>> good morning from london. i am nejra cehic. manus cranny is in dubai. this is "bloomberg daybreak: europe." president trump says the u.s. must reopen even if it leads to more suffering. he will also disband the coronavirus task force. this as the u.k.'s death toll becomes europe's worst. richard warns the economy will need more support. the ecb pledges its full

commitment to reviving inflation after yesterday's landmark german court ruling. disney takes a $1.4 billion hit. bmw joins fiat chrysler and vw on warning for the second quarter. unicredit set aside 900 million euros. we break the full forced quarter members. -- first-quarter numbers. have we have -- manus: we those first-quarter numbers, a loss of $2.71 billion for the first quarter. the market penciled in a number of $1.95 billion. you are bang on the money. they were one of the first to come out with $900 million set aside for covid-19. italy will contract by 13%. this is the challenge for -- they were one of the lead nonperforming loans. unicredit, the stoxx 600 banks index still underperforming. the exposure is a critical issue for all of the banks. we do not seem to have broken

that symbiotic relationship between banks and the sovereign. first quarter loss, $2.71 billion. net profit a year ago. this is a bank influx at the moment. -- in flux at the moment. we are waiting for numbers to come through but you are going to take us through the markets. good morning. nejra: good morning. green on the screen in asia. china is back online. yesterday, we saw again in the s&p 500 cut in half after those comments from richard clarida on the fact that more government support would be needed. in terms of how u.s. futures are set up, we are flat, edging into the green. european futures moving to the downside and of course, that landmark ruling by the german court on the ecb does sort of start to raise the question for some on the meaning of whatever it takes from the ecb. we saw big moves in bcp. we wonder if we will see some stabilization today. we are seeing the yen strengthened so that signals a

safe haven bid, and the oil rally seeing a bit of a fading. morgan stanley said the market has hit peak glut and has started rebalancing. donald trump says the u.s. must begin to reopen immediately even if it leads to more infections and deaths. , trump saidarizona he is preparing for the so-called phase two of the u.s. response to the coronavirus. pres. trump: the people are not going to accept it. they will not accept it, and they should not accept it. we have a great country. we cannot keep it closed. i have had doctors say why don't we close it for a couple of years? this is the united states of america, and yes, will some people be affected? yes, will some people be at that did badly -- be affected badly? yes, but we have to open it soon. nejra: joining us from new york is bloomberg's annmarie hordern. the white house considering disbanding the coronavirus task

force. why would they do that? annmarie: it seems to be all part of this phase two of the trump administration's plan to reopen the economy, and part of that is talks about dissolving the coronavirus task force which we know includes top public health experts including dr. anthony fauci, dr. deborah birx. these are the health experts that steered the government's response to the pandemic and we could see that dissolving as soon as the end of the month. this may well come up with a lot of criticism. public health experts have repeatedly warned about a second wave of the outbreak if restrictions are lifted too soon and that could mean more lockdown faces potentially in the future as well as more economic hardships here at on top of that, what you are looking at right now is it remains to be seen if americans are even comfortable with going back to life as normal. according to analysis from polls by 538, 70% of americans say they are somewhat or very worried about contracting the coronavirus. good to see you

this morning. those numbers are staggering. we have the latest on pharmaceuticals -- on the pharmaceutical side. gilead, for one of those looking to expand manufacturing, but how is that going? annmarie: they put out a statement talking about wanting to really boost and ramp up manufacturing around the world to make sure the drug that could terms ofents in recovery from the coronavirus in asia, europe, and the developing world, they say this requires a lot of close coordination so they are working on building a consortium of manufacturing partners to maximize global supply. on the health-care front, pharmaceutical front, we should mention what is going on with pfizer. they administered the first u.s. patients with this experimental vaccine here and all of these companies are in a race to get the vaccine. the ceo of pfizer said we have ton able to move the --

human testing he says is extraordinary. [no audio] we are going to leave it there with annmarie hordern in new york. the very latest news flash. let me get you up to speed with your first word news now from dubai. the european central bank is defiant in the face of the german court ruling. criticizing its bond buying program. it is pledging to continue doing everything necessary to revive inflation. in a statement, the ecb also noted europe's top -- previously said the qe program is illegal. german judges are giving the central bank three months to prove the asset purchase program is in line with the law. to disney. they have taken a 1.4 billion dollars hit from the coronavirus. and the worst may be yet to come. earnings plunged by more than

half in the quarter. revenue rose 21%. that was driven by the purchase of fox's entertainment assets last year. they seem pummeled particularly hard. one bright spot is we did see a recovery in china. peers inining its warning of a slump. it sees the impact of the coronavirus pandemic lasting longer than expected. it does not see car sales returning to normal in the coming weeks. it expects the second quarter to be even worse than the first. that matches up with the guidance given by ford, vw, both of whom expect to lose money in that period. -- is bearing the brunt of airline comebacks in the u.k.. virgin atlantic is the latest carrier tobacco wherefrom the u.k.'s second busiest -- carrier to back away from the u.k. second busiest airport. british airways is looking at doing the same.

shuttle isir fighting for a bailout to relieve some of the heavy debt. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. working hard for you. quick recap on some of the unicredit lines to get a little bit more detail now. i give you the first quarter loss of $2.71 billion. they are talking about the qualification of these losses as sale,due to the stakes the job exit charges, so these are the two things that have been weighing on the bank and of course, that is their assets in turkey. that is what is referenced. in terms of the actual loan loss provisions, we do get a little bit more detail there as well. you are looking at buffers of capital, 13 point 4%. you are looking at loan loss provisions of 1.26 billion.

they had earlier set aside 900 million. they came early and they announced their early, early provisions of 900 million. it looks like the total provisions come in at 1.2 6 billion. 1.26 billion. nejra: credit agricole is setting aside almost three times the amount it booked a year ago because of the impact of the coronavirus. provisions in the first three month of the year jumped to 621 million euros from 220 5 million euros a year earlier. that takes into account the worsening economic environment. it did say credit -- it did say, credit agricole, that it is optimistic. there was a better topline performance drop in net income but the cfo said the bank is less exposed than rivals to market dislocations. we know that was a point of difficulty for both bnp paribas

on socgen on the trading side. credit agricole more to diversified.- more richard clarida is optimistic in his outlook for the u.s. economy on that front. we will discuss that, next. this is bloomberg. ♪

manus: this is daybreak europe. i am manus cranny in dubai. nejra cehic alongside me. just how severe the slowdown in the u.s. will be. clara data committing -- clara

data -- richard clarida committing to do more. china comes back on board to the s&p 500. it really slashed into the -- so we are playing recovery. there seems to be a little bit of criticism of the ecb bond buying. we will have a look at the bond market and dollar-yen at a seven week high. crude recovers. you did put on 20% yesterday. have we reached the nadir in terms of demand instruction? stay tuned because we have our guest joining us from blackrock to talk about commodities. to the fed story, the vice chairman, richard clarida, as i said, is optimistic that u.s. economy will begin to recover in the second half of the year. that is despite acknowledging the extent of the damage already inflicted. richard clarida was speaking on cnbc and he added the recovery would be dictated by the virus and the efforts to contain it.

in separate remarks, james bullard, the president of the st. louis fat, also presented a cautiously optimistic view. he said we have a better chance of a swift recovery with this shock than with others in the past. it is -- if the crisis is managed properly. bullard was speaking in a ofinar and that webinar course was with the national association for business and economics. our guest house is the ceo of an asset management company. let me get this narrative from the white house, which is open up. we want the economy opening up, back to normal. people will suffer, people will contract the disease, and people will die. is that inspired thinking or is this where the health wheels come off? >> this is cautious optimism. the s&p has gained 30% since its low on march 23. it is this v-shaped recovery that everyone has been talking

about that has already happened. we need to be quite cautious. markets are ignoring q1 numbers and are focused on q2, which will be the proper earnings numbers. remember unemployment spiking. we had 30 million jobs lost in six weeks. remember the labor pool is 65 million so we have to be careful. we have the risk of u.s.-china trade wars reemerging as well, so there's a lot of things to be careful about, but from what we are seeing going on in the u.s. at the moment, it does look like the worst is behind us. infection rate thread is slowing. the u.s. is rebooting and slowly reopening. this will spill over eventually into earnings, and things will start to improve. the kind of agree with what has been said. cautious optimism. nejra: great to speak to you today. that said, i understand that rather than a v-shaped recovery, you expect perhaps a w shaped recovery. with that in mind and the fact that you are still marginally underway global equities, how

are you sort of tying that together with the fact that you see a trough in earnings in the second quarter? yogi: absolutely. in the market is expecting this trough in q2 and we are talking about revenues declining to the tune of around 10% and earnings declining to the tune of around 35%. that, market is expecting clearly, it will be ugly depending on guidance, clearly, there are a lot of sectors that really struggled like financials and the oil sector, but the reality here is if you start to see a reemergence of infection rates because countries have opened too quickly, too soon, then you could well see markets selloff again before they start to increase, so we just think we have been preaching the v-shaped recovery for quite some time. it's already happened basically. and we cannot help but think you might well see another selloff either around q2 or towards the end of the year where winter

comes and infection rate start to pick up again and markets will probably adjust accordingly, but ultimately, investors are now starting to think beyond covid-19 cases and the spread of the virus and they are thinking about what happens to life after covid-19 is old news. that is what investors are looking at at the moment, trying to position themselves accordingly. manus: and part of your thinking is around china. theill wait to hear what great political gathering delivers and what shape stimulus will be. you want to increase your exposure to china. at what level and in what nature? it seems to be targeted infrastructure stimulus to come in china, so how do you avail yourself of that? it is interesting what is going on in china. china looks like an interesting economy to get exposure to. they have been first to reboot. government has acted very quickly to support the economy. we focused more on domestic exposure so we focused on

sectors such as education and health care, and we are just very upbeat. we are concerned about the retaliation measures from the u.s., china trade wars, and tariffs again, but again, our exposure is domestic in nature. very comfortable with the region relative to the rest of the world. when you look at how china has actually done year to date, in fact, in the last three months, it is down about 6% year to date so it is massively outperforming the u.s. and europe and is in a much better position to weather the storm. nejra: given that you are not fully on board with the market ,indset of a v-shaped recovery earnings troughing in the second quarter, i find it interesting that you have taken profit on tech and you are cautiously adding to oil majors. can you explain that to us? yogi: absolutely. look, when you look at the technology sector, it is very clear to us that markets have

performed really, really well, and probably much, much better than people were expecting. when you look at what has been going on, earnings growth and technology names have increased by 6%. software is doing a lot better than hardware. done has seemed to have really, really well. we actually look at the nasdaq and how it has performed year to date, and we are sitting and thinking to ourselves, actually, it is only down 2%. we are quite happy taking some profits in this space. we do not think it is sustainable going forward, and we are allocating to other areas. touched on oil. we are actually quite -- we actually quite like oil as a sector. we think oil supply is slowly going to be cut. we have had opec plus announced nine point 7 million barrels per counts and global rate decline. figures almost double that in the u.s. so we have been going out and

slowly allocating to oil majors, taking profits in technology names space because we don't think valuations support things into q2. nejra: yogi dewan stays with us. aming up, the ecb response to german court ruling criticizing his long-standing bond buying program by pledging to continue doing everything necessary to revive inflation. we will discuss next. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." i am nejra cehic in london. an attorney is in dubai. the ecb has respond -- manus is in dubai. to continueged

doing everything necessary to revisenflation. the governing council said it took note of the judgment but integrally remarked that the top european court has previously said qe is legal. yogi dewan is still with us. this has come as some of a surprise which reverberated through markets. cp yields jumped. the euro weakened. aberdeen standard and ubs are worried. they are concerned of a potential knock on effect. others say rulings like this take years. the ecb is still going to do whatever it takes. are you concerned about the knock on effect of this german court ruling on qe and especially the -- yogi: absolutely. it came as a surprise. this case started in 2015. it has been going on for a long time. the issue is around the euros to trillion a asset purchasing

program we know as qe and how it is proportion. there are consequences but we are not as concerned as some of the banks are reporting. we think it was just a surprise shock. it does lead to a lot of conflicts within europe, and this is a subject matter that has raised its ugly head quite a bit more recently. we have been underweight europe for quite some time. obviously, you have very high unemployment. you have all these political issues around the e.u.'s earnings impact that is about to start and probably will be more negative than the u.s.. that is more of a timing issue than anything else. of course, when you look at the low-end that is taking place -- the furloughing that is taking place, it could have unemployment rate reaching as much as 42% so europe is not a great place to have exposure. the market itself is down 22% year to date so significantly underperforming the u.s. and the

rest of the world. this sort of news flow just makes investors a little bit nervous about the future of europe longer-term and how fragmented it actually is and how the political issues are starting to play out. they are much more significant than they are in the u.s., which is where investors seem more comfortable to allocate assets. that, politics is going to trump the backstop of the ecb. a lot of people come on the show and say japanification, japanification. the fed and the ecb have about 30% to 40% of gdp on their books at the moment. assets of thethe central bank relative to the equity market, relative to the bond market, and you are looking at ownership at four times the level of 2008. is there anyway that you take advantage of this in the japanification style structure?

hard to takeery advantage with so much uncertainty economically around what is going on. i think it is just an additional thing for investors to get worried about and focus on, so we allocate. you look at the $2 trillion of debt that's being purchased and you wonder whether some of that might reappear in the marketplace. adjustments having to be made, and i suspect the impact is more likely to be far-reaching in the bond markets and the credit markets than it is in the equity markets. and at the moment, investors are really more focused on what is going on in the equity markets around earnings and the rebooting of various economies. i go back to the spread of the virus and deaths. that seems to be slowing. in germany, we have had new cases fall for another day so i think that is the -- that is what everyone seems to be focused on. i cannot help but think that

this news was a surprise. you will have a reaction in the way you have seen with spreads, but the reality is they will reopen back onto slowing inflation rates, whether or not the lockdowns are going to be instigated with some form of sensibleness. we would like to see life slowly returned back to normal. q2 earnings rear their ugly head. marketsreflected in how form year today. not great. grace is u.s.ving q1 gdp came in at -- european q1 gdp came in at -3.8%. in the u.s., -4.8%, so those numbers were not as bad. we have had a stream of economic data from germany which has not been good for pmi to factory orders, and i guess you have got -- manus: we are going to have to draw a line under it there. .ogi dewan, ceo

our guest host this morning. coming out, commodity prices have been quite literally hammered. global lockdowns are shifting. what happens next in china is the key to commodity markets. we discussed with blackrock, right here on bloomberg. ♪

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manus: good morning from bloomberg's middle east headquarters in dubai. i am manus cranny. nejra cehic is alongside me in london. your daybreak europe headlines as follow. -- follows. president trump says the u.s. must reopen even if it leads to more suffering. he will also disband the coronavirus task force as the u.k. death toll becomes europe's worst. richard clarida warns the economy will need to be more supportive.

the ecb pledges its full commitment to reviving inflation after yesterday's landmark german court ruling. disney takes a $1.4 billion hit on the crisis. in europe, unicredit reports first quarter losses of 2.7 one billion euros whilst credit agricole sees provisions rocked. nejra: welcome to "bloomberg daybreak: europe." good morning. there's lots to focus on in terms of coronavirus today but i am really looking to the bcp market open as well as 7:00 a.m. because we saw a big move higher into year and 10 year yield after that german court ruling. the question for the markets is even though the ecb has responded, saying it will do whatever is necessary to revive inflation, does that actually mean whatever it takes, and how long does this uncertainty way on the bond markets and the euro -- weigh on the bond market send the euro? manus: for me, it is all about the fed. when you look at what bullard

said, zero rates for years, not months. that is the first definitive clarification of what forward guidance is going to be. richard clarida on the other hand talking about the ability to be more proactive, more aggressive, and therein lies the holy grail, the backstop. to the rest of the markets, the s&p 500 gave back some of its value yesterday evening on the back of clara's comments. let's look at the market boards. for them -- for him, it is about the possibility of a recovery in the second half but he does warm we are in really uncharted territory so we are just managing to re-grasp .5% this morning. ing higher. yesterday rallied by over 20%. the yuan seeing a little bit of a shift. we gave some back this morning dollar at a seven-year high. the car industry under huge pressure. how do the bmw numbers look? nejra: we have had first quarter

sales at 23.2 5 billion euros. first quarter, automotive revenue at 17.9 9 billion euros. first quarter ebit comes in at 1.3 8 billion euros. basically, the takeaway is that the post virus sales come back sort of has an edge with the rivalry in china toughening a little bit. that was the take away from bloomberg intelligence. now, let's recap what we learned overnight. donald trump said that u.s. must begin to reopen immediately even if it leads to more infections and deaths. speaking in arizona during his first trip outside washington in more than a month, trump said he is preparing for the so-called phase two of the u.s. response to the coronavirus. pres. trump: people are not going to accept it. they will not accept it, and they should not accept it. we have a great country. we cannot keep it closed at i have had doctors say why don't we close it for a couple of years? this is the united states of america. and yes, will some people be affected/.'yes -- affected?

yes. we have to get our country open and we have to do it soon. china's economy is facing a lopsided recovery. that is according to the analysis of bloomberg economics. while the supply side of the economy looks almost fully restored, the plummet in global demand remains a key roadblock. but domestic demand for commodities has gained some momentum. trade in steel is used -- which is used in construction, has been back to fourth quarter 2019 levels since the week ending april 10. meanwhile, demand for refined copper rose 14% in april from a year earlier. that is according to the shanghai metals market. the world is divided. investing atad of blackrock. great to have you with us. we looked at goldman sachs and morgan stanley. you can look at the bloomberg data this morning and everything seems to be coalescing around

that we are putting in a bottom. although the outlook might be quite grim. when evidence are you seeing on the state of play on the global economy this morning? good morning. >> good morning. really it is interesting, obviously, what we have been through. pretty unprecedented. that is an overused word to describe this i think. i think we have really had three phases. first of all, we had the financial mechanisms that governments around the world, central banks, have put in place to fix the financial planning to make sure that that has kind of held up. now, into the second phase, which is really the virus data, and countries are moving through this at different speeds. some appear to be past it. and have reopened. others are still dealing with it. i think once we are out of that, we are into the economic data and seeing the shock to earnings. seeing how companies have fared. the winners and losers, the

haves and have-nots, and we will get ourselves through that news, and i think we can have a more robust picture of where the economy has started to settle down. i think those are the three phases we think we are moving through and the virus phase, for europe right now, we are in the middle of that. to you thisto speak morning. every day, we look at the equity market showing us signals that at least, in risk assets, investors seem to be looking through the worst and seeing the recovery on the other side, but if we look at commodities, the gold oil ratio has been sliding from a record. it is quite a way above the 30 year average but it has been coming down and some people see this as evidence that risk appetite is growing among investors, so that is the gold-oil ratio. are you seeing evidence of that risk appetite and investors looking through the crisis to the other side in other parts of the commodity market? evy: clearly, you are seeing an

appetite for risk returning. massive moves in the equity markets. largest one of the moves in equity markets for many years. obviously, that is straight after the previous month, so there is risk being reallocated and that is been the case for several weeks. in the commodities market, they obviously are responding to this as well. if you look at the prices of copper, it is up substantially from its lows, and that's always a good barometer for economic activity. i think you have also got to take into context when looking at commodity prices, you know, where the kind of landscape is now. if you look at the copper again as an example, we have seen copper producers seeing significantly lower operating costs. obviously a much lower oil price. these are key components of operating costs. it is the marginal cost of production of a commodity that

has changed. you will ca reduction in terms of people's expectations of where commodities could trade back and i think we are looking at that to see what -- whether these -- what these cross curves are going to look like in some of the input we were used to going into this. manus: can we just follow up on that? a bounceback. iron ore did really quite well in this crisis given the demand structure in china. copper under pressure. what kind of bounceback could you expect in something like -- let's go with the copper that you were talking about. commodities have demand and supply. you look at the supply side, first of all, and compare it to previous crises. the prices of the commodity have fallen and supply tends to react. the supply reaction in terms of closure of high-cost capacity has always been relatively slow

because companies are able to survive. expectations are prices will improve so decisions are taken more gradually. in today's environment, we have had a virus impact so a lot of capacity was closed and credibly quickly. as demand fell, supply was also contracting. we have not seen the inventory built in the medical -- metals space be anything as much as people were fearing so there's chances for a bounceback on a demand recovery, especially if that demand recovery is set by fiscal spending, and that fiscal spending is commodity intensive, as many of the indications point to with regards to some of the carbon transition and green economy expenditures that have been highlighted. then you should see an equally strong recovery in demand at some point. and then you might see the prices catch up with that, but that is the way they are used being. nejra: evy hambro from blackrock staying with us. we will talk more about commodities in just a moment.

the coronavirus pandemic has forced european union to take a hard look at the region's reliance on global supply chains and its relationship with china. we discuss this exclusively with phil hogan, the european trade commissioner. take a listen. >> in the beginning, there was a lot of crisis management and the contention -- temptation was to put up restrictions and deal with the immediate. we have to remove all of those restrictions and return to an open, rose-based approach, and at the same time, i am sure every country will be looking at how they can look at their vulnerabilities in the context of this pandemic and look at how they are vulnerable at this particular time, in terms of medicines, pharmaceuticals, medical supplies, and they will want to, i suppose, do more local production, and this is what will happen all around the world, and this is why we need, you know, a rethink in terms of what we should do in terms of working together. i have been reaching out to the united states and for the wto members in the last two weeks to see if we can work together to have a more speedy recovery than

perhaps working individually. >> you have been talking to ambassador lighthizer over in the united states. commissioner, one of your key jobs before the arrival of covid-19 was to try and put the thattrade truce jean-claude juncker is negotiated back on track. what is the tone of the conversation you are having with washington right now? is it amiable to making that happen? to putting the e.u. and the u.s. back on a level playing field, more even playing field? what feedback are you getting back from washington? >> over the last few week, people have been trying to deal with saving people's lives both in the european and the united states, so there has been a call in recent weeks. we were trying to get back on track. the mandate we have in the european union is to can negotiate with -- is to negotiate based on the 2018 mandate, and that still exists. we have been making some

progress. the earlier part of 2020. i am looking forward to re-engaging with ambassador lighthizer and his team in order to make more progress hopefully in the coming weeks. you have visited d.c.. what is the sticking point with agriculture? the u.s. wanted the e.u. to put agriculture on the table. off-limits post-pandemic. is it now on the table potentially? the unitedboth states and european union are happy to do soapy had we made some progress on industrial tariffs. technology and energy issues are on the table. standards and conformity assessment in respect to industrial products of the future. with the commerce secretary. without a big agenda agriculture on the table and i think there's an open-minded spirit to try and make some agreement here. i hope that the positive attitude of the european union

will continue to find good engagement in the united states and i am happy with the constructive engagement we had in the early months of this year. i have invested a lot and tried to reflash -- refresh the relationship. we are having a constructed relationship at the moment. >> you did talk about vulnerability is in supply chains, companies looking inwards. how can you do both? how can you have a less globalized global economy and at the same time, cooperate with, you know, the united states, and with various european countries to have a speedy recovery? ateurope is looking strategic autonomy. we want an open, rules-based approach, fair competition, and fair roles that can be implemented by the wto. we are doing a lot of deals around the world in free trade agreements. we have a lot of partners. 7500. we want to do more of them. at the same time, there are vulnerable sectors we have seen exposed during this pandemic, particularly in the health area,

and equally, the production of medical supplies that are important and essential for our citizens. both the european union and the united states see this issue now that you cannot depend on just one geographic location in the world. we have to diversify, and we are going to do that. so is the united states. but that does not mean we cannot do both. we can deal with the vulnerable dependent, butre equally, we have to have -- balanced with that, we have to have an open, rules-based approach for the entire economy. manus: the european trade commissioner. we will get straight back to metals and mining. ♪

nejra: this is "bloomberg

daybreak: europe." i am nejra cehic in london. manus cranny is in dubai. the strengths in iron ore could fade with spot prices falling to $70 per ton according to citigroup analysts. they forecast a selloff this month when seasonal weakness in chinese steel demand sends prices lower. global surpluses are hitting giants hard. evy hambro from blackrock is still with us. at's focus in on miners little bit. when we talk about what companies are generally looking at and willing to buy during this crisis, some of the themes that,, they say they want strong balance sheets, companies with potential for growth, and they want companies with a potential to pay dividends. view hits in your two out of three of those categories? evy: great question. if you remember the previous crisis we have been through, especially ones related to the

resources sector, mining companies today, in our view, our as best positioned as i can remember in 26 years of doing this job. the balance sheets have been repaired after previous crises. management has been incredibly capital disciplined in terms of allocating -- reallocating cash flows, and importantly, paying down debt and sharing the proceeds from their operations with the investors. thehat list you mentioned, mining companies today, in our all three boxes. the box most relevant to investors during the dividend carnage we have seen in general markets is the potential for these companies to rerate on the back of their ability to be able to return cash flows back to the earners of the business, the shareholders. that, it isent in the theme you and i touched on over many years, the guardian of capital. if i look at the capex cuts that have come through from glencore

down to 4.5 billion, slashing 2 billion as well, does that give you -- does that give you heart that they are being judicious in their management of capital? is there more to come? where are we in that cycle? one the cycle runs along line. it is obviously impacted by the operating free cash flow of the business but it's also impacted by the object readiness that the companies have for deploying that capital. if projects are being delayed because of impacts, be that physical,weather, -- weather, or virus related, capex expenditure will go down. today's environment is pretty difficult to get things going, so i think the capex cycle will run, but what i am most encouraged by is the overall discipline we have seen since the bottom of the market in

2016. that strategy continues today. the dividend potential here is fantastic, especially relative to the dividend destruction have seen another sectors and room for growth in earnings, particularly the gold companies, is tremendous. we are seeing lower operating costs for gold companies and higher revenue lines without any significant objects spend money on an balance sheets being strong. i remember starting this job in 1993 in the dividend growth was phenomenal then. it looks as though 2020 is going to be a year where we are going to see a similar echo. how open are investors to the points of nuance that you are bringing up here with us today? overly focusedoo on the crisis and perhaps sentiment and the outlook for china -- i know it ties into what individual mining companies are doing but i suppose my russian is are investors looking to pick stocks at the moment or are they being driven by broader

market teams given the backdrop of coronavirus? evy: i think obviously, in the first element that i started at the start of this interview with the down factories on markets, the huge scale, the moves and suddenness of the moves, everything was moving in the same direction at the same time. the recovery we have seen in the last month was driven by certain sectors, and we saw some of that theership that we saw in previous bull market we have been in return, and so some of those companies have led the recovery. some are trading broadly higher than they were going into this. but i think now, investors are starting to be a bit more specific in the choices they are making. i think some of the consequences of this impact in terms of company's profitability will play out over the next month and probably years, and the gold companies i think -- manus: i want to get one last call from you on the gold

market. bank of america says $3000. the fed cannot print money. etf's are sucking in money in terms of the gold, but you actually have made a very pressing point in terms of -- prescient point going into this crisis. so take us through your view on that. ay: the gold companies, in similar way to the broader resources companies, have repaired themselves. they have taken longer to do this because they have not enjoyed the same strength of profitability that the broader mining companies had coming out of 2016. it is only recently that the balance sheets have got to a position of significance rings my and now, we are seeing as the broader mining industry is, operating costs driven by currencies, lack of cost inflation, and lower energy prices and we are seeing a much higher gold price then people have expected. the rise in profitability is really, really dramatic, and we are seeing that coming through in the earnings that's coming out even today in north america.

toould expect this trend continue, and with gold obviously being a currency, interest rates being low, it looks as though gold prices are going to remain pretty strong for the foreseeable future. nejra: ok. evy hambro, global head at blackrock. great to have you with us today. thank you so much. we will talk his knee, next. -- disney, next. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. nejra cehic is beside me in london. the crisis has cost disney lost profit. bloomberg intelligence's matt has the details. how quickly can they bounceback from this? matt: i think the short answer is not very quickly, but you know, they are definitely saying

they will give it their best shot. in particular, they are looking to reopen their shanghai theme park on may 11, so i think that will be kind of critical to how quickly the recovery can come through. they have lost profit. that team and segment. they have already lost a month so it will be really critical. that part normally accepts about 80,000 people a day. the chinese government will limit that to 24,000 and disney has said it will be starting way lower than that so they need to get that right to pick up confidence. nejra: short and sweet as always. thank you so much, our bloomberg intelligence analyst. and that is it for "bloomberg daybreak: europe." the european open is up next. a lower open even as u.s. futures are positive. of course, we watched to see how bcp's will move after the yields

soared following the german court ruling on the ecb's bond buying program. this is bloomberg. ♪

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♪ anna: good morning. welcome to "bloomberg markets: european open." saying calmrkets those tensions. chinese markets reopen study amid a war of words with the u.s.. futures point to a slightly negative start. the cash trade an hour away. '