me. >> we have not said we will come back with egm. we have said if things clarify and we still have stability we had before corona, we may come back. that is not decided. nowkey messages that right we have stability in our core business and we do not know how fast the corona will make the advertising market come back. we will have to wait and see. the key message right now is now we have a dividend we promise of 7.4 billion and we have a cash flow guidance this year of 9.5 to 10 and a half. we do not know how the economic outlook will look later on as well. if we need to be cautious. for all of us, it is a day-to-day operation to see where it is going.

ericsson set earlier this morning the pandemic may setback european 5g rollout. has been pausing 5g development. what can you tell us about your spending plan on 5g? >> one of the main risks we see going forward in our crisis management is the supply chain and wellness, of course. we monitor those very carefully. on supply chain, we have only seen effects from more expensive transportation. goods are available, but you have to pay more. do you want to pay more? phase,that in the second it will also be a component shortage that may affect there. and others out

the most obvious, norway is on plan. we have agreed there is no obstacle right now. the swedish rollout unfortunately, most of the license option in sweden is not until november. we will see if supply issues will be handled. that is how we look at it right now. thank you for being with us this morning. , we wishhe acting ceo him well in this tough time for anybody, and for italian banks as well. unicredit have to take a $900 million loan loss. this is the first quarter, they reaffirm their capital buffers. that is confirmed that 250 basis points. they talk about first quarter risk, so they are taking these additional losses.

italy in the eye of the coronavirus storm. arespreads over bunds widening and the risk is very you could have junk status for italy. let us get set up for the rest of the trading day. this is what is on the agenda. 12:00 p.m. u.k. time we are going to get the turkish central bank rate decision. it will probably cut interest rates by 60 basis points to support the economy. in the u.k., boris johnson remains out of action recovering from his own severe case of covid-19. raabgn secretary dominic is going to speak during prime minister's questions at 12 :00 noon u.k. time. tarmer will be in the chamber. most members of parliament are

taking part by zoom. over to the u.s., earnings season continues. at&t, baker hughes. lastly, we have the 50th anniversary of earth day. celebrating that. plenty more to come. ♪

>> it is an extraordinary situation. you sell the numbers from yesterday. i don't think anyone in my lifetime has seen anything like that. we are taking aggressive but appropriate steps to help the industry and help this economy get through the pandemic. one of the steps we took was to open the strategic reserve, make

the storage available to the industry. that drove pricing yesterday. the folks who were closing out those futures contracts could not take possession of the oil because they had no place to put it. an acute concern throughout the industry. we have contracted to take 23 million barrels of oil, put that into the strategic reserve. you saw the president's tweet. we are going to work with theetary mnuchin to look at facilities congress has given us the authority to create. there is a federal reserve facility as well. to ensure that those are available to the industry -- the energy industry as well, we are making sure the folks in the producing community have access to those types of loans, that type of liquidity. that is another acute concern we have. >> as you go about approaching

this question, how do you strike a proper balance? you said it before. you want to maintain a free enterprise system. you do not want the government controlling these markets. on the other hand you have to save the energy industry. how can you preserve private sector at the same time? >> it is a difficult balance we are trying to strike. the market is ruthlessly efficient at weeding out high cost producers. in america we honor the free market system. it is what has brought us to where we are as a country. that is a free and independent nation. we want to continue that. that being said, there are market anomalies from time to time. no one could have predicted the impact of this covid-19 pandemic. as we talked about in the past, the demand curve has moved so quickly in a downward fashion that the production is simply not able to keep up with it. it is not able to ramp down as quickly as the demand curve is

ramped down. we are dealing with this oversupply of oil. our intent is to look at what we can do, things like storage we just talked about, but also with regard to some of the things congress has provided this industry. taking advantage of, perhaps, deducting losses that are incurred against the last five years of profits. those are important liquidity tools we are going to help the industry take advantage of. >> what about curtailing supply? that is, banning imports of oil. that is something that has been mentioned in the press. >> the president has not taken any options off the table. he will continue to evaluate the situation. at whatever time is appropriate, he will make those decisions. he will avail himself to any option available to him to support an industry through this pandemic. with regard to oil, it is

important to remember certain refineries in the units are set up -- in the united states are set up to take certain types of oil. there is a difference between being dependent on imported oil and simply trading oil, which is what you see today. importfiners choose to heavy sour crude because that is, for them, the most efficient way to maintain a profitable status for their businesses. but that is trade that is not dependent on the imports. that was the u.s. energy secretary on the steps the u.s. is taking to help oil companies during the current glut in supply. droprecipitous reverberated through equities. asian equities recouping losses. green on the screen for u.s. and european futures. elsewhere, havens bid. the anna little bit higher.

wti below $11 a barrel on that june contract. brent at a 21 year low. ♪

nejra: this is "bloomberg daybreak: europe." in the u.k., boris johnson's coronavirus strategy faces its first little test. the u.k. was put on lockdown a month ago. the prime minister remains out of action recovering from covid-19 and will not be in the house of commons to answer questions when parliament resumes its scrutiny of the government's plans. dominic raab will face a new u.k. labor leader while both will be in the chamber in a historic first. most members of parliament will be taking part by zoom videoconferencing technology.

european central bank policymakers will hold a call in the evening where they may discuss whether to accept junk rated debt as collateral from lenders. the videoconference could be intended to head off concerns that sub sovereign corporate bonds will be downgraded to noninvestment grade because of the cost of fighting the coronavirus pandemic. fallen angels in other words. manus: the italian prime minister joins a chorus of european nations purporting as much as 1.5 trillion in joint bonds to help economies crippled by the virus, headed for a clash at the european summit. christophe, the fed justified buying junk bonds or fallen loretta mester. there was no hazard. will the ecb be able to pass

through the storm and actively by junk rated paper in europe? would you prepare to trade? yes, we need it for a common reason whether we are talking about the u.s. or europe. to avoid a credit crunch and a cascade of default in the corporate sector. everything is on the table. briefly, forvery needil sector, you intervention to avoid a cascade of defaults in the shale oil sector. country, we the

need other government or -- measures. for europe, the ecb were intending, because it is the only common tool we have in europe. you have the fiscal union, the political union, the monetary union. the key in europe is the monetary policy. in europe, and i mean the euro zone, we will have strong intervention by the ecb. would you be buying btp's right now with those spreads having doubled since mid-march? at for theooking time being. because webuy it yet need probably to go further in terms of how to find public deficits. italy, public deficits are

growing very fast. at a point of the time, we will need ecb interventions. to finance public deficits in europe. then it will make sense to buy btp's. soon, as long as we don't have an agreement between countries. great to have you with us this morning. thank you. europe." for "daybreak european futures and u.s. futures firmly on the front foot head of the european market open. ♪

matt: good morning. welcome to bloomberg markets. this is the european open. i am matt miller in berlin. the markets say take a step back. a two day rout in oil. u.s. stocks fell 3%. futures are pointing higher here in europe and back over in america as well. cash trade is one hour away. here are your top headlines from the bloomberg terminal.