[theme music] welcome to "street signs." i'm karen tso. these are your headlines hopes for a broad-based stock rally. dow trading higher and european index up around 3% off a bullish note china's gdp falls 6.8% in the first quarter marking the first contraction in nearly a decade as production and spending grind to a stand still

because of coronavirus meantime, the pause of news comes from the pharma sector as a trial from gilead shows promising results. lvmh with a disappointing set of numbers the ceo says the situation is improving. >> caller: we've always seen in the history of the company strong bounce back after crisis. we've seen that in the past and in other epidemics what we are seeing right now in china is not surprising us auto sales plunging. in italy, the hardest hit country as dealerships across the country are closed

we are an hour into the trading session here in europe and we have a strong bounce on the index taking away from some of the losses we had shored up for the trading week the stoxx 600 down more than 2% for the week also strong gains in individual markets. the likes of the french stock market are rallying really nicely today one of the strong ones out of the core markets one of them that rallied 3.3%, a little behind but solid to the dax, 3.1 the ftse tracking in the green also slightly firmer yesterday but has been trading down 6.6% in the green minimizing some of the losses we have witnessed for the italian stock market,

we've got the ftse mib trading almost 2.4%. investors really moving into the risk april tide on the back of gilead's partal release from a trial. investors searching for positivity at this point as a result, we've a bounce in travel and leisure up 5 plus percent. auto with a dip in car registrations showing us the closure is having a huge impact and some data out of china as we put more entry into the record book the ee con by gdp shrinking. very weak numbers on retail sales as well. an impact on the market. barely a ripple. the sectors trading in the bottom end are the defensive

ones health care has rallied really hard speaking of which, wall street is responding strongly to gilead and whether there could be a treatment in the works a little further than this previously this stock is in focus take a look at shares in sciences 16% on the boards. for one the company's drugs showing promising results in treating covid-19 patients there is currently no proven therapies to treat the pandemic. to rival roach roche, it is moving to provide a blood test to show if a person has been exposed to covid-19. detecting antibodies in people

who have been exposed and expects to come to the market in early may. they will test production to test high double digit millions per month. that stock price has been up 4% this year. let's head out to julianna it is incredible to see that reaction to global stock markets to a tiny detail leaks from the gilead trial clinical sciences walk us through what we know so far. >> absolutely. the message should be that this new is encouraging this is about gilead's drug remdesivir it has shown to be successful. news from a partal data from an

ongoing trial with the drug showed that fever had rapid recovery this is from data released from video from an internal faculty member in chicago around real time reaction they are seeing from patients. gilead came out with a statement cautioning that the totality of the statement needed to be tested this is encouraging and comes on the back of other data on remdesivir last week the new england journal of medicine did a compassionate use study did see a positive

reaction in terms of what to look for next will be the phase three trial data gilead expects results from phase three trials to come through this month and data from patients with moderate symptoms to come through in may those are the results from analysts and looking you through comments from a number of analysts at the major banks. their message is that this is encouraging but questions exist and we really need to wait for answers to come through. to put this in context a treatment will not end the pandemic it will simply serve as an end to a vaccine that will come somewhere close tore 18 months from now

it should be consumed with a degree of caution. back to you. >> thank you let's bring in david stubbs, from jpmorgan. david, would you buy stock on the back of this news that was leaked >> caller: pretty risky at the moment the sheer number of things being tested is encouraging for health care in the long term. health care innovation will definitely dominate this decade. you need expert management to look at the long term. i know the news is very good today, very hopeful that this

brings salvation to the medical situation. right now, that is in the price for that particular stock. secondly, we are not going to know who is going to win this race going forward i prefer the further health care measures in that measure >> david, i want to talk about hope and optimism and the gdp first quarter year on year investors say it is so grim, you might see even more in terms of support. is that your interpretation of how investors should be thinking >> caller: absolutely. the longer the china economy is depressed, the possibility of a major stimulus program the headline under the numbers show interesting patterns here the industrial production side of the economy is returning to normal fairly quickly but the

consumption side is quite limited and slow to get back to normal that suggests potentially behavioral change among chinese consumers and concern about the virus going forward. if the domestic economy begins to lag they encourage more government bond financing and cut some taxes. we haven't seen the big bazooka of support i do think if the evidence builds, it is hard for china to get back up and running. it will be difficult, the global situation will be challenging. for china, themselves, we have seen multinational companies now laying off those in china because of the global china

situation. exactly what we expect china to do a lot more. >> david, how likely is the economy to respond to that given the household to income levels in china, they look very similar to what we have in the united states and japan chinese households are spending about everything they earn and they are borrowing as well >> caller: you are absolutely right. you have elevated household debt in china something that didn't really exist, say, 10 years ago when they were pulling out of the global financial crisis. i don't think the households are too overextended but asking for a major surge in the economies is a little bit of wishful thinking people will be concerned about the health situation and unemployment prospect.

and we know, whether the virus caused the recession or housing, we know we are going to see an increase of cautionary savings not just household but the corporate sector as well falling into a deep hole and large level of unemployment. we'll face additional challenge about getting work forces back to work. the thing we've seen so far have been more like economic maintenance and putting on life support to the other side. seeing the sim lus of infrastructure and ramping up the other side of this to become more healthy that is not going to be a quick

process. >> david stubbs, thank you for joining us let's take a look at the chinese economies then we saw the chinese economy shrink by 7% the first quarter here is over the last few years and the plunge you you are witnessing after the country is using sweeping containment measures beginning in 1992 when it comes to the individual components and retail sales talk about an economy that has moved to consumption those retail sales in march slumped by nearly 16% as consumers stayed at home fixed asset investment, we saw a slump down 16.1% industrial output, that dipped by just 1.1% that was a beat, so better than

expectations let's get out to shery for more. >> industrial output, the only factor, the only number that beat economist expectations giving hope out there. this kind of dismal number huge q1 gdp set us up for what is happening next week the loan prime rate decision by the bank of china and goldman sachs talking about the potential meeting that will be the key event for investors to watch next week as well. all of this important because it was supposed to set us up in terms of getting us guidance regarding the degree of the chinese stimulus response amid

the coronavirus outbreak i do want to also talk about the employment scene as well something we haven't spent too much time talking about in previous hours it did come down a bit from the highs we saw in february as well it came in at plus 5.9%. it is easing but not quite to the level before the coronavirus outbreak because in the month of january, it stood at 5.3%. interesting commentary coming out from their reaction talking about how this jobless data can actually rise by 10 million in the coming months if the authorities in china do not stimulate the economy pretty soon so something we'll be watching very carefully obviously jobs data is highly correlated with economic growth of any country, including china.

this ties in really well with the social stability of china as well >> thank you for that. let's get you more data state side more than 5.2 million americans filed for unemployment last week slightly worse than expected but does show a drop from the previous two weeks as the virus continues to impact the labor mark eight in total, 22 million jobless claims have been hit adding to the crisis over the last month early this morning, we approached 0.64. which means we are well off the highs of midmarch. we've just lifted off some is of the lower ranges as well u.s. president trump has unveiled a three-point plan to

exit the coronavirus lockdown. the american leader said the decision on when to reopen rests with individual state authorities, not the federal state government under the guideline, states will be asked to show a downward trajectory for at least 14 days before gradually easing restrictions but a warning that strict measures should remain even when other restrictions are lifted. blackrock founder larry fink doesn't think the american public will feel safe with easing measures until late summer >> i do believe we'll be able to reboot i do believe we'll have a better, nmore normalized environment but it may not be

until june or july it may be august the economies will be really slow to reboot like you said, because we are such a heavy service side economy. we need to have all americans feeling comfortable, feeling safe at this time, i don't think that many people feel secure and safe >> our colleagues state side will speak to john williams later on at 14:30 cet. coming up on the show, lore ye 'lhe tt teieneto cnbc. wel arhainrvw xt

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. new car registrations in the european union slumped by more than 50% in march as measures to contain the coronavirus weighed heavy in march the decline by nearly 85%. volkswagen, fiat chrysler and

renault also saw double-digit declines volvo will reopen plants in april. the automaker said it had a responsibility to employees to restart production lvmh with a disappointing first quarter result seeing like for like sales plunge, 17% and the biggest brand rising 15% over the last two weeks. soaring demand stemmed for the losses by 5% keep in mind lvmh is a bell weather for the sector

caring soaring past that at 5.6% burberry with a like response. giving us an insight into the bounce back in china giving us a point as hair dressers restart business and we all start to go back to the salons but i wonder if consumers will spend as much as cosmetics and skin creams as they maybe watch their wallet a little more on the back of this crisis. >> there is an element of what is lost with hair dressers is lost and makeup the same with people staying at home. however, you are seeing a boost in pam perring products. people are buying self-care,

hair care and hair color the positive sign is seeing this rebound in china which is sending shares higher. they had warned that sales would be impacted. saying the rebound would come quick in china with he saw l'oreal up with e commerce up 66% in china and up 50% overall for the whole group. so here very interesting for l'oreal, travel retail is important. luxury, kos my -- cosmetics is a positive one when we spoke earlier, we talk about how they expect consumer demand to bounce back as soon as the lockdown eases

>> caller: it takes us to a different crisis right now not after the measure of confinement. what is important to understand, i think. it is not a demand crisis, it is off demand crisis. consumers are eager to buy products they cannot because hair dressers are closed, department stores are closed. but what we know, true for example for hair dresser, women are really keen on seeing hair dresser again. i'm considering when we reopen, there will be strong will to go to the hair dresser to get hair care and color done. that's what we are seeing right now in china >> that was the ceo of l'oreal

here there is a big debate how deep the recession will be in europe and the u.s. on the back of this pandemic and how quick there can be a bounce back l'oreal said if the lockdown started easing in may and june, demand should come back pretty quick. certainly, with what we've seen in china, that demand has come back very quickly sending a positive message to market >> i'm using every odd product i have stored. typically you throw it out after a while, i'm drilling did you know inventory >> keeping every bit >> never used to do that the french president warns the european union will

collapse making gains and which members do not show solidarity an idea opposed by germany and netherlands. coming up on the show, we'll discuss how manufacturers are dealing with the vicein need for ventilators. a look at how futures are fairing. still strong on the back of gilead's potential treatment for covid-19

welcome to "street signs." these are your headlines hopes for a occur drive a broad-based stock rally. futures trade off 700 odd appointments and finish the week on a bullish note. china's gdp marking the first contraction in three decades as the coronavirus brings production and spending to a stand still promising news as a trial from

gilead drug shows treatment of patients and roche is ready to roll out an antibody test. banking in china despite disappointing numbers in the first quarter. the ceo of l'oreal says things are improving. >> caller: we've always seen a strong bounce back after crisis. we've seen that in the past and with other especially deputyics. what we are seeing right now in china is not surprising us lockdown extended. the british government says restrictions will stay in place at least another three weeks as the uk becomes the sixth country to top 100,000 cases european markets have been trading for an hour and a half

and it has been a firm start to the trading session for friday it does mean these markets are trying to minimize their losses. on the ftse a 4.5% pop a dax with a 3% gain solid bounce we may tip positive on the week for the index. french market up 3.3%. slightly weaker yesterday vir sustain modest gains elsewhere it may be near that territory for the week when it comes to italian stocks. 2.1% bounce. it has had weak trading pattern over the course of the week. as we hear reports of the gilead trial, there are hopes it may lead to some treatment in early days that would effectively leak information from a trial

we'll see what that means for the yield side of the market there has been a bit of safety out there in the markets the u.s. treasury yield .63 is where we are trading this morning. in futures, up about 800 initially, now up about 600 on the dow at this stage. the uk government extended the lockdown at least three weeks with a warning of relaxing the measures too soon. we've been watching some early exit plans across europe and also the u.s. issuing a three-point exit plan. give us a sense where we stand in the uk. >> there are two messages coming out from the uk. the official message is we have to see the course of this. in scotland and labor, they are all behind the government on this the death toll is absolutely

devastating. we had the biggest figure in the last five days 861 taking the total to 13,729 the 861 figure was in the last 24 hours the message from dominic raab was that we have to stay the course, see this through until five tests are completed nhs has to be able to cope, sustained fall in the death rate, reliable data has to be consistent, better testing, better ppe finally, they have to be confident there will not be a second wave or second peak that's the criteria and what the government seems to be getting behind the death toll is steady but appallingly high but steady. they think there in a leveling off and plateauing in hospital admissions are showing a

positive move down 3% in the last 24 hours with total beds available in icu have gone up considerably there is a message where we have to see this through when it comes to exit plans. i'll mention it briefly. when we came here today, we talk about ways to see this going forward. we talk about 600 bounds as well the question should be how could this be for workers because of hs 2 it iss it is kicking off again. i don't know if you can hear it. i can hear the constant thudding of drills. there is a big crane there i've seen a steady flow of orange overalls with hs 2 on

their helmets. the message is that we are shut down or locked down. with the fact that hs2 got the go ahead this week let's switch to medical equipment as the first set of ventilator built by airbus and maclaren have been given the go ahead. the uk government says it wants to procure some 15,000 units of the new device the german fan and motor manufacturer ebm opinion papst has seen an increase of demand while it usually produces roughly 100 ventilator fans per

year, it has received requests for some 1.5 million stefan branl joins us now. give us a sense of what it is like to pivot to such a large request. what did you have to do to gear up to meet some of that demand >> caller: as you mentioned, we are trying to do our best to fulfill all the orders we have received on one hand, our technical capabilities are certainly limited. and we need a supply base and chain meeting the need so we are fighting very hard on a daily basis to improve our delivery performance but i am proving the technical capability in terms of getting all of the supplies on the same page with necessary components >> what does that mean when we've got plans for some of the

major auto companies you also service to get back to business in coming weeks as you try to meet demands for medical equipment and help other businesses resume normal operations what takes priority here and can you do both? >> priority is medical equipment as we try the best to meet the demands which we see in the market however, the situation is not as easy because we do have suppliers in different countries where they also have lockdowns we have to discuss with those suppliers to get special permission to supply us in time and we have to ramp up production lines accordingly to meet the demands it is very challenging at the moment we have 16 times higher demand as normal. it is somehow impossible for us to achieve

we have been able to triple the volumes which we have been able to manufacture, so we came perfect 100,000 and we will have 300,000 now available on a yearly basis as we said, we do everything in order to meet these demands. >> i wonder if i can ask you a broad question there has been a lot of criticism about the uk and other countries about the lack of preparedness of events unfolding this spring. germany is on the other side they've applauded german testing and facilities available to cope if we can put it on county-wide lines here what has germany done for better preparation. what can the u.s. and uk learn >> first of all, the support from the government has been very positive in the way that

they provided financial umbrella it was a very unbureaucratic way. they started to support companies whether midsized, small sized companies. we had a short-time work measure. the same measure we had taken in the financial crisis of 2008, 2009 that helped companies to safely affect liquidity. we try to keep liquidity as high as possible. that is important the support which we receive from the government >> stunning success. >> say it again, please. >> i was going to say, i think everybody appreciates the

extraordinary success under merkel on all of this. you're now planning for the future we have a spike in demand, how do you plan for the longer term? you must be asking the same question all of us are asking, are we changing to the new normal where there will be greater demand for all of this or for the longer term or will companies go back to their old bad ways as well it makes it tricky to plan for the longer term, i would suggest. >> a good question we all look forward to this getting over quickly however we see the situation is still very challenging for all of us. we have priority number one, which is meeting the demand from the market as soon as we have met the demands, we have higher

abilities available. we justify long-term demands as well however, i do not expect this demand will stay forever it will drop down again, if availability of vent lags systems are available, we'll go back to a normal way and have the same kind of business we were used to is my personal expectation. >> i'll ask you about the consumer we had weak car registrations and dealerships have been closed overall, they've been told to expect a change to consumers do you think there will be a

fundamental shift in consumer habits whether auto industry or air-conditioning or any other ones you are trying to return to normal do you think the consumer will change after this? >> caller: on the long term, i do not expect. in the short to medium term, i do expect. i think everyone will change their priorities i think everybody will be concerned, afraid of a second wave, most probability i believe the business will still be challenging for the next month or even for the next year to come however, on the long run, i do expect that this is going to balance again and go back to normal and we'll see the same kind of businesses we were used to >> you sound like a busy man trying to meet those needs we'll let you go t

the. the reporting of whether the covid-19 outbreak began in a lab in china authorities have ruled out the possibility the virus is man made but invest gating whether it game from a lab invest gating disease in bats and looking. the results of the investigation are inconclusive so far. brazilian president fired his health minister after the two repeatedly clashed the ousted minister backed the guidelines of self-isolation diverging with the president who has been vocal of reopening the

economy. he has continued to question the seriousness of the virus which has claimed nearly 2,000 lives in brazil. a look at u.s. banking earnings that have been dominating the tape thisee wk.

uber shares moved sharply higher in extended trade despite the guidance in 2020 they will write down nearly $2 billion in investment and expects are he have nuf to decline as much as $22 million in the first quarter british fund man group with assets falling 11.5% to just over $100 billion. the group's strategy with half of man's computer driven funds plummeting over 20%. blackrock's asset management

fell to $6.5 trillion at the end of the quarter down from a record high of $7.5 trillion at the end of 2019 shares higher after earnings per share beat forecast with revenues of $3.7 billion for the quarter. blackrock cofounder and ceo larry fink said the time line to return to work is a key uncertainty. >> until we have adequate, rapid testing, it is hard to see how we are going to reboot from the next 30 days every business is going to be very cautious. they want to be protective of their employees and want to make sure they feel good about coming back to the office let's be clear, anxiety is still very high. with he hope we have the ability to reboot. >> the biggest banks have shored up their finances against the

outbreak the five biggest lenders build up $24 billion with provisions with warnings of soured loans and credit losses. a warning on jp morgan and bank of america the wall street giant's profits revenues down to $9.5 billion despite a boost from robust trading. the ceo said the last few months have seen more volatility than any time in a financial crisis >> caller: we are in a wild period we'll have negative gdp of, i don't know, 30%. in the short term, anybody, i don't mean to disparage anybody,

a ceo that stands by their forecast that was set before this virus hit, i don't know what planet there on we will not hit them in the second quarter we did not hit them in the first quarter. a warning markets could decline 50 percent or more it is too safe to say equity markets have bottomed out. let me give you a sense of what we've gone over the course of the week when it comes to the u.s., it was choppy trade yesterday in the likes of the dow slim change by the finish, which is also extraordinary in this window where we are seeing wild moves on the upside and the down side you've not seen much movement on the flat line. .7% on the dow s&p up by about a third a

percent. health care has been strong. a shot to the up prize nasdaq telling you a story about motivation from this to get behind one of the growth stories. again, technology is the area of concentration. we've had a bounce of 4.6% we are on the eve of earnings season for technology. want to show you asia. we've had rough data to show where investors would be weak. on the course of the week, we've seen gains roughly 1.5%. the other market a proxy australia has had a bounce and japanese stocks outpace with a gain of 2% another hit here with the japanese stock market. safety to support that some sp of that sentiment starts to improve it is positive for the tokyo

stock market in particular europe, this has had a bit of an impact on markets. i've mentioned some of the green. we've minimized some losses for the ftse before we started the session, we were down 3.6% for the week flatten for the market stronger for the dax half a percent stronger as well for s&i weaker for the course of the week for spanish and italian stocks for me, the warning is the reaction from the banks. when we've had a lot of clarity for the sector, investors are starting to turn tail for that sector it is early. we are still waiting to see some industrial numbers >> two pieces of information this week, if you are going to chase the rally and momentum, at

least use the opportunity to rotate your portfolio into some quality. second is begin thinking about who is paying for all of this stimulus is it going to be inflation or taxation when you think about that, work out how you position yourself for the exit down the road steve. >> the only thing i would add is be wear of everyone coming on selling their view let's t let's face it, every time i hear somebody say the bottom is in and we are going to rally hard there is a chance that person has a very big position and is backing it, dare i say it. certain hedge funds have come in be careful who you are hearing from a little bit of clarity coming

through. look at the big moving stocks and stories. gilead, absolutely and complete information beyond belief. auto sector. 51% dive as well that was from the march sector we heard the iea coming out this week and the oil market still plunging iea apparently cutting 20 million barrels from the table oil plunged on the back of that. be weary of people selling and incomplete information >> we are on the same page there, steve volumes have come down the last few sessions on the trade of wall street. from the high of the crisis in march, incredible amounts of volume took over it is just started to settle down on those numbers. we had a glim ams and stunning numbers on equity and the debt

side, geoff. >> a trillion worth of buy backs in 2019 for the u.s. market. is that going to come back in full year 2020 i doubt it very much which is something to bear in mind as we continue to see data points weaken about everywhere you look, the props to support the market are being kicked away here and going higher. have a good think about that as you go into your weekend >> absolutely. i think the companies themselves don't know what to do about those buy backs at this stage. a quick look at futures. higher on the back of the gilead information we've been looking at that is it for "street signs." "worldwide exchange" is coming your way next. ♪

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breaking news, stocks set to surge as investors pin hopes on promising results for a coronavirus treatment as president trump lays out his blueprint for reopening the economy putting the ownness on the states to make the final calls. and china industry doing the first time it has to do with gdp. friday, april 17, 2020 you are watching cnbc.