that's all for this edition of "dateline." i'm craig melvin. thank you for watching. good morning and welcome to "street signs. i'm julianna tatelbaum these are your headlines data dismay. german industrial orders plunge to the lowest level in nearly three decades while service in spain and france sinks further telling cnbc there is still a long way to go >> we are not out of the pandemic we are gradually exiting the lockdown we have not yet reached the point we can return to normal.

>> tentative trade with autos extending decline as bmw warns the pandemic effect will last longer than anticipated. the german hospital operator flags increased demand for drugs and devices. telling cnbc they are prepared for a second wave. >> we are working very closely with the authorities to make sure we have flexibility in termts of our ability to react should there be a second wave as the measures are released. >> a frozen dividend for disney. the media giant cancels a payout as it takes a $1.4 billion hit from the paepd but makes plans to reopen in shanghai next week. the uk becomes the worst hit country in europe overtaking italy as the death toll crosses 32,000 the government grapples to get a

time line for the exit from the lockdown >> a warm welcome to "street signs. let's kick off with fresh data this is on eurozone april pmi, the final numbers for services that figure for the whole is 12. slightly better than the flash estimate of 11.7 that makes the final composite pmi 13.6, just a touch better than 13.5. earlier this morning, we had data come through at a dire level. coming through in spain at 7.1 italy at 10.8, france at 10.2. germany golding up a little better a strong hit to the european economy. the ihs chief business economist saying the extent of the down

turn was laid p bare by record down turns by every country in april. unprecedented rates manufacturing and services sek tr really giving us a taste of the impact the euro trade slightly weaker versus the dollar this morning not just pmis but we have german industrial data that showed a plunge of more than 15% in march. steeper than expected and the worst reading since 1991 both domestic and foreign demand fell sharply as much of europe's biggest economy was locked down in march with the economy factor shut down major sites schaeffler has reported a slight as the coronavirus has led to

weaker auto demand all four of the major region saw lower sales with china and europe suffering the sharpest declines the company cannot give guidance for 2020 but expects earnings and margins to come in below last year. bmw slashed outlook for the profit margins at the automotive unit siting the lockdowns on demand >> let's get to annetta. i suppose for the auto industry, yes, the current quarter is more important. more important is the outlook. what can you tell us on that front? >> the outlook is pretty grim. i think the worst is yet to come for the cross sector and overall economy. the second quarter will be a horrific quarter for carmakers and general economic activity. even if you talk about

industrial production or orders, march was not the worst month because march did only see a lockdown of the economy of 50% so april will be the month that will be very bad that's what bmw is also saying that the second quarter will be a lot worse than the first that they are also very kaushts about the outlook. it could get worse that guidance does not include or reflect the slowdown in china let alonea second wave of infection. they are not very optimistic demand for cars will pick up in the first quarter. they have seen 31% less of cars. china was down by 31%.

that gives you, perhaps, an idea of how bad the second quarter could look like in terms of car sales because demand will be very weak for cars in the second quarter but most likely for the foreseeable future look at the labor market and how people feel confident buying into the luxury car market and the government an government has not readied any support scheme maybe by june, the chancellor said yes >> we'll look out for potential support for the auto sector. a number of financial stocks report this morning. unicredit report a $2.7 billion loss as the bank wrote

$1.3 billion in loans. revenue down 8% year on year as they say trading revenue fall. unicredit did open a little on the back foot but now sharing 2% higher >> the ma ior said he remains confident the bank can raise 70 to 75% of the original target. credit agricole tripled. boosted by 14% rise in fixed income unity a solid quarter allowed it to take a risk. credit ag shares trading firmer 1.3% higher. axa warned the coronavirus will impact the year numbers.

preparing for 500 million in claims of event cancellations. initial indications said growth revenue have fallen 12% in april after rising 4% in the first quarter on the comparable basis. shares in the french insurer are higher at 1.5% looking at broader european markets. it has been a bit of a mixed session. ftse 100 outperforming 0.3%. the ftse mib outperforming unicredit after initially at the open the dax right alongside the cac after a strong day yesterday for the european markets they advanced 2.1% breaking a losing streak. we saw markets rally although that rally faded into

the close in the u.s. and europe and the early hours of trade health care stocks have been outperforming. let's look at the bond markets german trading of negative 5.55%. germany in focus as they launch the first public bond sale since 2015 bond markets sharply in focus after the german court ruling on the legality of the ecb. still a number of open questions and the overall message this whole thing has sent in terms of the mandate and what we can expect from them further as the newest asset purchase program. let's bring someone into the conversation that knows more about what is going on steve and karen are going to join in the conversation

ed, thank you for being with us. we got more economic data out. pmi is out for europe. really painting a grim picture of the real economy. stock markets remain strong. does it make sense that markets continue to rally when the economic data, the real economy looks bad. >> it is all about what is in the crisis we know this economic data is going to be pretty dire because the lockdown has been sudden and dramatic and the selloff will compensate for that. to give you a stat isic in the foonl crisis, it took 200 days for us to hit the bottom this took 20 the focus of the markets is how long will we be in lockdown and how much easing of economic activity will we see over the next weeks if we do start to see the

economies in full strength at one or two month's time, it is more of a curiosity than driving the markets at the moment. one trend that stood out to me is the difference between europe and u.s. markets with u.s. stocks bounce lagging. a few other factors that could be at fla. the u.s. has the tech giants i'm curious in your view, what needs to happen for europe to catch up and do i see that closing? >> there are two factors at play we see outside stimulus from the united states in the form of fiscal and mond fiscal and monetary. we haven't seen anything yet the other factor is that value versus growth.

that europe versus the value market, banking resources in the u.s., we have more of a technology focus one of the key point is with rates even lower at the start of the year or a year ago, that will give the back drop. it allows markets to improve and also for earnings growth to come through. if you want exciting upstart company and in five year's time, your earnings are starting to look fantastic you are saying, we don't really need to pay much for the growth to come through. the u.s. is having that double hit from fiscal stimulus and a strong growth sector in its economy. >> you made the point in research the markets are focusing on the exit from lockdown and easing policy we might be back in the lockdown

situation if there is a second wave of infection. how much faith do we put into the listing of restrictions. the p whole point was to stimulate consumption and demand we heard from disney that they can operate at 30% capacity at best in shanghai when they reopen in the hospitality industry, they are saying it might be 25% of capacity. the stimulus won't work in that sector >> what that easing of lockdown looks like is absolutely critical when you are looking at the broad 5:0 u market it is happening at one, two, three times of earnings. maybe in q4, we see a bit of a pickup around 15 to 20% of the valuation is what the earnings look like over the year.

a relatively small amount especially looking at the european index it is a valid observation. if we do see a second wave, we see the wave eased too quickly our base case, however, is if we do see new cases start to grow, most are doing this two-week review period while not having to go into the full lockdown because it is phased, it gives a bit more flexibility to the economy. >> now is the time to put your money on the table we were over 7,000 in february, we were under 5,000 a month ago. which are we going to hit first? 5,000 or 7,000 >> i go for 7,000. i don't know what's going to happen in terms of the next week or month when we look at the longer term valuation basis, even look at the u.s., which is more

expensive out there. it has a forward earnings yield about 5%, compared to 10-year u.s. treasury. regardless of the volatility of the next month over a longer term basis if you are looking at equity versus bond. if you want to get a return above inflation, equities are getting pretty attractive. >> ed, most of these have got it wrong by cutting vast amount of jobs then if we are going to 7,000? >> it is going to be wide. in terms of the economy, the next few quarters are going to prove difficult. if you are a company that will have more questionable cash flow if you pause your dividend it is key pausing. it is not the expectation the dividend won't have recovered

and be paying out as normal. it is a bit more prudent to be cautious at this time. financial markets are acting on a similar time line. the mechanism can look forward that's why you can see a further rally in the uk and global markets where the economy can stay in a pretty recovery for some time. >> always a pleasure to have you on ed park, chief investment officer. we are going to squeeze in a quick break. spain prepares for lockdown for the fourth time today. we'll hear from the spanish minister gonzalez next i know that every single time that i suit up, there is a chance that that's the last time. 300 miles an hour, thats where i feel normal.

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welcome back fresenius beating analysts expectations the german hospital operator said an increase of demand for

drug for the coronavirus are up and it needs to increase the outlook for the year the company is getting ready for a potential second wave of infection as lockdown eases. >> clearly as we release measures one of the key requirements is to make sure we manage any increase in an appropriate way to control the second wave we are trying to make sure we are absolutely prepared. in spain and germany, we have increased in our hospitals, our icu bed capacity we are working closely with the authorities to make sure we have flexibility in terms of our ability to react should there be a second wave as the measures are released the government has agreed with a draft plan to reopen shops as the country eases lockdown

measures they have called to a uniform approach but warned to lifting things too quickly in span, extending lockdown for the fourth time today. bringing in charlotte with more of what is going on in spain the fourth extension, now, what does this mean for the future? does spain need to change its course given the strategy keeps requiring these exceptions >> it was unsure whether the government would extend the state of emergency it has been in place since march 14 it allows the government to ensure the population and give extra powers to deal with the epidemic and resent ralize the

government to give one chain of command. it has been reduced several times. now if will be it finishes this sunday a new extension for two weeks coming into vote today it seems the government will have enough votes to have it pass through there was a political truth at the start of the crisis, political criticism has been growing against the government as the death toll has been growing. that has been no more voices extending. earlier, we spoke about why the government was pushing to extend the state of emergency >> we are not out of the pandemic we are gradually exiting the lockdown we have not yet reached the point where we can return to this new normal. this is why in this

circumstances, we believe the most prudent, responsible manner way out is to maintain the state of alarm in the truly democratic and transparent manner >> that was the foreign affairs officer from spain the socialist party is minority governor there was some national union, this has been fizzling out that has sent to the right party and more and more against the deconfinement. spain has started phase one has started. there are four phases and they expect to come to a new normality by june or july. this is a real challenge for the government to have this national consensus to execute this

deconfinement. a difficult context here for the spanish government >> thank you let's look at what is going on in the uk. the uk has recorded the highest death toll in europe with almost 700 new deaths on tuesday. while weekly figures by the national stat tisices office placed total death toll over 32,000 let's bring steve in to the conversation >> today, boris johnson is preparing to face off against the new labor leader for the first time in pmqs this comes at a difficult time for the uk government given criticism around the handling of the pandemic what can we expect from the pmqs today in. >> two clear things. it is the right question to ask. what is going to happen? he's wanted to see behind the broader strategy but probing of what the government has got

wrong. i think the government has admitted were they to do it again, what they would do different. one is looking at the death toll and secondly what the breakdown of the lockdown looks like those are the two key areas. on the latter point, i doubt boris johnson will give anything away two dates coming one is tomorrow, which is the end of the second period of lockdown that has to be reviewed. sunday is what we understand, the road map, this three-stage plan to get britain back sto wor will be unveiled vast criticism about the government and the vast care the vulnerable people and elderly. the foreign secretary was addressing this point yesterday. >> there are different ways of counting death

we have had that debate. we publish data that includes all death in all settings. not all countries do that. so i'm not sure the international comparison works unless you know all countries are measuring the same way it depends how good countries are of gathering statistics. widely acknowledged to be a world leader one of the reasons we've embraced that is we want the full transparency, it is because we will be in the best place to tackle this virus. >> the mortal figures is now larger than italy. the government is saying maybe there are nuances in the counting system. the other problem is the economic crisis created. i think by all accounts, he's done a pretty good job as he came in with the furl owe

scheme that is unsustainable give nl the current level. there have been reports of how he does this at the moment, the estimates are that this furlough scheme will cost as much as $40 million pounds back to you. coming up on "street signs," we'll get a closer look at the data with the u.s. as its trade deficit with china falls to a 16-year low. more after the break onnect real. onnect real. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7.

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welcome back to "street signs. i'm julianna tatelbaum here are your headlines. data dismay. german levels plunge to the lowest level service activity in france and spain sink further fren spanish foreign minister says there is still a long way to go. >> we are not out of the

pandemic we are gradually coming out of the lockdown health care leads in the green as german hospital operator flags increased demand forever drugs and devices. the cfo tells cnbc they are prepared for a second wave >> we are working closely with the authorities to make sure we have flexibility in terms of our ability to react should there be a second wave. bmw slumps as the german automaker warns of the demand. the effect will last longer than anticipated. >> prum says the coronavirus outbreak will continue to claim lives but adds that lifting restrictions to restart the economy is a risk worth taking >> one model that is very important is if we did this a different way, we would have lost more than 2 million people. we did it the right way.

we did everything right but now it is time to go back to work. let's get a check on u.s. futures. we are looking at green across the board there. the dow looking at a 130-point rise all three major indices ending the day higher the rally did fade into the close. we are continuing to move higher into those futures if those levels do hold let's check on european markets. it has been a mixed picture. the stoxx 600 is trading up. german and french stocks are on the back foot this morning spain's minister of foreign affairs tells cnbc in an exclusive interview that they need answers she said that transparency from

beijing is needed. >> the way we should proceed for mutually satisfying outcome as to be for the benefit for both sides. for china and in our case for spain very clearly >> the u.s. hit back after blaming china of releasing the virus was a wuhan lab. >> china is lashing back state media released this cartoon lamb puning u.s. accusations as ridiculous. >> officials believe the virus is not man made or altered but have not ruled out it could have looked from a chinese facility last week, china's executive vice minister speaking >> translator: we need to

protect science and keep away from conspiracy theories >> this is an unusual move as president trump intensified criticism today. >> what happened should never ever have happened china should have informed us that they had a problem. >> president trump's opponents charge he's trying to devert blame. early on, he praised china >> according to u.s. intelligence, china threatened doctors who sent early warnings and was not candid about human to human transmission. a new report assesses china intentionally concealed the severity of covid-19 from the international community in early january while it stockpiled medical supplies >> in europe, the uk and germany are calling for more transparency from china as many want to know how this virus started and spread so quickly.

reporting for nbc news, milan. u.s. trade deficit has grown by almost 12% as the pandemic weighed on exports and caused disruption to goods. a decline in trade with some largest trading partners with exports to china falling 14.7% year on year lower demand for electronics and higher tariffs continue to weigh on imports which fell by more than 30% let's bring in emily tan with more on the greater china action overnight. >> thank you we do have chinese markets coming back from a long weekend, a labor day holiday. playing catch up today and markets managing to end on a firmer note. shenzhen up 1.5%

we did get trade data from the united states. with this suggesting that china may not be able to meet its end of the deal in terms of the phase one trade deal that was agreed earlier by the two sides. as u.s. exports down 15% we got to billions of goods in china amounting to $23 billion short of the $27 billion a year ago. u.s. exports fell more than 20%. jo every all trade declining more than 17%. this year china expected to buy something like $24 billion in goods increasing 83% these numbers suggesting that they may not be able to meet that some commentary coming through from treasury secretary steve an mnuchin who says, i have ever reason to expect they honor this agreement. if they don't, there will be

significant consequences in this relationship president trump had a couple of words saying that now they have to buy if they don't buy, we'll terminate the deal very simple. >> we got first of the trade deal from the united states. tomorrow, china will complete their part and release their april figures. that will come through in the morning hong kong time some forecasts, of april falling 18% after falling 6.6% in march. imports likely fell 16% following the 9% the previous month. we'll take a closer look as when the data comes through these numbers will come out tomorrow during the trading day. back to you. >> thank you for bringing us the latest the imf and g 20 have appealed to the private sector

to allow emerging economies to allow a delay in payment over 100 countries with emerging economies. the chief economist joins us now. simon, thank you for being with us clearly a lot of macro head winds for emerging economies on top of the coronavirus pandemic. they are now looking at volatility in energy markets yes, they have proposed the derepayment aid. it has to be tempting to consider capital controls when they look at the outflows they've seen do you think we could see emerging ee kwconomies look to deploy those at this stage >> it is an interesting

proposition and something we will have looked into. similar to what turkey did in the past two years i don't think we are there yet these flows are the anticipation of the free flowing market this will save places like sub saharan africa these will come back once we get out of this dip in the next one to two months. this is my personal opinion. >> you say not there yet what would have to happen for these to escalate in these emerging economies >> i think what we've been seeing in latin america is a big move up in the coronavirus cases in places like brazil to a lesser extent in mexico. i think it depends on the reaction of the leaders in those countries. we've seen strong reaction in

countries like south africa, ghana. strong testing and lockdown in south africa and sub saharan africa much more proactive than much of europe during this coronavirus. the next step would be any negative reaction from the leadership as we've seen in other cases in this world we need to focus on any possible second virus wave. >> i don't know when we first met in vienna. i'm guessing 14 or 15 years ago. i want to touch on something julianna touched on, commodity, energy plays they've been badly hit do you see any signs of a medium-term recovery in commodity plays? if you don't, that will put more pressure on emerging markets,

doesn't it >> you are exactly right what we saw in april was a shamble in opec countries in april with the pumping of supply they findly got their heads together and pulled back in supply we are starting to see this now. assuming that remains in place, we'll start to see an excess of 5 to 10 million barrels a day. that doesn't take into account any pick up in demand which i'm convinced we'll be seeing in the coming weeks in europe and then in the united states the automobile, the car may be used as a social distancing tool as people use it as a transport tool >> i've obviously broad brushed emerging markets saying they are going to suffer. countries such as india perhaps

the biggest emerging market player in all. has that been enough of a stimulus or will countries of net producers continue to suffer because of the global malase >> the likes of india for example, china, turkey really benefitted from this they've been filling up reserves and storage capacity to the brim india is filling up ships to be able to use this once the economy comes on board again on the other side, you've got sub saharan african countries like ghana and due to all of the political sa than begans i know i sound optimistic.

i believe in human in our and innovation i believe we'll see this pick up we've already seen this in bond prices in sub saharan africa >> i want to talk about argentina. they come sharply into focus what is the medium term economic narrative for argentina. yes, investors might be able to look past those years given the shock. more broadly, what is going on there? >> that is a very good question. honestly i've been looking at argentina for a good 20 to 25 years now. we continue to see this roll back into crisis situations. too much borrowing a lack of leadership capacity

not only seen in argentina but is a deficit in this world as we look ahead, what they need to do first is get some sort of agreement in place with bond holders and then try to move on. the forcing it has been doing at the moment is not quite working. let's face it. argentina back at the past century of the 1900s was one of the strongest economies in the world because of massive grain exports, food exports. this is the way into the future. the other thing is tourism but that is being hit now with the virus. there are plenty of things argentina can do, they need good leadership >> but, but, simon you picked on the major thing. these waves will be better sorted out by having better pricing. you mention tourism.

i meant tourism in the bond market let's get people driving them in we need to get out of this pessimistic drive or haul. we'll see the pmis or all the data coming out for april, which will be terrible, it will be 100-year terrible. they are going to come out let's face it. global funds pension funds. mutual funds are invested. probably 10% holdings probably around 4% to 5%. this needs to change if anyone wants to invest in markets, a good portfolio of funds is where they need to be >> thank you for joining us. coming up on "street signs," disney cuts its dividend as the

coronavirus weighs on its operations we break down the numbers next these days staying connected is more important than ever.

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welcome back virgin atlantic will cut up to 3,000 jobs the global grounding of planes continue to impact the carrier the owner has come under scrutiny for requesting bailout. elsewhere, norwegian air plans to raise $40 million in the stock market they will issue new shares at 80% discount to closing price on tuesday. after share holders improved a plan to convert $1 billion in debt drawing up to 2.7 billion

crowns norwegian's competitor, scandinavian airlines said that coronavirus is likely to have spoiled the important summer season for this year >> caller: you can very much view the important summer season as a lost cause. this is what most airlines see now. of course, this is not a great thing for airlines given how important the summer season is given the profitability. we view the summer season as gone we'll continue to produce a little bit domestically like we are doing now. >> u.s. airlines are burning through $10 billion a month. according to prepared testimony by airlines in america

estimating carriers are average 17 passenger and less than 30 customers on international trips. after nearly grounding 50% of their planes airlines warn the sector is facing further scrutiny and will testify in the senate later today. >> the white house task force will wind down and focus on the economic recovery. more than 70,000 people have died from covid-19 a second team has been a sem belled for what they call is phase two. >> one model is very important is that if we did this a different way, we would have lost more. much more than 2million people we did it the right way. we did everything right but now

it is time to go back to work. >> president trump broke his long self-isolation to travel to a honeywell factory that produces face masks. the president did not wear one on the tour while signs ask visitors to wear a mask. disney decided to freeze its dividend for the first half of the year karen, some encouraging signs of a gradual return in china but clearly not enough to get the stock going. tell us more >> $1.4 billion hit from the pandemic it is like a battle scene. the parks business, movie

business, new streaming business, which is the junior superhero here and many other divisions that have been strong, include ug broadway shows have all taken a hit. collectively, none of them making a difference to the earnings starting with the parks. this has been a driver in recent years. they've been closed starting with the chinese divisions and moving across the world. shanghai will be the first park to open. that may sound positive. what you are seeing, they will try to ramp up to occupancy of 30% at best. it means many guests wearing masks and limiting crowd control, density, temperature checks i wonder how much of that ruins the disney experience. moving on to disney plus

the new streaming system has been a win it has come to the market at the right time with a ramp up of 48 million subscribers. you are seeing a lot of money with investment and when it expects that to be profitable. will that translate to anything that will monday ties down the track. they need to make movies for content library and make money how do you bring that back into production if you've got social distancing on the set. what will it look like in the box office when it goes to the cinemas opening at 20%, 30% capacity across the board, it's challenging for the company. they have taken a hit to the dividend, which seemed obvious when they furloughed so many workers. 100,000 workers.

they couldn't have gone ahead with paying that dividend anyway a quick note of who is running the business is it bob iger or bob from the parks. we did see bob iger startup that conference call yesterday. >> very interesting, a management change happening in this environment let's check on u.s. futures. yesterday, wall street ended the day higher all three major indices in higher t higher territory u.s. household ending 2.1% higher financials were down about 7 basis points can you see the dow jones is set to open nearly 130 points higher, s&p 500 and nasdaq also posed for a stronger start it has been a choppy session in europe this morning.

the stoxx 600 has been gaining some ground in the latest moments of trade looking at regional trade, ftse 100 and ftse mib higher. cac down about 30 basis points we've had a number of corporates reporting today in terms of the macro, investors are beginning to ask what the recovery will look like as economies around europe begin to reopen that is the big question and the disconnect we are seeing between financial markets and the real economy. that's it for the show, i'm julianna tatelbaum orwi ehae"s next. these days staying connected is more important than ever.

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it is 5:00 the president says there could be more american lives taken from the coronavirus but reopening the american economy must happen. the fallout ahead. >> trump looking to wind down his coronavirus task force disney declining and theme parks closed there is perhaps good news in the stock reaction can they survive new reports on how much cash