and the other? far more. [theme music] good morning welcome to "street signs." i'm julianna tatelbaum these are your headlines >> european stocks opened sharply lower on news of a coronavirus drug failing its tests. meanwhile, autos and banks are leading losses after s&p cuts its rating on commerce and louers its outlook for deutsche bank >> lufthansa plunges to the

bottom of the stoxx 600 after the german airline posts a loss and warns it will run out of cash in weeks if it does not get government support >> nestle sales drop as the lockdown bites but they say it is too early to know the impact. the spread between the italian and german tenure lead ahead of the rescue fund unresolved despite more support >> translator: substantial investments to the european union will be necessary. i have made it clear we will not be continuing before the pandemic this will also be a mart of the pandemic in the future

retail sales with a record surge in march not enough to help with the free fall in foot fall and other goods. a very warm welcome to "street signs. fresh tape out of germany. painting a grim picture now crossing the tape, we've got the ifo business survey showing the business climate index in april has come in at 74.3. that's well below expectations of an 80 print the current index has come in at 70.5 in april just below the fra forecasted 81 there. the german ifo says the

coronavirus crisis is striking the german economy with fury the german index has crasshed to the lowest value ever reported companies have never been so pessimistic about the coming months no surprise there given the expectation on the pmi front in that german business moral trading 40 basis points. that step lower had already been under way and not helping things currently trading on 107.34. we are reacting on news from gilead's remdesivir considered

an experimental treatment. news around this drug in a trial in china showing up that patients are not responding well to the drug put a dent in u.s. markets. we are seeing equities coming under pressure this morning. we've the ftse 100 down 1.4, the dax down 1.7 and the cac as well italy ftse mib down 1.3% investors in europe also reacting that eu leaders left several key questions unresolved after the pivotal submit yesterday. on that front, we are seeing the spread between german and italian bond yields widen on the possible recovery package. despite german chancellor saying they will spike the giving to

the recovery fund. task with laying out the coronavirus emergency fund expected to set aside at least $1 trillion euros. member states are split on how relief should be dispersed germany has ruled out. merkel stressed any increase in eu contributions would also serve as investment into the block's future >> translator: substantial investments to the european union will be necessary. i have made it clear, it will not be a matter of simply continuing as before but a matter of investing for the future for germany, of course, this also means we must expect higher contributions than we had planned for the last budget negotiations that is right and good

this crisis has hit us all but affects eu states in very different ways >> let's bring in the president of the ifo institute thank you for being with us. the numbers are pretty dire. i don't think it should come as a massive surprise given the numbers that came in yesterday for germany. now the ifo showing the lowest value ever reported. is there anything surprising in these numbers? >> the decline isn't surprising. what is maybe surprising is that companies report very bad assessment of the current situation but they don't expect any recovery in the next six months maybe one could have expected that maybe that could have gotten worse and there could

have been an expectation in recovery this is something we do not see. maybe a reflection of uncertainty or certainty of no recovery it is difficult to say anything about the coming six months. >> clemens, good to speak to you today. germany got it right last time it is a scheme that has been rep indicated in the uk and around the world. looking at a furlough scheme is it going to work this time? >> caller: it is going to help it does help employees they need to live on something it does stabilize demand and keep employees in contact with their companies. it doesn't destroy jobs. the question will be how will

the recovery come? will it come this time and will the structure we have after this crisis be the same as before in germany will automobiles come back if the industry doesn't come back, the short-time work scheme doesn't help because the allocation would be to other companies so that would be very painful. it is not clear it is going to work in the recovery >> you and i have chatted about this many times. germany recovered from the last financial crisis, i don't believe other economies have recovered. does germany need to take a bigger role than last time around >> it certainly does

i am under the impression it is under way. it cannot be done by germany alone. the eu needs to react to this crisis it's currently unclear who will be hit the most if we see the crisis as in 2009. germany was among the country with the biggest decline gdp we don't know if germany, spain, france will be hit most. in a way that is good news because the eu still has some time to create assurance a fund that will help the country's most affected. we know all countries will be affected that means each individual country can only expect limited help from this >> clemens, on that point, germans used to paying a unity

tax, they started paying it in 1991 to bring in the east after the fall of the wall are germans ready to start paying another unity tax which is ultimately what this fund will require >> caller: in the end, yes there is no way around that. i do not think it will be an open income tax. i don't think it will meet a lot of resistance. dedicated to building up part of one's own country is different from for another country we must remind ourselves that the eu is not a country. some are thinking we could create one country but there is joint military we are not there yet open taxes for other countries

will be difficult to sell in germany but there is willingness to show solidarity the sail yens will not be the same as unity tax but germany will contribute. >> can i circle back to the ifo data what we've seen in the services pmi is a very, very poor capex intention going forward. can we extrapolate that it will be a lot harder and longer to get people back in jobs. ultimately, that suggests the private investment is also collapsing >> no doubt that is collapsing we know companies postpone their investment plans i think currently, people are starting to understand that the recovery will be very low.

they understand that they will need to live in a different type of economy a corona economy until 2021, even 2022. there will be no vaccine the expectation is that the economy will be at a lower level for a long time. >> professor, what does the recovery look like if germany is able to reopen its economy but others remain shut that feels like the projectry we are -- trajectory here then you look at the united kingdom before the government is reluctant to even begin talking about. >> caller: i wouldn't think there will be a massive opening.

there is a high risk of a second wave angela merkel has pointed out that this risk is underestimated this will go slow. it will be difficult for the german car industry to open up as long as the factories in northern italy are shut. this will be a very slow process and demand will be lacking its export industry will be hit and economy will be hit overall and much more by the collapse of demand in other countries. the recovery in germany will be very slow. >> professor, thank you. steve and geoff, thank you as well pushing on to one of the corporate sectors in focus today is the banking sector. s&p has cut commerce bank rating and lowered outlook for deutsche

bank to negative expecting a serious recession and would be challenging for co commerzbank. there are down there's size risk lufthansa after posting a loss of $1.2 billion euros in the first quarter. they have warned the government it will run out of cash in weeks if it does not get assistance. the company is bracing itself for, quote, considerably higher losses in q2 annetta is on the phone with more a sharp down side to lufthansa this morning what is so much worse about today's news >> caller: i think there is one

sentence in that recording where it says that direct equity stake could also be on the horizon meaning nationalization could be one scenario nobody knows what is going to happen with the shares as such if we look at what we are hearing from lufthansa today, it is that we are running out of cash within weeks. the ceo told employees that the company is burning $1 billion per hour, which is an enormous amount of money despite the fact that they have put almost 9,000 of staff on state pay so they

don't have to pay them nobody knows whether we are going to see a takeoff in aviation activity. that's the problem here. even though, early on, they were saying we have 10 billion they could lend again it is not possible credit markets seem to be shut down, even for a carrier like lufthansa. no bank wants to have the risk on their books because nobody knows when airline activity will pick up. they are not only facing the operational costs but also multi-billion euro bills it is the perfect storm for lufthansa. we might see a rescue package as soon as next week, which could come from various countries.

of course germany's rescue plan will be part of that deal. back to you. >> thank you for that. we'll squeeze in a quick break. when we come back, retail sales in the uk plunge in march as lockdown restrictions take their toll on the sector more when we come back you doing okay?

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welcome back nestle has posted a rise beating expectations as customers stocked up on, you guessed it, pet food and coffee to prepare for the lockdown total sales for the period dipped necessarily backed its 2020 profit saying group performance remains resilient. group shares trading higher.

posting sales to $8 billion euros due to an unprecedented demand for food. the traffic in the french market since the lockdown also benefitting from a strong performance in brazil. russia's biggest food retailer saw demand increase. the company attempting to expand digital services during the pandemic which has so far claimed nearly 600 lives and affected thousands in russia the cfo of x5 will join us now geoff will also join us. thank you for being with us this

morning. how have you fared through the last few weeks >> hello and thank you for inviting me. it was an interesting time for us last month. we faced a high demand both off line and online operations through the last weeks of march amid the covid-19 situation. we were able to provide an interrupted supply to the stores the april situation stabilized we are living in the new normal situation. for us, i would say the biggest story now is the development of our online platforms because we have two propositions in that

respect. the online super market and express delivery from local proximity to local residents we see a huge demand for that. in the express delivery orders in february because we just started this proposition at 600 per day. now it is already above 10,000 per day. the advantage is that we have almost 16,000 stores in russia in a flexible way, we can roll out this model quickly with our stores the picking of food is done by employees within the store and then delivered by a courier to the local residents.

also influenced the increase in sales through the first quarter of this year we have strong results, as you mentioned, 16% revenue also in the margin which is a very strong result for the first quarter. still, we are affected by the situation and we have additional expenses on ensuring the safety of our employees it is not a very simple situation for us >> i love the russian understatement, you said interesting times. they certainly have. the challenge we've seen for a lot of retailers like you in the west has been just keeping supply and lodge is call chains working effectively as you have

seen workers go off and you've seen other issues and had to move to other channels to the consumer what do you think the trend will be going forward given that russia is still relatively early in the curve managing the coronavirus? >> see, i think we do benefit from the fact that almost 100% of our core goods are supplied internally in russia the share of goods is not that significant. our core product categories are domestic that's why we don't have significant exposure and decreased oil prices so far has

not had significant impact on our operations one of the operations of our core suppliers in russia i think that has actually helped in march to provide interrupted supplies to our customers. >> thank you for being with us best of luck serving all of those hungry people where you are. cfo of x5. uk retail sales fell in march. the volume in sales plunged 5.1% from the month of february steve joins us with more the data and the numbers here in the uk really staggering, what is this space going to look like when all of this is said and done is. >> let me show you a visual

metaphor let me show you one of the busiest streets in the world oxford we are now into the nine hour. the start of shopping. the start of the weekend there is no one person there as you can see. you've got some of the biggest retail operations on the planet. they are empty not working. these march februarys are going to get worse april will be worse. let me show you something else, this is a building site. i'll be quiet. it is hard for me but listen can you hear the drill you see men working with hard hats there is a lot going on in construction a point i've been trying to

make certain industries with the uk without doubt are proving that they can work with social distancing we are hoping this doesn't put extra pressure on the nhs. that would be devastating. we need the testing, the tracking, the ppe. for retail to be shut down like it is now is devastating for a consumer led economy whether the u.s. or the uk you said something, you said the record figures for march won't be a record for long because april figures will blow them away we are going to see a host of not just businesses here but massive businesses will go bust. they'll join the likes of oasis, worth house, laura ashley, re

restaurant chains. online isn't going to save a lot of these food was strong but the non-food retail sales will be wiped out unless the government will work out how to get these online. the costs will be through the roof and the foot fall in the stores will still be limited i wish them luck i'm not sure how they'll find a way through this back to you. >> i hope you get mike a delicious coffee for all that fancy camera work. we'll take a break and when we come back, we'll be talking pharma an inadvent ant post shows a new drug that could help with the

coronavirus failed a test. more after the break

welcome back to "street signs. these are your headlines european stocks opened firmly lower as news of a failed coronavirus drug trial weighs on sentiment. the s&p cuts the rate on commerzbank and lowers outlook for deutsche bank. sentiment catastrophic as the ifo institute says german morale falls to the lowest point ever recorded. the spread between italian and others widen leading to the rescue fund unresolved despite angela merkel pledging more support >> translator: substantial investments to the eu will be necessary. it will fought be just a matter of before the pandemic but also

a matter of investing for the future no more funds to fly lufthansa plunges to the bottom of the stoxx 600 after they post an operating loss and warns it will run out of cash within weeks if it does not get governmentsupport. let's take a look at 10-year yields the spread widening between theithe italian and german bund. leaving questions despite that the german chancellor warned against recovery you can see italian 10-year

trading there. looking at the markets following a mixed session yesterday. jobless claims showing millions more americans claiming unemployment sentiment dented after the discouraging report on the gilead drug remdesivir gilead said a new study of a drug that could help with covid-19 is inappropriately characterized an inconclusive. this comes after a leaked report that the drug remdesivir failed in the first trial news sent shares in gilead sharply lower. you can see they ended about 4.3% down.

it wasn't just gilead affected by this news part of it is hopes around remdesivir have been building in recent weeks we've had video discussion about the outlook in studies in chicago raising hope that patients had recovered rapidly after taking the drug. new england journal of medicine posted good results as well. the news released suggested that one of the trials in place in china, the drug did not show any benefit for the patients that took it. a lot of caveats need to be taken here around the data we don't have the full picture yet. we will have more by the end of this month we'll have the results from one of the two trials. this one on severe patients that will come through in april the other looking at patients of

moderate affects of covid-19 the bottom line here, the market is very, very sensitive to any news flow around potential treatments seen as a crucial bridge to getting to a vaccine which is still more than a year away according to experts. >> sanofi is sticking to first quarter guidance on the back of growing demand for pain killers. the french pharmaceutical also got a boost from the critical care unit. it said about half its sales growth was attributable to the virus adding to that may faed in the second quarter the next guest that says trials on the new drug have only just begun and it remains uncertain

when the medicine will be available more widely. going to doctor aja. steve will join us as well i want to pick up on comments around potential treatment for covid-19 this news around gilead's remdesivir has shaken markets. what is your spence in the medical treatment around hope. >> it is anovel virus. i think remdesivir, there was news from the beginning from wuhan that it was being trialed. it is difficult to make provisions if it has flopped it is difficult to know other

comorbidities that patients had or how long they were infected we are doing the right thing moving forward and so clinical trials can take place. >> fair enough thank you for weighing in on the treatment side of things on the ppe side of things, bringing it back to the crucial issue here in the united kingdom. in the medical community yourself, what is your sense around the shortages in ppe. is this situation improving? >> it is improving now however, it is variable. i think the people in icu have got much better care i know where they are seeing

covid patients have been provided better ppe now. i fear it is already too late because any poem who were exposed without ppe, we haven't seen the results of that we'll see in a couple of weeks seeing patients without ppe, getting infected, seeing more patients it is not just about protecting the doctor but also protecting the patient. >> dr. jha, there are many big killers in the united kingdom. we know mental health will be a big effect cancer, heart disease horrendous killers. i don't want to take away the toll of covid-19 but have we taken the focus off many other

issues >> we haven't put in undated focus. it is a serious thing. so is diabetes and heart attacks and everything what it has done in general practice where i am is created a fear in the public to actually go and see their doctor for things that they would normally do general practice is very quiet at the moment. iraly quiet. i think you'll have a massive back log when lockdown is over where people have been sitting for a long time for fear of catching covid-19. the risk of sitting with chronic disease getting worse and the risk of catching covid-19 and the outcome. they need to know the risk/benefit ratio and speaking

to their doctors i definitely think that will be an issue for the next coming weeks. >> technology may provide for the solution that you and others have had too much with visits to the gp and anything they don't need is there a solution going forward. will they be allowed to triage and rather than being in the gp surgery? >> there are many things available. now doing video consultations. that is a perfectly good way to assess to a degree how a patient is doing while keeping doctor and patient safe there are a lot of technologies available where we can monitor patients from home

oxygen saturation and blood pressure monitoring that can take place from home also i've recently set up a company where people can access a doctor when they need, even after hours. we have a range of facilities where we can access that patient remotely people are scared of going to the g parcp and going to the hospital why are we not making more use of that. >> thank you, doctor, for being with us. gp for the nhs we'll take another short break coming up, we'll be talking tech netflix raises fresh debt at a record low borrowing cost.

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shares in intel slump after the chip maker declined to give a full-year outlook. despite better than expected revenue and earnings in the first quarter amid greater demand for pcs warning a short-term surge for demand of chips could wane we'll get more on those earnings later today when i tell ceo bob swan talks with our colleagues netflix is raising $1 billion in ferb debt the streaming giant plans to issue euro bonds with a record

low 3% coupon. netflix has turned to other corporates to race fresh bonds the ecb has announced it is relaxing collateral rules after the fed made the same move weeks ago. >> in the u.s., all the u.s. jobs created since the last financial crisis have been lost in its last month after more than 4.4 million americans filed for unemployment insurance last week the total worse than expected as the virus and stay-at-home measures continue to impact the u.s. labor market. in total 26.5 million jobs have gone away. turning to the april nonfarm payroll data which is released in two weeks u.s. president trump said he

may extend the social distancing guidelines beyond may. he said the u.s. may even go beyond that. he also pledged to work with state governors about the lockdowns. >> i've spoken to several governors and senators about it. we are working with snartz on the other side of the issue. we are working to do what is right for the people of this koifrpt a country and particular state we'll see what happens bank of china retail customers are shouldering some of the losses they speculated on the price of crude oil buyers are facing at least $85 million in losses. following the crash of may futures earlier this week. we have this report from hong kong >> reporter: it was an $85 million lesson for bank of china

speculating on crude oil buying crude contracts like wti and brent. the historic negative prices resulted in $28 million losses and $56 million owed to the bank of china by investors. the bank settled when crude was minus 256 yuan a barrel. it settled the contract in accordance with guidelines previously disclosed they've halted new positions on similar products they avoided similar problems because the product settlement day was a day earlier. back to you. let's get a check on oil prices now and see where wti and brent were trading you've got the brent contract over the course of the week down

24% to $21 a barrel. this comes alongside the plunge of wti that may fall to negative te territory for the first time we are now looking at the june numbers at $50.90 a barrel questions remain whether we could see similar selling on this june contract as it rolls closer steve flagged this question earlier this week. steve, geoff, i want to bring you guys in here on the oil story that has rocked the markets this week. one aspect is how it shed light on the retail investors who really suffered here geoff, i'm curious what your take is. >> let me park the retailer here and i'll defer to steve on the oil side i think this raises all sorts of

new and interesting questions again about the state of china's banking industry and ultimately what the risks are for investors in the chinese economy at this stage. before we got more details about the 3,700 investors who may have lost out significantly here. earlier in the week, we heard from those again saying there would be a new push on trying to reform the banking system there. after the end of last week, we heard problems from the bank of gansu that is trying the information around the stock market a lot of news we have heard from

investors that have pledged and sets up another house of cards that we have seen. i encourage our audience to watch what happens next in the banking sector a lot of debt, there are concerns about creditability even as we talk about china coming out of this crisis. clearly retail have been mauled in this story. i'm hearing from the chinese press that maybe the losses are higher than we've seen stated from some other points this is again, a reminder about the caution you need to exercise at times like this where you see very volatile markets and it is hard to see a proper price recovery >> you've heard this story

back in 1991, i was a young derivatives trader i had a position on ftse i screwed up probably the biggest mock up i did as a young trader. i needed to buy the march future that was expanding on me it happened. it taught me a lesson. it doesn't happen again on that move on that march time roll for years and years afterwards the only thing i will say is these things tend not to happen two in a row because people are aware of it next time around or regulators will be looking at this to see what happens that said, there are some ingredients still clearly in place. that could happen again on the june expiry, possibly july and after. a lot of those investors we have been talking about may not be playing this time around a move in this position in the

etf, owning the product itself and moving onto the futures as well a lot of reasons people might be bitten and be careful. getting away from the technicals to the real oil market there is indeed trouble. way too much floating around way too little storage around and usage. the more business like this behind me, construction that can get going, they need aviation to come back, retail back as well the problem is, if the supply isn't cut aggressively enough, this will be back. >> steve there is no doubt about it that the volatility in energy markets this week have contributed to the down turn in equities to the u.s. market. looking back over the course of

four days of trade, let's look at u.s. futures and see what we are looking at for the wall street open today. a bit of weakness in europe after the news of gilead's remdesivir discouraging data on the potential of that drug as treatment for the coronavirus. weaker on wall street. the dow jones looking to open some 100 points lower. s&p and nasdaq also posed to open lower that's it for today's show i'm julianna tatelbaum "worldwide exchange" is coming up next. please stay with the channel save hundreds on your wireless bill

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the president says he may extend physical distancing guidelines until early summer. stock futures are down with the major indices lower on the week. the house signing off on nearly $500 billion of aid for small businesses one republican looking to close congress's checkbook permanently on the matter. and companies vowing to repay the money they've received in