that's all for this edition of dateline. i'm craig melvin. thank you for watching. good morning welcome to "street signs." these are your headlines new month, same misery european stocks sink with banks and travel the biggest decliners. >> u.s. futures extend declines after the dow posts the worst number on record >> you are going to start seeing some real light at the end of

the tunnel but this is going to be a very painful two weeks. uk bank stocks fall after lenders ditch their dividends. joining the european counterparts on calling lenders to hold on to cash sinking deeper into contraction while the italian pmi drops to the lowest in a decade >> i expect to see some very bad numbers coming out of the economy in the first quarter, second quarter and what it looks like coming out will depend how the virus proceeds let's do a little bingo calling here this is your eurozone pmi bingo numbers. final manufacturing pmi for

march 44.5 that is the lowest since july 2012 the final manufacturing output number, pmi at 38.5. the lowest since april 2009. worst than the flash estimate. rounding it out with a look at the final new orders the constituent 38.5 the lowest since march 2009. clear indication of significant decline in eurozone factory activity u.s. futures turned sharply lower after president trump warned that the next two weeks will be painful as many as 240,000 people could lose their lives. >> we are going to go through a

very tough two weeks and then hopefully as a lot of experts are predicting, we'll see light at the end of the tunnel but this is going to be a very painful two weeks. >> i'm sure many of you are very glad we are putting march behind us now things are starting out on a rocky foot through april the dow ending q1 down 23% that was the worst q1 performance. the worst quarterly since 1987 the major selloff as they suggest how long this will last and what kind of damage they can do what kind of policy response will cushion the blow. facing losses down 20% the tech heavy nasdaq held up a little better down just 14%.

a substantial pull back there. now, we'll see some resumed selling today. we have heard from several voices over the last 24 hours including cleveland fed president who told cnbc the virus outbreak could push u.s. unemployment as high as 30%. the sole dissenter said the economic picture will get worse before it gets better. >> i expect to see some very bad numbers in the first quarter second quarter, what it looks like coming out will depend on how the virus proceeds in terms of the european story, the picture is universally weak as you would have seen there. the message coming through across the board here. we are seeing declines largely in excess of 3% on the top line. as you look at those other

markets, switzerland, italy, the spanish market, they are all down more than 2%. let's bring in our investment strategist obviously investors are struggling what is the right response to up days and down days do you continue to buy dips or sell dips at this point? >> good morning, geoff i think on our end we are still cautious we would highlight what we saw from two weeks ago there were a lot of final loops that were taking hold. we saw a run on the dollar and on corporate bonds that is missing right now. that is the positive

development. we had strong intensity of risk taking hold which seems to be under control because of the actions of the central banks there is a lot of uncertainty. as we move on, we are looking at more down side to the short-term program. >> we've all become expert epidemiologists around this and the rate of slow as we look to china, what is the underlying impression for investors as to how they negotiate different sectors, different stocks and different profiles >> you are hitting a very strong point. unlike two weeks ago, we are seeing a lot of difference in

the covid-19 sectors and non-covid sectors. as china pointed out on the hard data and the breakdown we saw there and the moving of it second or third week may look likely for europe. so just the mapping of the duration of the lockdown in that sense, the covid like travel and leisure is struggling for us they cannot go back to capacity once the lockdown is over. remaining resilient to what is happening. keeping an eye on. what we are seeing the backstop on corporate bonds there is a lot of difference i would argue compared to two weeks ago. >> a good morning to you in terms of the great financial

crisis, there was an accusation that they got most of the benefits back in 2008, 2011. this time around, there will be the same portion for markets or will it end up where it should have been in the first place in the real economy or both >> caller: i do agree with you that this is different banks specifically are not the drivers of the issues we are seeing right now they have a very strong role to play a lot of actions have been taken by the government and the banks themselves in unleashing the capacity in that sense, the stimulus and the whole narrative is different. they have a very strong role to play if they are going to come out of it in a more healthier

manner than a sustained down turn than in 2008, 2009. >> i can almost guarantee they'll say fine on the surface, that is the right thing to do to lending with bonuses and dividends. i also know they'll be terrified in supporting businesses that in the real world don't have viable models is it a concern that the zombie loans will expand as we move out of the pandemic? >> caller: that is a concern especially covid sectors and names already weak to start with i would highlight there is socialization and a lot is happening. the guarantees offered by the government are significant

going to 30% gdp that socializing of loss happens. banks do get a lot of coverage of potential losses. does that help the system? not necessarily. but the socialization the losses does become critical >> i want to ask in keeping on this topic around credit you are pointing to the support to point around those places in those companies that are levered. we are seeing substantial moves to avoid so some companies are seen in that risk in breach. when you look across the market, there are sectors that you would add matly avoid in the concerns

around the key covenant here we are focused on the lens and energy even though there has been some discussion that there may be a deal between u.s. and russia there are early days and as you pointed out, there are balance sheets where players have been heavily loaded with debt we are avoiding that we are very concerned about anything that has to do with people gathering so anything which a facts or attracts more than 25 people will remain exposed. we have seen that in china they had to shut down cinemas again to avoid reinfection so unless a vaccine comes through, we are avoiding travel,

leisure. some may argue there is value reappearing. in sectors like telecom. now central banks are there, backstops in ig market, those cash flows are very important. there is opportunity in our minds. >> in terms of judging when it will be time to load up on some of these sectors and names, what do you think will be the peek fear, what are you keeping an eye on >> pointing to a huge amount of accuracy and the bottom of the market would be difficult. the key to look at is where are the central banks providing liquidity and where are they going to provide the shutdown. we are looking at different asset classes.

convertible bonds. the underlying sector is different from high-yield bonds. they don't have much energy, they are heavy on tech and they are being paid to take risk. in those asset classes as well, i think timing the bottom will be very difficult especially with the wider situation moving rapidly from a day-to-day. >> thank you salman for meeting with us. coming up, china's manufacturing sector bounces back more when we come back a look at u.s. futures the dow opening more than 600 points lower that is not an april fool's joke march is behind us but the

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. welcome back to "street signs. after suffering the worst quarter in 18 years, the stoxx 600 has opened up just about an hour into trading as we have seen a pullback in u.s. futures as investors try to brace for the fallout. let's look at a few more sectors. the auto sector, the ftse 100 down 3.8 losses across the european space. in autos, the sickectors are tan a hit. to be expected, the

manufacturing output plunging. the pmis we are seeing a big reaction volkswagen down, daimler, bmw down 4%. travel and leisure has been the hardest hit over the last month or so. we are seeing more losses accumulate for the airlines as well as the accumulation intercontinental being one of the hardest hit. banks are also in focus in a very big way major u.s. lenders will scrap dividend payments. you can see we'll show you the bank stocks. first, let's get out to steve to round out this move for what this means to be scrapping is this the right move

steve? >> it seems to be the right move you've got a situation where the economy could be in greater crisis than we saw in 2008, 2011 it could well be from back in 1930's territory the last thing banks need to worry about is bonuses, buybacks and dividends. one of the big criticisms in the last financial crisis, 10, 11 years ago was the fact that the banks pulled a lot of credit lines to individuals who could have been okay if they were given a little bit of leeway it is logical that if the economy is facing a crisis, the banks are facing a crisis.

the fact that they've been given leeway seems absolutely sensible a lot saying this isn't fair if you don't have a bank, you won't have an income two, if that bank does survive and the economy does survive and things are far better, that stock will rally more than the 5 to 8% yield. third, you didn't buy these stocks thinking you would get 8 to 10% dividend yield. where we are around 3% decline as well. for those who thought i didn't lose thoo yield, it was the decline. if i was aen income investor, i'd be worried about the rest of the country. there is a whole host of companies thinking what are they

going to do? cut them in half or more at the moment the chronology of events, jobs and the economy are the most important. there after, income payouts. >> a lot of the regulators to allow banks to facilitate lending to households. how do the uk banks look from a credit risk perspective. a lot of companies are vieing for their own lives with a lot at stake here? >> a couple of days later, you not only get the financial review as well, which tends to move in the same direction i have to go back to a point, which i think i made a lot until we know the ramifications for the pandemic and the

economy, we are only making guesstimates going forward my big fear is that we'll get a situation we referred to before the break that when you get the banks funding a lot of companies that would have gone to the wall how long do they fund these zombie institutions and the vast amount of capital tide up which weren't doing very well before coronavirus and actually probably were they not given too much support, they would have gone to the wall anyway. it sounds brutal there are many companies going to wall now we've been talking about way before that probably would have gone to the wall a lot earlier had they not been given a rolling credit facility. >> this is the steel group that

operates plants around the world. tata says it will reduce production the company says it currently unable to assess the impact of covid-19 impact. they've got the same issues as visibility as other businesses tata still operating at a reduced level across two steel making hubs. the company focused on conserving cash and liquidity and set on reducing the cost base at this point they have reduced production at some european mills to match the lower demand and operations in the down stroostream operationsn india have been suspended and put on maintenance mode. sentiment in japan turning pessimistic. the bank in japan showed large

manufacturer's index fell to minus 8. that is the worst since march 2013 china manufacturing sector expanded in march after plunging a month earlier. according to a private survey, they improved to 50.1 as the country slowly started returning to work. demand stays frag i'll as the rest of the world battles the pandemic matt taylor has more >> second day in a row we sue the expansion pmi. we saw a fair bit of late selling in the u.s when you look at the japanese market, they are off by 4.5% more details when it comes to

china, shanghai trading low. private sector showing expansion of 50.1 was the read in march. the all-time low in february following the official number we got yesterday showing a reading of 52. when it comes to the first quarter, the shanghai was one of the best we saw with a decline of 8.1%, followed by the hang seng trading up as well. with a decline around about 16% or so today, off by 2.19%. some late-day selling coming there as well. things were were rough when it comes to north asia. japan up manufacturers there moving negative slipping to negative 8 you can see the market there did you know by 20%. south korea down by 20% as well

when it came the first quarter things were worse when you went further. australia down massive 24% the worst quarter on record there. just talking about tata steel in india. midway through a three-week lockdown its market tumbling around 30% geoff and juliana, back to you we'll take a short break on "street signs. after the break, we could get historically bad pmi data you for manufacturing. construction activity, manufacturing, business activity has slowed dramatically. we'll bring you e mbs rethnuerhe on cnbc.

welcome back to "street signs. i'm geoff cutmore. >> and i'm julianna tatelbaum.

these are your headlines >> banks and travel the biggest decliners. u.s. futures extend a decline as president trump warns u.s.'s pandemic situation will get worse. >> we are going to start seeing some light but this is going to be a very painful two weeks. bank stocks fall sinking to the lowest level since 2012 as they close the factories cleveland's fed president warns more is coming >> i expect to see some very bad numbers coming out of the economy in the first quarter second quarter, it will depend

on how the virusproceeds the final pmi number for march at 47.8 this was weaker than anticipated. as we have seen with a lot of these numbers this morning as they report transport and raw shortages leading to the steep increase of vendor lead times. i think this is the highest they

say in the pmi 28-year history going out to steve where a lot of cranes tell a similar story >> reporter: we try to give you the words and pictures i'm going to get the man in charge of pictures to get what he wants here. this is a very interesting area of south london. it used to be not the nicest it became different when people came out of chelsea and it become known as south chelsea. the power station development and this whole nine elms area is about 20,000 homes plus, plus a whole load of retail and power,

the apple place. what are we. 9:35 now i can hear a little drilling somewhere but i can't see one crane activity if you use that as a met forefor industry and construction and real estate and add that to what you've recounted that is the story of woe i know there is a commercial property decline estimate of 0.9% no one can put a finger on this at a moment. zoopla is one of these sites people pour over they are estimating that trar

transactions will decline. 60%. i think that is bold from are no new transactions getting financing for a brand-new mortgage you can't go visit someone's home you haven't got the international buyers looking at these amazing apartments they are hundreds of thousands of millions of pounds, they are not even bought by londoners they are bought by foreigners. you know hong kong you can see on the side, you see advertisement for buying blueprint homes in london. you ski it in abu dhabi and more whether we are talking cre, home

building, construction and manufacturing. i noticed two property developers and they said to me, who do you think the percentage of my tenants will be paying over the next few months is? zilch. they have nothing. they may turn around and say, well evict us. we've got no revenue this is a tough sector until the pandemic is overcome >> the bit that always got me is the way they advertise in those swanky hotels to buy properties that were centrally located in london when you looked on the map, they were somewhere near luton

airport. >> what have you got london airport at the south end, you've got chelsea and west ham sted there is a lot of poetic language to sell properties. >> absolutely. i think we may be done on that one for a while. factory activity crashed around europe in march. supply chain disruptions the eurozone manufacturing pmi sank to 40.5 in the last few months that is the lowest it has been italy suffered the steepest drops. france and spain reporting data with activity falling the most in seven years >> estimates for a 6% fall is realistic according to economy minister

speaking to italian media utilizing the stability bailout fund is not an option. he rei had ratterated calls for fiscal response. >> bringing in the global economist at citi. we had a look at the updated fraction loretta talking about the gap between 10 and 30% increase goldman revising their call up 15%. even as i speak, i hear the director tell me we've lost our guest at the moment. as i said earlier. it does feel there is a reversed option going on as economists are making bolder and bolder forecasts. now that we've rele connected

you at citi, i wonder if you you are getting a good sense of how high the jobless rate is likely to go in the united states >> our u.s. economists came out with predictions on unemployment rate and that they could see a spike. they do think it will decline fast again so ending the year with 6% it does depend on the policy that we are seeing in the u.s. the issue we are all asking is to what extend the impact can be blunted or ameliorated by fiscal action taken around the world. the president now talking about another $2 trillion to be thrown into infrastructure in this

place. >> caller: as they continue talks in the u.s. will depend on how that will be and for how long the closures continue for now, talks about this, our economy will have a contraction in the second quarter of the year and the rebound we will think globally, we need to see a huge fiscal easing for the shock to the economy to be mitigated. >> very good morning to you. the fdr new deal was enacted and carried out between 1933 and 1939 that is the template for $2 trillion plus that the president is talking about at the moment but will it come to you late for this presidency? will the effects of any new deal

have any benefits in the short term >> there will be a contracting in the economy it's unavoidable we don't know how hard the hit is and how much fiscal easing is needed we start out with the scenario where it is only the social distancing scenario that hits the economy. in that scenario, 1% gdp is unrealistic. taking into account the financial uncertainty we are having, the real economy we are seeing uncertainty more broadly that would hit business investment in that case, 2% gdp is insufficient in the scenario where the hit is much worse, we could see that we would need fiscal spending to 5%

gdp. the shocks are accumulating and the shocks are huge. fiscal easing is big and needs to come now in order to avoid the unemployment and bankruptcies to businesses >> you are a global economist. we are looking at a lockdown in about a fifth of the world's population in india and pakistan itself from supply area, india plays significant role what do you think about the risk to the economy and the rest of the world as a result? >> the updated forecast had a stronger india match one way to see this is that the advanced economy is highly depend enter on the services sector 75% of employment and gdp comes from services.

these are the ones that are hit the most when we have this lockdown on the country. the problem with the services is that they are a struggle and the hit is permanent you won't see the same v-shaped recovery that you can expect with the recovery. there are differences among emerging markets as well >> taking it back to europe. euro group leaders are in disagreement to say the least on the way forward in terms of the response to the outbreak and the cost to that what would you like to see as the maximum impact in terms of mitigating the economic hit? >> european economists could potentially be for the eurozone that they are looking a coordinated response the framework we presented in terms of how much fiscal easing applies to the eurozone.

we could see here 5% of fiscal easing could be needed based on the assumption we could make economies are projecting a worse situation. four quarters of negative growth is what they are saying. and it is less negative when they say europe has to be hit faster >> thank you for being with us global economist from citi the president of belarus sparked concern after being seen taking part in a match the president suggesting that you can ward off covid-19 through a diet of vodkas and

shaunas. the white house reportedly to rent out space for krut and petroleum concerns president trump previous i will asked the department of energy to buy billions of oil the plan failed due to a lack of funding. the market selloff we've seen was to do with the coronavirus pandemic and the lockdowns that have taken place. the selloff was accelerated on the back off the feud between president putin and saudi arabia earlier in march we saw some accelerated selling on the back of that.

and wti, we are seeing a pullback wti, its worst quarter ever. massive pullback in the price of oil. looking at gasoline prices we are looking at a selloff there. you can see tracking in the quarter. the latest session down 11%. gold has had a pretty decent run logging the sixth straight positive quarter one of the key safe assets for investors. as we enter a new month, new quarter, the misery for march seems to be seeping in we are going to take a quick break. microsoft and amazon moving in the volatile market. we'll have more when we come back

u.s. equities had a difficult quarter. with the worst quarter let'stalk about the sector you've got the financials index there. the s&p 500 have held up better than some as the federal move to shore up liquidity to ensure investors and banks are safe institutions we are seeing more sizeable gains. let's look at the energy part of the market the worst quarter ever that came alongside the plunge in oil.

the wti with the worst quarter ever back to 1983. health cacare sector, there benefit from that perspective as well two tech giants came out of the quarter in the black karen has more on these two names and morning. >> remember the trillion dollar club as we started out this year there were four companies in that exclusive market cap. we've lost two apple still worth $1.1 trillion, microsoft still worth $1.2 trillion.

apple has been in the same range of alphabet. the worst has been in facebook amazon, netflix and others have been flat. looking at these cap stocks, most had a rough 2018. following iphone sales, apple meant it was sold off. they had weathered coronavirus better than back in 2018 take a look at apple's stock down 38% with the closures of stores. analysts had been slowly launching those forecasts.

still hopes the dividend will be paid out in april. elsewhere in alphabet stock, there has been a slump based on travel-related sectors a huge amount of advertising digital ads spent was about $10.7 billion in revenue for alphabet making up $98 billion also not hearing about youtube usage. amazon despite all of those packages, and web services, more infrastructure has been positive for amazon's stock the other is netflix with all the binge watching at&t was talking about record traffic it is seeing through its platform

back to you in the studio. >> thank you for that. president trump is calling on congress to back another stimulus package directed towards infrastructure democrats and republicans had previously indicated support however both sides have struggled to agree how to pay for it the president took to twitter saying, quote, a very big phase four investment came calling on americans to be prepared for a tough few weeks ahead. >> i want every american to be prepared for the hard days that lie ahead. we are going to go through a very tough two weeks hopefully as the experts are predicting after having studied it so hard, we'll see light at the end of the tunnel. this will be a very painful two weeks. >> president trump is expected

to suspend a limited number of tariffs for 90 days. the move would cover some apparel and light trucks according to multiple reports. tracie potts joins us now from washington, d.c. how is the president doing are his rating improving around the coronavirus? >> reporter: things are still rocky. first, the white house is raising predictions saying we could lose 240,000 lives, not 200,000. with social distancing and people staying six feet apart, we could have an impact on those numbers. in terms of how the trump administration is managing this. there are still complaints

in new york, they complain they are not getting enough ventilators and supplies that the federal government is holding some back and, in fact, they are because the president says this is going to get worse. they are holding back ventilators. they are setting up temporarily hospitals. they have sent a u.s. navy ship there to help. the big picture in the united states is that we have some areas that are new hot spots other areas where the numbers are starting to flatten out, mainly because of the social distancing practices also, the federal government has been hands off whether people need to stay at home they are letting the states decide finally, our health authority, the cdc is rethinking whether everyone, all ordinary americans

need to wear a mask. their original advise was that only people that were sick and health care workers needed to do so, now they are taking another look at that >> thank you tracie potts from nbc news let's leave you with a look at u.s. futures. it is a new month but misery continues. we are looking at more the s&p and the nasdaq pointing to a weaker start. after holding up better in the u.s. market. that's it for us today i'm julianna tatelbaum >> and i'm geoff cutmore, "worldwide exchange" coming up

breaking news, wall street set to pick up where it left off after one of the worst quarters for stocks on record as the white house warns the u.s. death toll could reach 240,000 overseas, largest banks scrapping some $20 billion worth of buybacks and dividend payments it is wednesday, april 1, 2020 you are watching cnbc.