gerfa: i'm glad we're back. keith morrison: wonderful, wonderful. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [music playing] . welcome to "street signs." these are your headlines >> we have a record contraction in the united kingdom. gdp falling 5.8% as the lockdown takes its toll data helping british home builders to trade higher caution on capitol hill, the white house expert warns senators reopening the economy

too soon could have dire health and economic consequences. >> there is a real risk you may trigger an outbreak you may not be able to control which will set you back >> load on the high seas warns container volumes may fall as much as 25% in the second quarter. how the virus will hit global trade. >> protectionism is a key risk and getting bigger as part of this pandemic as countries saw trying to protect their businesses it is no doubt in my mind it is the wrong strategy >> the french group pulls out of the take of the bermuda based partner turning shares sharply

lower. the uk economy contracted a record 5.8% in march economic activity in the first quarter slank 2% output in the services and output fell sharply but not as low as expected. retail sales plunged 19.1% as the lockdown weighed heavily on the sector it is the biggest monthly fall since the brc began the index in 1995 we've been looking at that data but we know there is worse to come in the second quarter when we warn the contraction could be more than 25%. let me know what you make of that starting point. >> i was fascinated about what

happens next it is all very well you and i pontiff indicating over the gdp data i can't tell you how much anticipation i have about what happens next as you say, the worst scenario is a 35% decline in the second quarter. the bank of england with their smaller 25% as well. the data is smallest as we've talked about in auto sales is there going to be some fight back from building, retail and auto as well i think we are all looking on. the government with this furlough scheme. 1 billion services reported. pick a number, 40, 60 billion

pounds is that enough to get people buying properties from tens of thousands of properties on sale. i've seen the e-mails come through. i spoke to barrett developments and they are coming back all the big house builders are open new regulation and framework surveyors. legal professions. they are all on notice to get going with safe covid environments even with retail, guess who is opening on monday? ikea is opening across the country. that is going to be fascinating if the retail comes back and people start buying in bricks and mortar again you have to fully staff them and only let a certain number of guests and consumers in at any

one time it is fascinating to see what will happen next >> i past a store yesterday that reopened that sells mostly pots and pans and candles but has one shelf of dog food and managed to drag a sign outside which allowed them to open at this point. but that tells the story of retailers, desperate to open at this stage let's get to our guest, suren. i want to ask you about the gdp numbers. a couple of bright spots we clearly note the numbers are going to get worse what is your view on the future and what these numbers represent today? >> caller: these numbers are looking a little in the rearview mirror it is telling of the record gdp

in march and also the broad based nature of the slow down. we saw all the main sectors with big drops and outputs in the first quarter. given the speed in our uk economy will largely get bigger and more significant drops in gdp in the second quarter. we've seen banks and others probably in the right ballpark what we are likely to see. >> can i ask you about red tape around coronavirus there have been concerns about companies that might be facing cash flow issues and suggested that flying experts in the production line might be an issue because of the 14-day quarantine what do you make of big business they might have to contend with?

>> depending on what the business are and in the area where people come over for a couple of days previously doesn't really work in the new normal that is a concern. we are hearing construction supply chain but that has to be done on a limited basis. we may see that more as we restart the economy. starting to see a build up of their own resilience and starting to shorten their supply chains >> the furlough scheme, the numbers being thrown around. one million supporters as well i know the bcc will be supportive but can the economy afford it? >> it is a really important scheme you will see by the take up that

it is a crucial role trying to protect large parts of the economy in business as well. one aspect is the great flexibility in the scheme, not many asking which i think is important. and affects the start of the economy. clearly with such a huge scheme, there is a huge cost you get the cost that nothing is greater than that. as we move through and rebuild the economy and get to the recovery phase, how that money will take back >> i feel decent asking about it these days because it is so irrelevant but brexit, is it on the mind of any commentators at the moment

>> coronavirus is the center of mind at the moment there has been some talk around brexit and that transition period coming up businesses are looking for certainty. it is where businesses are looking at day to day and weeks and months >> today is the next phase as we see a number of businesses get back to operation. how clear do you think the guidance has been from the government and prime minister about the measures businesses should adopt to keep workers safe and what they can do at this point >> caller: the guidance came out on tuesday does help it does show there are to be huge changes in the way many businesses need to operate no matter what sort of business they are i think what they are trying to

do is understand the guidance and how each of their business will adapt to those changes. guidance has been relatively clear in terms of what businesses need to do. what they do now is see how they are able to adapt to new guidance, new changes and new normal >> the head of economics at the british chamber of commerce. a dire warning saying the virus will spread if the country opens up too soon. dr. fauci added that the u.s. death toll is probably higher than the official toll of 80,000 and states should not relax restrictions until they know they can handle the inevitable rise of covid-19 >> you may not be able to control, which will set you back not only leading to some suffering and death that could be avoided but could even set

you back on the road to try to get economic recovery. >> california governor announced the state is entering phase 2 of the lockdown easing plan and seeing more workers returning to the office and some dine in services opening and some malls opening for pick up. the california university system announced all classes are canceled for the fall with courses to be conducted on line. twitter asked staff that can work remotely to do so permanently. facebook and google will allow workers to work from home until the end of the year even if considered safe to return to work sooner. all business travel and in-person events have been postponed until 2021 >> a look at the european

markets been trading fairly weak from the outset. you can see with all of the red on the map, tracking down 1.4% some of the weaker markets, it has been the french market down. a weak session playing out for french stocks, german stocks less for the ftse where we are trading down by 1.5% it is the pound providing a little reverse on the trade as many investors weigh out what you you are seeing in terms of spending programs and what that could mean the debt at 122.70 the italian market dropped by 1.5% investors closely eyeing those comments from dr. fauci about opening too soon

not just the health but economic factors. >> it is autos, travel and leisure and banks trading weaker some of those sectors have concerns they've been hit hard. when it comes to the banks, all of these comments from jay powell and any mention of negative rates in the united states and the price and potential of moving south into negative territory >> just a quick note if you want to get involved in anything we are talked about, tweet me @streetsignscbc coming up,the virus fall out on commerzbank's earnings. so, no more tossing and turning. because only tempur-pedic adapts and responds to your body...

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to the latest in corporate news shares are trading higher following reports that uber has made an offer to buy its american food delivery

competitor grubhub the group has been negotiating a deal to offer 1.95 uber shares covea has walked away from a $9 billion deal. the transaction would have seen exor receive a $3 million cash return but they are no longer able to go ahead with the purchase the take over is the latest of extremely stressed m&a with the likes of boeing and victoria's secret the bankings megamerger in italy. the regulator said given the importance, it would assess the

take over on banking and insurance markets. would be europe's biggest banking merger in a decade the consolidation well argued by experts. expecting a deeper than expected loss of 395 million euros. blaming the slump on the market turn on coronavirus and tumbling oil prices the bank will halt payouts until october. >> commerce bank will see a stock drop the coronavirus outbreak hit restructuring efforts. refusing to provide an outlook for the year and did insist revenue will remain stable provided economy sees a gradual recovery and avoids a second lockdown >> a lot of guidance out there

walk us through those things from come emerzbank >> i guess it is a bit of a disappointment that corporate clients came in at an even bigger loss and business customers came in at a lower operating profit than expected now they are expecting a credit lock this year between one and 1.4 billion euro they have a very big loan book they are more like the lender to the german it has historic roots. deutsche bank was operating for many years that's why they have that big

loan book and probably also the friend of the german economic down turn during the course of the year what are they saying else. that interesting thing that they are saying in their outlook section. looking at what the coronavirus is doing to their business model. what they are expecting is the update, if not even more because we know that they have hired mckenzie going forward and now that they are not selling m bank in the unit that is into that restructuring on the strategy from last week, last year. what more we are expecting during the course of the first half or towards the end of the second quarter to give us a new update perhaps a new restructuring plan where they may come out with bolder cost cutting and a higher

return that's what investors will want. they'll say, listen 4% is not good enough. the big investor some days ago stepped out and said, they have to be bolder in restructuring. what is key here to go forward to restructure the bank and be bolder in cost cutting clearly, the current strategy doesn't seem to work too well. back to you. >> a specific moment around covid. let's look at shipping as marerk expects volumes to fall by 25% across all businesses and flag that outlook remains uncertain the first quarter earnings and revenue helped offset decline.

speaking to the show earlier, the ceo outlined the risk of the basis. >> it is a key risk that is getting bigger as part of this pandemic as countries are trying to protect their businesses. there is no doubt in my mind that it is the wrong strategy. the protectionism will lead to less welfare, jobs and less growth in the economy. it is not just the china/u.s. issue. there are plenty of other kaess around the world as an industry of container carriers, we have learned to adopt and live with no growth. to the travel industry, tui

one stock hard hit falling down 70%. the company plans to make major cost cuts to survive the crisis. the german group could cut as many as 8,000 jobs as it plans to reduce its overhead costs and making a note on the travel season saying they will continue with activities and holiday travels. stock down slightly at the start, now reversing by 1.8% looking to plan a trip with some of the kwauquarantine measures n place and uncertain what they'll find in a summer destination to l'oreal, stocks down 1.5% has decided not to increase its dividend the french group was planning to raise pay outs by 10.4% but is

now planning to stick to the same amount as it paid outlast year, which is 3.85 euros per share. shares dipped by almost 5% due to store closures and shutdowns in europe. the company will be canceling all share buy back programs for the rest of the year aston martin swing to the first quarter loss of almost 120 million pounds leading to a sharp decline in sales the carmaker scrapped its full year outlook finalizing the $5 million outlook for the year can you see the extend with the concern for investors.

10% now down alameda county has struck a deal with tesla to allow the automaker to open next week. coming under fire for not easing lockdown restrictions. president trump applied tweeting that a relaxation of measures could be done fast and safety. the $1,000 fine on musk that he had breached some of those orders into coming up, licensing deals in the race for vaccines we have more coming up after the break.

welcome to "street signs." these are your headlines a record contraction in uk gdp falls 5.8% in march. the data is better than expected helping british home builders trade higher europe stocks follow wall street

lower as the coronavirus top expert warns of dire consequences if the u.s. economy opens too soon >> there is a real risk you will trigger an outbreak you may not be able to control, which will set you back >> financials also under pressure as dutch group and commerzbank swing to a loss. former bundesbank board member tells cnbc what they have learned from the previous crisis >> caller: they do have good capital buffers. they have used the time to build up those capital buffers in a crisis like this, this is what you need. no visibility on the high seas shipping group maersk warns volumes will fall as much as 25% in the second quarter. telling cnbc how the virus will

hit global trade >> protectionism is a key risk and a risk that is getting bigger as part of this pandemic as countries are trying to protect their businesses there is no doubt in my mind it is the wrong strategy. >> thanks for joining us let me take you to the action. it has been a weak start we are witnessing some of these losses the german market was down 2%. limiting the selling we saw at the start of the session the uk and the italian stock market had a better session yesterday in the green still trading negative still eyeing those comments from

dr. fauci warning not just about the health consequences but the he c economic consequences going right to the epicenter of the problem in wuhan investors trading implications as well. the concerns again as we got to the trade war as we got pressure for answers around the coronavirus and if not enacting tariffs and penalties. euro trades at 1.0840 and 106.97 mark on dollar weakness. apparent on the pound as investors weighed the cost of the furl owe schemes 1.2273, we are literally off those 1.30 highs

and .9701 in the mix and u.s. futures, after a rough session yesterday the dow and s&p trading in the red so slightly at this stage corporate bonds are getting a bouft as they kicked off the etf purchase program making it easier for struggling companies to raise funds junk bond issuance is running at nearly 50% pace but come to a stand still in europe. joining us now head of global debt, do you want to talk us through the changes from the u.s. federal reserve what impact do you think it will have to take on debt in the states >> good morning and thank you

for having me. when you look at the peak of volatility in march, we have been both in the high grade and high yield market with the record setting pace in the u.s., we've had almost $875 issuance we will expect to be at $100 trillion that will be in line by all of 2019 and flirting with the record as the year progresses. a look at europe, that is up 40%. we had a report month in april we are at 40 billion already in the first four days of may we are on track for potentially another record month here. when you look at the high yield market it is a robust picture in the u.s. it has been 130 of issuance.

notably 50% of activity has been a third. europe has had less than that issue ens it is definitely a mindset first and liquidity second in europe, it is more the banks first then i'll think about the capital markets. >> we have a lot of companies that want the cash and others that don't necessarily need more debt but are tabing on more just in case do they pay down the debt early or use it for different purposes

>> we don't know the depth of this economic recession. the mindset has been the three ls of liquidity, liquidity, liquidity. if they have to go back and payoff debt early, that is the chief concern given the storm we are in it may be an opportunity of growth right now, it is all about conserving cash if possible and a safe occurrence right now. >> what is often seen as a can arie in a coal mine. increasing willingness to price in risk. you've had issue ens from that sector as well you are saying the overall market has become more friendly. i'm not sure why energy is

managing to shift its paper at friendly levels given the turmoil we are seeing in wti and brent. >> when we look at the shift back, when we started, it was all about sleep at night credit and more broadly impacted by covid. we've had more travel, entertainment and auto the market has shown willingness to price risk. it was dramatically hit. yes, you have the ability to access the market and it was paid up at a premium energy names have capped out much issuers are having the access but there is a biforcation

is this part of covid as well as do they have liquidity to do that those have access but do they have the premium >> is this the risk april tide warren buffett said you can't buy a home worth $130 billion of cash as well is there a leg down for the economy and the stock market and corporate credit being priced in at the moment? >> it is certainly a possible you look at the technically driven rally we go back to the fed with the etf program. that was already priced in a catalyst for a new rally now

sooner than later for a vaccine or getting back to normal. is there a new risk with the set back and loosening restrictions and in the market. right now, they've been looking at it optimistically and underlying in the secondary markets where you are seeing th buy fer indication >> let me jump in, i want to ask you quickly. we are setting up for an important session today with jay powell getting to speak and whether the u.s. will go negative on rates.

>> i don't know if it will change the picture a whole lot there has been a move to get markets up off the market has turned that to work while it will be additional stimulus, i'm not sure it will change the picture it will have some downward pressure on the spread and yield in the corporate credit market but i don't know that we see a dramatic difference. >> kevin, thank you for that we've got comments crossing from the european commission in a report due out later today the european commission has set out guidelines to allow for resumption of tourism that may allow people to stay in hotel

$and go to beaches all of this in coming months despite the coronavirus pandemic and lack of vaccine at this point. documents have been seen by reuters. they want the eu government to take into consider personal considerations to allow people to visit family and loved ones who live in different countries of europe. those restrictions on nonessential travel will be extended by 30 days to june 15 no doubt, measures we are talking about returning to beaches and life we used to enjoy will be after that in lock step with tui today. perhaps they've been in conversation with the government they still have hope around summer this document could be key for the travel industry later on today as we continue to watch how these stocks trade and of course one of the weaker sectors here today

gilead has licensed its drug remdesivir across 127 countries outside of the u.s the american biopharmaceutical company is offering the license royalty free until the w.h.o. deems the pandemic is over or when an alternative treatment is found. let's get out to julianna for more what is the latest >> that is right, karen. this piece of news is around the treatment for covid-19 this licensing agreement gilead has signed is to ease concern about access to the drug one of the key hurdles around finding the treatment is discovering the treatment itself but second is around supplying that treatment and making sure it gets to those who need it they signed an agreement with manufacturers in india and pakistan to ensure countries around the world will have

access to remdesivir it is unclear the extent remdesivir will become the new standard of care there are still a lot of other treatments being trialed we are still awaiting more robust trial results from a vaccine front, we heard from several voices including the moderna ceo who is leading one of the furthest along trials of the moderna vaccine he commented on the outlook suggesting that we are going to need several vaccines to solve this problem, not just one >> i really hope all the programs get to the finish line. we know the odds of every program works are low. we really hope for three, four or five vaccines no manufacturer can make enough doses for the planet

so what is going to happen, i believe, we are starting to have discussions with, for example the u.s. government which is how do we provide access and priorities we believe this is not a company this year. >> interesting to hear from the moderna ceo, reiterating that we are going to need more than one vaccine and supply will be the next key hurdle beyond discovering which will be effective. also asking the ceo of moderna about these human challenge trials we discussed on monday. this is where volunteer participants are given the vaccines and then deliberately infected with the virus to accelerate the trial this is highly controversial from an ethical perspective. the ceo is involved around this and discussing it internally

saying while this is a possibility, they may be able to get to where they need faster because of what they are doing and all of the preparations that need to be made and proceed with human challenge trials certainly interesting comments there. the key message is that we may need severalvaccines, not just one. so let's keep an eye on all of the different candidate vaccines out there. >> thank you for the update. jerome powell to discuss rates later today. we'll discuss after the break.

u.s. house democrats have unveiled a new relaugh package including funding for food assistance and another round of direct payments to individuals lawmakers are expected to vote on the bill on friday speaking to the u.s. colleagues house speaker saying she remains optimistic despite republican

senators making it clear they will reject the legislation. >> this is a negotiation we think this is necessary to meet the needs of the american people all of these provisions have a former probill that passed in a bipartisan way all are supported by democrats and republicans across the country. >> the u.s. deficit hit $738 billion amid the fallout from the pandemic a slump contributed to the deficit as tax payments were delayed from april to july 15. around $3 trillion in emergency funding has been approved by lawmakers so far >> the u.s. core consumer price index faced its biggest fall as travel and apparel spending ee vaf rated amid lockdowns the most since 2008 due to the

more than 20% plunge in gas prices president trump has again made the case for negative rates on twitter saying that the u.s. should, quote, accept the gift other countries are already receiving. the fed chair is said to dampen expectations later today discussing negative rates for the first time with futures predicted thae will fall below zero by 2021 cleveland president will speak to colleagues at 20:30 cet. the trump administration has ordered the government main retirement fund to stop investing in chinese companies the white house intervention comes as the thrift savings plan prepares to prepare benchmark investors to the index that

includes chinese components. in a letter, hard liners including labor secretary and economic advisor said the move would pose a risk and potentially even break u.s. sanctions. senior u.s. republican senator lindsey graham has called on sanctions on china if it does not offer full transparency on how the pandemic started saying trade tensions between u.s. and china have hit global demand adding that the company has learned to live with the slow down >> we have seen in the last two and a half years very low growth we have at least 18 months of trade tensions between the u.s. and china and that has led to quite low growth in global container shipping demand. on the other hand, we have

continued to improve our earnings quarter by quarter by using the tools we have to keep utilization high and keep the network sized for the demand and the cost as low as possible. >> rebecca harding joins us, ceo. let me ask you about the ratchet of tensions again coming into covid-19 feeling we had a tighter seas between two countries. now around the tariffs and u.s. trying to shore up technology around ships, what do you make >> i think it is fair to say that covid-19 hasn't lessened the tensions at all. we are seeing an up titick of rhetoric

we are seeing inspectors coming back from china now. it will continue to impact trade and the investment side of things as well while there is all of this uncertainty there and the risk of the technology world and financial world splitting along the lines, that will make investors very nervous >> listening to the democrats and how they intend to approach the issue of china and joe biden rolling out the hard lines as well what do you make of the democrats approaching because i thought many would be more market friendly and that some of these might disappear. >> i think there is never going to be a new normal over the last few years, trade has increasingly become a strategic tool and game going on

between the u.s. and china it is really interesting here because china has raised its ugly head in election campaigns in america for a long time this isn't something that is new. we've had currency wars and manipulation and rhetoric around the white house. i think it is a mistake to think that the democrats are entirely dovish about all of this in the last election campaign, hillary clinton had to say she was anxious about chinese trade policy because that was the agenda that the republicans, specifically donald trump was setting. what we have here is election business as usual but because it is set against the general trade tensions out there and this covid-19 aspect, we are beginning to see that become quite ugly

>> rebecca, you've written a piece on uk recovery what is all of this about it not being sustainable and that it must reaffirm commitment all about multilateralism. >> brexit and multilateralism are two things that aren't necessarily used in the same sense here this is something that the government would acknowledge what is important here is that we need to remember that uk is in this with the rest of the world. what is happening at the moment is extraordinary what has actually happened with trade is a 25% drop in exports since december december was artificially high we are looking at something now that is significantly low because of covid we are not in a good place but the rest of the world is in this situation as well. we've seen a reduction in pork calls and sailings

everybody is in this situation what is important is that we understand exactly how that is playing in terms of trade policy >> rebecca, i've just become the man replaced dominic cummings with you, what would you tell boris johnson to do? >> i'd want to have a very clear strategy about what being british means. how we want to play with the americans, chinese and europeans. there has been a shift of influence as we've been talking about. russia is part of that mix as well europe is trying to compete against these. we are a very small economy. we count in very small comparison to those trade blocks our 2.5% of world trade is relatively small size matters we need to think about that when choosing our partners.

>> rebecca, thank you for joining us today steve on the line with us too. a quick look at how things are shaping up jay powell is key for the markets saying that rates may be a denial for the u.s futures are pulling back before suggesting a little red this morning. with he saw falls before the tech heavy index is down before the winning streak expect a little volatility before trade this morning. that is all for today's show i'm karen tso. thanks for watching. "worldwide exchange" is up next. these days staying connected is more important than ever.

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it is 5:00 at cnbc and here is your "top five at 5. discussing the human cost of reopening and others saying the economic cost of staying close is too high. >> and revealing another $3 trillion stimulus plan nancy pelosi speaking about the proposal shut down through the fall drastic measures being taken at the nation's largest