[mus piclaying] craig melvin: that's all for this edition of dateline. i'm craig melvin. thank you for watching. [music playing] good morning welcome to "street signs." i'm julianna tatelbaum these are your headlines a resumption of business activity germany and france recover from the slump in april and hovering above 30 in may. shares in lufthansa liftoff confirming talks with the government to secure a 9 billion

euro bailout investors price in the prospect of negative interest rat rates after opening the door to the policy >> of course we are keeping it to where the access would be >> a very warm welcome to "street signs. we've got some fresh data coming through. this is flash pmi's as a whoeld. the flash manufacturing pmi for may has come in at 39.5 up from 33.4 in april in terms of the composite number for the eurozone, that has come in at 30.5 up from 30.6 in april

the services pmi which has been the hardest hit sector as a result of the lockdowns. that has come in at 28.7 up from 12 in april, we already had france and germany come through and we have the overall eurozone number. one other thing, one of the key kpoen nants here, the new business pmi has come in at 28.4 in april an uptick there. contraction did ease in may but still very sharp we have the euro trading slightly weaker versus the dollar this morning. let's bring in our first guest chris williamson geoff and steve also with us chris, thank you for joining us this morning based on these pmis that have

just come through, do you think investors should be breathing a sigh of relief >> caller: good morning. in some respects, yes. we all were hoping april was going to be the bottom here. every single country has eased covid restrictions to some extent if these numbers hadn't improved in that environment, it would have been a disaster these are playing out kind of as expected which is reassuring however, we have to bear in mind how these work we are still way below that. the eurozone number at 30.5 at the height of the financial crisis, we only felt it at 36. that was february 2009 we are still better than

anything we saw during the financial crisis in terms of month-to-month deterioration it is easing but as you say, it is still very severe >> chris, i think we are all looking to the second half of the year or 2021 one can extrapolate by july, august or september. i'm expecting june to be bloom as well. do you have anything that says this is far better than expected and a return to some form of expansion at this stage? >> if we look at these gauges we are compiling of how covid-19 restrictions are being eased, you can plot the data against those and see how we've turned in line with the turning point in those restrictions and given the government road map for

further opening up it does apply we'll see these further lifted in the second half of the year, early in the second half and third quarter. current trajectories are that you'll see some recovery starting in the second half of the year however, even on current guidance, some of these will stay for a long time a lot of these hit about 80% in terms of tightness of restrictions in april. even by the end of the year, they are still up by 20% a quarter of the restrictions will be in place and the number of people out in airplanes and bars and restaurants that will keep a lid on the recovery trajectory. yes, we'll fear recovery and it is going to be weak. we fear now it is not going to be until 2024 until the eurozone

regains the price before the pandemic >> obviously the pmi numbers guide the decisions managers make about their own businesses. looking at these numbers still being in contraction territory, does that tell us while the pmi series may have bottomed, there will be no desire to take on new staff or continue furloughing or laying off >> caller: great point exactly you may well see the output bottom out as it were. but the key ones to watch are the order book indices and the extent demand is reviving or not and that will guide employment decisions at firms the big

question is what will happen when this expires. how strong is the environment out there and what sort of capacity is needed in the environment. >> in terms of the manufacturing side, what do we know about current inventory levels that will have a baring on the economic activity pick up. >> this is where we expect to see these rebuilt. supply chains out of china are huge there a lot not available to communities that is causing a short term low in production even as they start producing

again. we expect that to provide a boost as we go through the summer then the concern is about the employment levels and if companies are concerned about the economic outlook looking at a w shape and the demand looks like you are back to where you were before >> chris, you are looking back at evidence of what we've done and especially the monetary response as well in your view, has the response that has taken you to negative rates created a demand on the services or the manufacturing

side which caused a distraction which caused people to fear the situation? >> it varies from countries to countries those usually upset by the whole process of negative interest rate. wear they'll invest on the housing side and keeping the mortgage rates is usually beneficial that will keep it on forward guidance it is the business investment where we've seen negative influence there. there will be more to come as they try to keep ammunition where in the storm is not the right time to keep policies in

place while there is such a panic going on trying to see the wood from the trees so when we settle down we know how big the hole is that we are actually in, it will be time to review the policies >> yesterday, the cdc warned around a flairup again in the fall and winter months given what we are seeing in the southern hemisphere with an up tick of cases there. we have seen the short-term lows in april what are the chances we revisit the lows later in the year if we do see this seasonal resurgence actually take place? >> caller: yes they guarantee it is up from here and will be guided by the number of cases. the bmis have followed the

number of cases quite closely in terms of the direction of travel where the policies have either tightened their restrictions or loosened them. if the cases go up and the restrictions go back in, the restrictions will go back down there is no guarantee we are on a growth trajectory now. >> thank you so much, chris. goff and steve, thank you as well to you. let's take a look at european markets and where we stand in attornterms of the trag session. we are coming off a stronger day yesterday with the stoxx 600 gaining about 1% bringing weak gains coming into today's session. now you can see we are looking at red across the board led by the dax down 1.35%

the cac down the ftse mib trading lower as well uk focus after governor's dmomts to opening the door to negative interest rates airlines also in focus let's get a check on the board a look at broader sectors. we are looking at red across the board there. airlines in particular today are in focus the majority of them trading higher easy jet up 2.1%, lufthansa up let me give you the detail ez jet says it will resume flights from june 15 the company will roll out a number of new safety measures including enhanced cleaning of aircraft and mandatory face

masks. flights will be started in uk and france first and more routes will come in the coming weeks. lufthansa shares have taken off after the carrier confirmed it is in talks with the german government over the rescue package meaning the government would take a share let's get out to annette with more there has been so many reports about this rescue deal what are the details >> well we are knowing now that the talks are in an advanced phase and that the german government is looking at taking a 20% stake in lufthansa while the capital increase and german stabilization fund was erected with response to the coronavirus crisis in addition to that, there will

be a 5% potential convertible bond which they could realize in case there is a foreign takeover approach the government would have a blocking ability that is at stake and what happens now is that lufthansa, once the package is finalized needs to agree to that for two days needs to have a board meeting and an extra ordinary share holder meeting, i should say the shareholders need to consent to the plan. the rumor goes that the german government does not want to pay current market prices but substantial discount

the question is what is the alternative? there is no alternative on the horizon apart from the bankruptcy currently, lufthansa is burning an estimated 1 million euro an hour cash. they had a substantial amount of cash on their balance sheet but this is going away will the state have a say in the day-to-day operations. for now, the german government says they will leave lufthansa on their own for at least two years. that is a transitionary period in which the airline industry will have adjusted to a new normal there is a deal which they are now looking at and most likely will get to a deal at a 20% plus

5% convertible for the german carrier. back to you. >> annette, thank you for breaking that down for us. a story we'll watch closely. coming up on "street signs," race towards immunity continues. 400 million doses of a vaccine still under vepmt.deloen we'll be right back. you say that customers make their own rules.

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welcome back to "street signs. astrazeneca has potential for a new vaccine. it aims to supply at least 400 million doses when the first deliveries begin in september. developing together with oxford university and plans to manufacture 1 billion doses in the next two years talking with the government and the w.h.o. to distribute around the world. highlighting that uk will begin receiving supply in september.

sticking with the uk, the bank governor says they have considered lowering interest rates to negative territory for the first time ever. stressed that the boe needed time the comments come after the yield of minus 0.003%. speaking before the uk parliament treasury committee, he said the boe must consider all options including negative rates to stimulate the economy >> we do not rule things out that would be foolish to do. but the mpc has a history really

since the financial crisis, since the very sharp cuts in interest rates of keeping under periodic and lower as they've done that several times with good reason. given what we've had to do in the last few weeks, it is no surprise >> the uk housing market is cautiously opening the doors as part of the government's easing measures analysts warn the sector may be sitting on shaky foundations >> let's bring in ceo of uncle thank you for being with us today. just for our viewers uncle is a build to rent brand

with buildings across london and manchester you should have some good insight about how renters are getting back into the market what are you seeing in terms of perspective interest and how resenters reacting to the pandemic >> thanks for having me. it's fair to say like most industries for sale and rent have been paralyzed. we have in our uncle portfolio nine locations in london and one in manchester. we opened our newest building on friday, which is just under 250 apartments right on the front end of the opening with us opening a new property that's all for rent the technology of virtual viewings and remote viewings,

which is someone standing with devices going around are all helpful but ultimately when someone is making a decision of a place they want to live and call home coming and seeing something with their two eyes and meeting someone there to service them will be critical. i think we are at the front end part of that >> i spent a lot of times looking at things like nine elms, the east end and i suggest there is a dangerously high oversupply of property that will affect the rental yields your industry is in for a rough couple of years, isn't it? >> overall housing supply numbers have lagged. there will be short-term blips out of airbnb in what you are

describing some of the forest landlords in the uncle business we thought of ourselves as a market share as opposed to market growth. 99% resenting from amateur landlords and few are sort of a hotel style where the owner and operator are sort of unified so all of that service is delivered holistically our rates and feedback have all been positive. the short coming has been converting inquiries to people that start to move in. there will be a lag but over the next month or so >> yet all the evidence whether cre or residential is that a lot of the renters will not have the ability to pay you will see those horrendous

figures out of the uk. do you fear your vacancy rates will pick up aggressively from here >> the risk around vacancy will run out. on the other side of that will be rental growth i think rental growth figures will be more challenged. the flip side is the investor demand is starting to shift. when you have negative interest rates for bond as a generally stable nonasset class, there is a flip side of that that the demand starts to shift as well. >> we'll leave it there. thank you very much indeed ryan prince is the ceo of uncle looking at the uk property market talking of the uk, we'll take a

look at uk pmi we've had the eurozone figures a bit of a recovery there. what does it hold for the uk and what does it mean for the pound sterling we'll talk through that after a short break here on "street signs. this is a tempur-pedic mattress. and its mission is to give you truly transformative sleep. so, no more tossing and turning... or trouble falling asleep. because only tempur-pedic uses proprietary tempur® material... that continuously adapts and responds to your body, to relieve pressure... so you get deep, uninterrupted sleep. all night. every night. the tempur-pedic summer of sleep starts now, with all tempur-pedic mattresses on sale, and savings up to $500 on adjustable sets.

welcome back to "street signs. i'm julianna tatelbaum these are your headlines a resumption of business activity pmi recovers from april low. beating expectations but staying firmly in contraction territory. shares in lufthansa liftoff bucking the downward trend after the carrier confirms advanced talks with the government securing a 9 billion euro state bailout. >> investors price in the prospect of negative interest

rates. governor opens the door to sub zero policy. >> of course we're keeping and the access will be china's national people's congress gets under way after months of delays expected to signal the acceptance and growth rate in the wake of the virus outbreak we've already had the eurozone match pmi as now we have the eurozone the flash pmi for uk on manufacturing side has come in at 40.6. stronger than april. these numbers certainly the trend are in line with what

we've seen across the eurozone the up tick, the bounce off the lows but still a very dire signaling a sharp contraction. that composite number has come in at 28.9 versus april at 13.8. that is slightly ahead of forecast the overall message from the eurozone and the uk is that the contraction pace has eased but still the economic situation remains severely impacted by the lockdowns. let's bring in steve on this investors were widely expecting these numbers to bounce off the lows seen in april should we be breathing a sigh of relief here? >> no. not at all this is historical data. all we care about now is if there is going to be a sustained recovery

they should be slightly higher 40.6 is bigger than 36 expected. 26.8 is bigger than the 25 expected you can't just look at one data snap shot. we have retail sales coming which will be awful. we've looked at car sales in the uk manufacturers suffering as much as anyone else the other data coming out of the uk this week as well where a record number of job increases of over 800,000 to 2 million if you looked at these data in a pre covid world, 28 is lower than 50. so looking in the round as well. clearly these numbers are very damaging otherwise, you would not have the likes of andrew bailey

talking about the potential for his mind to be opened. there is a potential for his mind to be open for negative rates. you would not have the bank of government the 15th century building build between 1410 and 1441. the bank of england is a couple of yards down the road here. you would not have them saying i'm open by negative rates if there was anything to be done about these numbers. i'm looking at the pound, it is barely moving on the back of it. back to you. let's get a check on markets and see how equities are reacting red across the board here. looking at the dax leading the way. the red is spread across the board. ftse m ftse mib down. we are seeing the ftse down

about 90 basis points. this comes after a stronger day yesterday with the stoxx 600 gaining 1% it has been a strong week with markets up more than 4%. investors taking a little profit after the strong run we've seen. let's take a look at the european yield this has been a big part of the conversation after the bank of england governor signaled a change when it comes to the messaging of the prospect around the negative interest rates. issuing negative yielding bonds. the 10-year trading about 0.2% at the moment. the german 10-year trading 0.84%. let's look at the futures now. looking at a softer start as well in line with what we are seeing here in europe. all 11 sectors were positive in the session led by energy. health care was key.

clearly a tilt towards reopening stocks in the u.s. strong moves there for the cyclical parts of the market we saw strong demand for the tech stocks. amazon and facebook shares surging 6% yesterday amazon up about 2% both recording record closes tech has been the leader in the recove recovery rally we've seen as investors see what things will look like post pandemic. potentially will lead the way out of the pandemic as well. let's bring in -- let's talk about the next story yandex has been responding beyond being russia's answer to google with on liline shopping e learning the delivery apps have seen user growth of 75% since march.

1.4,000 students were simultaneously using the learning tools our guest recently said the company has an opportunity to, quote, build a new fedex in the space of a few months. he joins us now. thank you for being with us. geoff is also with us this morning. sir, thank you very much for joining. you've shown great agility in this crisis reading about different initiatives. converting taxi drivers to grocery delivery drivers, setting up disinfection points for taxis. what kind of cost is involved in being able to be so ago i'ile ae

there for your customers >> as you can imagine, the volume in trips in ride hailing has come down as a result of the lockdown in russia two months ago. we tried to do everything in our power to find alternative employment or opportunities for these drivers. what we noticed is a massive up tick in demand for these off line retailers we started approaching those including grocery chains, home improvement and toy stores with the proposition of, hey, you can leverage our platform we've built using these drivers to deliver packages for you this has been a tremendous success and volumes have grown look at our grocery business, that has grown 6 x since january. food delivery has doubled year

on year. what allowed that to happen is that we are all working remotely all 10,000 employees are working remotely, we've been able to put out new products in record time. it is testimony to their agility in this environment. >> i want to ask you the news saying they are taking on amazon, ebay launching facebook shops. we'll soon be able to buy some products on their platforms, instagram and facebook how big a threat does facebook possess to the current e commerce leaders >> i think what they are doing makes a lot of sense for a lot of small merchants it is something we've been exploring with the same approach, to utilize the large number of counts we've a couple

lated over the years the payment credentials attached to them. the small to medium sized in the down turn to enable commerce what facebook is doing makes a lot of sense and is a very interesting approach and we are also experimenting with. >> this is geoff good morning to you. obviously advertising is a lower proportion of revenue than it used to be when we stood on the banks to talk to each other. it is part of the revenue stream to these new initiatives we've had to pivot to, do they take a hit to the ad side >> they will offset the hit we are taking it sets up the company to be a much stronger player in the

future i think the initiatives we are doing online education where we launched a service which is focused on educating data scientists, data analysts and web developers whether it is services we are launching around grocery and video, all of this will position the company to be stronger in 2021 and beyond. i look across a number of initiatives, every one of them sets up nicely whether it is massive gains in search or a huge number of subscribers in media and logistics. all of this is setting up well for the long term. a lot are offset for the massive revenue decline we are seeing. this is forcing us to innovate quicker than before. i'm excited about the future >> obviously, the impact of

coronavirus in the short term is going to mean a lot of changes i saw that uber jv has been the uber jvipo has been put on the back burner for the time being can you comment on what the timing might look like to dust that off and come back to market and what other changes you've had to make to medium or longer term planning? >> very good question. i'd say the ipo plans for the joint venture for uber are currently not on the agenda. what we are focused on is obviously ensuring the safety of our passengers and drivers and the sustainability of this business and launching the logistics platform, food delivery, restaurant delivery and so on. we are doing a lot to help drivers manage and make sure

passengers who are taking rides with us are safe >> i want to come back, greg, to your point about small to medium-sized business which are key for the likes of facebook shops. we had a retailer talking about how in the post pandemic world especially in the united states, the small to medium sized players are going to be relatively disadvantaged compared to the big ones we've seen the big ones really thrive here. how much will the small players have to spend and how many will actually survive >> so i actually think entrepreneurship is resilient and small and medium-sized businesses will do well. there will be waves of bankruptcies and creative destruction but i think the people that run them, nothing will change in the lookout in

the world. what we are seeing right now is that in the month of april, our advertising revenues from small to medium sized businesses on line will decline. what we are seeing in may, small and medium sized businesses are outperforming in terms of their advertising spend. i'm very optimistic and i think small to medium sized businesses will do well this is a great time to start a business out there >> interesting data points thank you for bringing us your in sight pushing on, brazil could overtake russia as having the second highest number of coronavirus cases in the world reporting almost 20,000 new

infections in a single day bringing the number to over 290,000. the leader there has been criticized including ignoring social distancing measures and pushing for the economy to reopen as the w.h.o. recorded more than 100,000 new infections over the last 24 hours. the most sing the outbreak began. the italian leader urged residents and starting thousands of tests to assess the level of immunity a contact tracing app will also be rolled out in the next few days the prime minister urged the banking sector to do more in issuing state-backed loans

the u.s. senate has passed a bill that could ban many chinese companies from listing on american stock exchanges certifying if they are not owned or controlled by an american government tweeting that bill could stop the party from, quote, cheating on stock ex changes. shares of alibaba and jd.com fell on the news the first of china's annual two sessions is under way after being postponed from march from the pandemic largely ceremonial people's conference sets the stage for tomorrow's main event, the mpc the official annual growth target is under question this year may be a little different focus. l brands has posted a 37% decrease as it was forced to close outlets due to the virus

reporting a net loss of $296 million and expects to shut down over 250 stores across another america this year. representing the third straight quarterly loss and drop in sales for the retailer a deal to sell victoria's secret to private group was canceled this month due to the pandemic u.s. home improvement retailer lowes reported its biggest rise in at least 15 years as americans turn to diy projects amid the lockdown. but warns that the numbers will mod rate the ceo said the digital transformation helped the company perform well during the pandemic >> there is no way we could have the sustained levels on line if we couldn't make that migration to cloud you'll see the one-click check

out, search and navigation, the ability to schedule and do all types of visibility and order destination online we'll modify curb side delivery. target's earnings beat expectations as the e commerce business grew by 141%. huge numbers the retailer also benefitted in investments in same-day delivery services and posted a 64.3% fall in profit as operating costs rose 11% warning that higher expenses like worker pay would eat into profits this quarter sending shares lower you can follow us on twitter @street signs. you can tweet me directly @cnbc juliana. i'd love to hear from you.

coming up, fed officials hint at forward guidance hinting at keeping the rates near zero we'll have more after the break. there are times when our need to connect really matters. 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. we've always believed in the power of working together. that's why, when every connection counts... you can count on us.

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. welcome back to "street signs. fiat chrysler chairman says a merger with psa group remains on track. adding that reasons for the tie upa up are stronger than ever. looking at a 5.5 billion special dividend to pay into the deal. a criticizing fiat ford plans to reopening u.s. manufacturing plans have suffered a set back. the carmaker was forced to close two facilities in dearborn,

michigan after a tester tested positive and another site due to shortage in parts. a spokesperson said exposure was from outside of the flex more than 2.4 americans are expected to have filed for unemployment even as lockdown has eased. that is compared to 3 million the week before. the figures will be released before u.s. markets open president trump is due to hit the road today visiting one of the plants ford repurposed to manufacture ventilators. we'll go to tracie potts live in washington, d.c. good morning >> good morning. this visit to michigan by the

president today has become a bit of a political issue in advance of his visit, he called out the state for mail-in voting allowing people to stay at home and safely vote by mail. president trump saying that is fraught for potential fraud and he is threatening to withhold funding in michigan and nevada in michigan, they are also dealing with historical flooding so the president backed off on withholding funds. he is headed to a ford plant now making verntz for hospitals and facilities treating people with covid-19 whether or not the president will wear a mask at that plant today is still up in the air he has not so far. the attorney general of the state insists that it is the

president's legal responsibility and wrote an open letter saying so so far, it is up to the white house and we haven't seen the president do so. we are watching here over congress dead locked over more money to deal with the coronavirus. there may be some compromise on a small business program to make it easier for those loans to small businesses to be forgiven. those loans are used to help pay payroll and keep people working. >> a lot of focus on helping out main street versus wall street after the criticism washington has faced. thank you for bringing us the latest from washington, d.c. with nbc news. fed officials are considering ways to give further clarity including date-based forward guidance and a pledge to keep interest rates near zero. that is from the april meeting

warning that the pandemic may lead to lasting damage on the u.s. economy the outbreak presented a considerable risk adding that labor market may suffer in the long term. our u.s. colleagues will speak to boston fed president catch that tonight at 20:00 cet. they will also speak to atlanta federal president at 21:30 cet >> looking at the minutes from yesterday revealed a few members of the federal reserve discussed capping rates at specified levels and is effectively yield curve control. we are looking at the yield curve trading at 0.1 a little lower on the session. also the 20 year and 30 year are trading lower. let's move on and look at stocks what we are in for as a look at

wall street. we have seen indices move higher marking the fourth positive one. all 11 s&p sectors were positive lead to the upside by energy which gained nearly 4% health care was the lagarde. we saw a lot of demand for reopening stock. companies like mgm resorts, united airlines. investors p investors put risk on the table. that comes alongside a warning from the cdc yesterday that coronavirus could have a seasonal bias and we could see an up tick in colder months ahead. that's it for us i'm julianna tatelbaum orwi ehae"s ming up next. i got an oriole here.

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it is 5:00 at cnbc and here is your "top five at 5:00. the number of global cases hits a sad milestone. president trump attacks china over a massive misinformation over the virus. and the future of the office getting back to work in orlando. what theme parks are planning to do that is turning heads on wall street