that's all for this edition of dateline. i'm natalie morales. thank you for watching. ready. ready. good morning, everybody. welcome to "street signs." i'm julianna tatelbaum these are your headlines banks lead european stocks higher after the rally breaks above 10,000 for the first time. big bank bosses on both sides of the atlantic voice optimism. the ceo ofcredit suisse says things are moving in the right direction. saying the worst has past.

>> caller: there are many many millions who are not coming back and some small businesses that are struggling >> an advantage. airbus flies after boeing sees deliveries drop to the lowest level in six years from from the iata director later in the show. and swinging to the first ever quarterly losses as the lockdowns hit sales. but stores will reopen in most markets in june as it bisdishest a bonus dividend a warm welcome to "street signs. let's kick off with the fresh

outlook from the oecd coming out now seeing negative growth of negative 6% and negative if a second corona outbreak occurs. the euro area gdp is forecast at negative 9.1% in 2020 negative 9.5% if a second outbreak occurs and the uk negative 11.5 and negative 14% next year if another outbreak occurs. they have presented two scenarios. one where the virus continues to recede and one where a rapid

contagious continues through 2020 and looking at what would happen let me run you through these for 2020 global gdp seen down negative.6%. uk down 11.95% i think we have some sound now at this oecd press conference. >> that is the scenario no second wave happens. in the event it would, this kind of double hit. the fall in global gdp would be over 7.5 percent and looking at perhaps 40 million more unemployed critical sector for our economy since our societies have been hard hit

tourism, air travel to name but a few. >> in addition, global trade volumes which were already stagnated. before the crisis, we were in wonderful times with the slow down and growth. then the covid hit trade was already stagnating before the out break we expect now to 9 to 11 to 12% throughout 2020. i was stressed that presenting the problem as a choice between lives and livelihoods meaning a choice between health in the economy is a dilemma

if the virus is brought under control, there will be no robust economy. our government deserves credit for our decisive actions in a few commendable cases that meant testing, tracking, tracing from the very outset most countries were compelled to result to lockdowns of varying degrees. this meant health workers were left to handle the waves of infected people. and i have to say here we owe them a huge debt of gratitude for their tireless and selfless efforts. we would like to render homage to them. as a result, the infection rate has fallen sharply in most oecd

countries and in many others that followed these trends in fact, containment measures are now being eased. the need for skillful policy action is now equally important as it was during the first phase of the crisis. policymakers move decisively to cushion the blow to the economy while it was placed in what we could call an induced coma but they now face the daunting challenge of quickly and completely reviving the patient. the policies put in place now will shape our economies for decades. i would like to emphasize three points that seem relevant

first, policies need to mitigate the inequalities being worsened by the crisis. we know many of the worst off and most vulnerable people are being hit hardest by the pandemic the young women, those in precarious or informal jobs, those without savings, those with limited digital connect tiffity. some 1.2 million children still affected by school closures and many who have no access to online learning. one imperative toward limiting inequality is getting

unemployment stuck at levels that would set back a whole generation of young people and undermine their long-term potential. the second thought is that it is essential that governments foster more resilient, inclusive and sustainable growth the aim should not be to go back to quote/unquote normal. actually normal was what got us where we are now so to take one example, air pollution was killing more than 4 million a year worldwide before we discovered that it aggravates the consequences of covid-19 reductions of air pollution will make vulnerable sections of the

population more resilient to health risks the climate emergency has not gone away. it continues to be our most important intergenerational responsibility responding to this crisis and tackling climate change does not have to be a choice. it does not have to be either or there are things governments can do to address both challenges at once for example, they can make sector specific support measures conditional on financial improvements and suggesting the recovery -- >> there is the oecd general speaking one notable line that stuck out, the need for more skillful policy now as strong as it was

in the first phase of the pandemic really pushing for continued policy support and global as places around the world try to come back from the pandemic and where they have been exacerbated. we are going to be seeking to oecd chief economist be sure to tune into that and their advice of how to tackle the affects of the pandemic. bringing in the head of black rock to weigh in on this steve will be with us also thank you for being with us this morning. what do you think of the policies we've put in place thus far? we've seen a huge proposal many had been hoping for, more fiscal drive from the european leaders.

we've had in the u.s., congress and the federal reserve pushing through the report what is your take thus far >> caller: good morning. i would make a couple of quick points the first is the speed we've been seeing deployed over a course of a few weeks is truly unprecedented. nothing short of a policy revolution seeing that response .2 would be that europe has been lagging in terms of the response -- we are seeing the response start to take real shape. with france later today and the ecb that is ramping up that is amounting now to a very significant response that is the second point the third point you eluded to

will be -- it is one thing to have deployed -- >> i'm afraid your line is a bit shaky. we'll try once more and hopefully we've got you now. i'm curious what your outlook is is this a risk investors should be taking seriously at this stage? >> caller: in the near term, there is going to be a risk and we are going to see low inflation for the next quarter and maybe year but this policy revolution put in place is raising much bigger question over the next two, three, four, five years that has shifted to the upside

and it will depend whether we put guard rails around this put in place the risk is to the upside. we'll have a clear deficit and will be careful not to raise the stimulus quickly that is a combination or receipt for more of what we see. not now but i do see a risk of inflation. what does this mean for portfolio allocation what are you doing now >> right now, on the near term view, it is mostly like tracking the evolution of the virus and leads to us being strong on the credit the credit space overall that would take a near term. from a more strategic perspective, we are seeing less around the role with central

banks pushing rates and keeping rates really low yielding the control in many places will take government bonds useful we are reviewing the role of government bonds and portfolio and building up in inflation and securities is another thing to do and considerate this time the last thing i would say is that what we are going through is various big structural shock. it is requiring a bigger rethink of the portfolio and think about how we think about resilience and the whole of government bond and inflation is a big question. that will be a change that will lead to a change around digitalization and supply chain at an essential level. >> thank you for joining us.

head of black rock investment. china's rate fell off the fastest as they were forced to lower prices the ppi declined 3.7 in may which was worse than forecast. consumer prices rose 2.4% but missed market expectations you can follow us on twittetwitter twitter @street signs cnbc coming up on the show, fiat and under pressure to make plans om eu regulators 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.

welcome back let's get a check on european markets. all trading higher in every sector in the green.

we have 90 basis points on the cac 40 and the ftse mib. ftse 100 just around.7% higher yesterday, we saw the stocks fall back. yesterday, down just over 2% the real trade that came through was the unwind and catch up trade over a couple of weeks defensive parts of the rally that have come on more strongly as to the value parts. now this morning, investors coming to work across sectors. i want to take a look at one sector in more detail. that is banks. we are seeing strong gains across the board

a goldman sach conference taking place this morning has brought in some comments credit suisse saying capital markets have picked up that is providing a nice boost we've heard from deutsche bank ceo and reports from reuters suggesting that ecb is easing the burden on firms and households throughout the pandemic thus far. we are seeing a strong bid in financial services that is names like the exchanges and on the back of those comments suggest a pick up of the capital market that is volume for the exchanges and other financial services firm that is a look at the banking sector in the right direction, that is

credit suisse's message. he described business conditions telling a goldman conference feeling quite optimistic saying after a volatile march, the system has been robust in may and june he's not the only one speaking optimistically about the sector. also believing the worst could be behind us that is according to an address at a u.s. conference but told colleagues that they should not take a false sense of confidence from the rally >> caller: the bounce back and magnitude has been a surprise to me we are still in a struggling some people are equating opening up to the economy being great. that is not the case for some time there are certain segments and industry that will struggle for some time.

i'm surprised by the equity frankly. they are very tech centered which is driving a lot of the activity >> making further cost cuts to produce the share. coming after the company posted a quarterly loss the stream lining would come on the back of a review of the capital market activity. this comes as cancellation hit europe by dividends and business market business. this comes a day after they would not quit the equity product franchise. >> shifting from banking space to luxury. still clearing regulatory hurdles ahead of the deal with lvmh the french luxury giant has lowered the price. after the u.s. company closed almost 2% higher after the

luxury jeweller said it is seeing a rebound in china. trading about 1.9% and hvmh about 1.4% higher. inditex has reported a loss. first time they saw profits fall in negative territory. seeing sales plunge nearly 50% but saw online volumes surge forecasted web transactions would make up more than a quarter sales by 2022. also earning a dividend and revealed inside sales in south korea had normalized >> joining us just outside with steve. what do you make of the results and what is the read across to the broader retail space >> we are looking backwards. same with the employment report.

slightly better. we all knew it would be a loss as well. the biggest share holder who owns 59% of the company has decided some form of dividend will be welcome. that will be welcome to the sixth richest man on the planet. they are looking backwards this is a huge effort to get back on track and to get a lot out of the stores and back into the warehouses so they can be sold from online distribution. the beauty of the model is that their warehousing is done in the store so you don't have large amounts of stock just sitting there. they can get it to the customers early as well. they reverse engineered this going forward, the blend of the surging on line and what they'll be doing with bricks and mortar.

moving on to the broader sector. i'll show you a shot of 61 which is the flagship of shopping at zhara. what is interesting is the fact that i saw a dozen workers at the doors this morning i had a quick word i said, you are not opening early? they said, no. we are getting the store ready for monday on monday, nonessential stores in the uk will be allowed to open zoos and safari parks. no comparison, no. from monday as the government continues to ease the lockdown restriction. the point here is that there is a lot of pressure on these retailers despite the enormous challenge regarding the point of service and payment an social

distancing that will happen there. very tough i'll give you three statistics nonessential retailers are losing 1.8 billion a week in retails. two, in may, they saw consumer spending down. compared to 36% in april third is uk retail sales in april down 19.1% down 9% in may. will be tough to hit the ground running on monday. >> one of the things that stuck out to me around how the shopping experience will change. they think a better shopping experience means larger and more attractive stores in key locations. it is interesting that people do still want to shop including young shoppers they still want to go to brick

and mortar what is your take in >> if you are buying a pay of kurt guyger shoes. apparently according to bbc report, if you pick up said shoes and put them on your feet, they have to be put away to some quarantine for 24 hours. if like you, you try on 10 pairs of shoes does that mean 10 pairs of shoes will have to be put aside as well it will be almost impossible to manage your stock room until something changes about quarantine or social distancing and rules about what you touch certain products if you go shopping, you want to touch. like the book store in the same report i love buying books and feeling books. i tried a kindle i didn't like it but if i were

to pick up a book, 72 hours that book has to sit on the selfhelf how do you shop? bricks and mortar has enormous challenges up the road from the biggest department stores in the united kingdom is massive department stores and harrod's. how do you manage foot fall. whether 100, 200, 300, 500 people in the store? it is going to be an absolute mine field >> that's a lot of stickers on the floor. let's push on and talk about continental. they will have to layoff workers due to a slump in demand

the auto supplier had no other choice adding the company cannot give any job assurances. fiat chrysler and psa are to give concessions about a coming merger the worst year in history for airlines more on the forecast for the airline industry when we speak to the iata director general that's coming up next.

welcome back to "street signs. i'm julianna tatelbaum these are your headlines financials lead stocks after the nasdaq breaks above 10,000 for the first time big bank bosses on both sides of the atlantic voice optimism. ceo of credit suisse move in the right direction as morgan stanley says the worst has

passed >> there is one thing to say we've had a couple million people come back on the payroll after being furloughed many, many millions have not and many small businesses are struggling >> the oecd warns the world is on an economic tight rope. second general praises quick government action. >> policymakers move decisively to cushion the blow to the economy while it was placed in what we could call an induced coma the worst year in the history of aviation warning the industry will loose almost $85 billion a year. we'll speak to the inspector general in a couple ofminutes.

let's get a check on airlines ryanair down 1.3%. easy jet down. lufthansa down and klm a bit of selling pressure on airlines space as iata has issued a forecast. a dier look at the worst year in the history of aviation. that's what they are talling 2020 in the aerospace, boeing delivered the lowest number of planes in may and logged 18

cancellations for the month. mostly for the 737 max and only recording nine orders. boeing was already under pressure needing to ground the 737 max after two fatal crashes. >> 2020 will go down as the worst year in the history of aviation that's the stark warning as it forecasted airlines would lose $84 billion this year. also warning of continued fragility when the red ink could surpass $100 billion airlines had to secure bail out

what stuck out to me in recent weeks is how quickly people are eager to return to the airways ryanair saying bookings has already surged is it fair to say air traffic and air travel has prove ton be more resilient than expected? the recovery was slow bookings

were higher. there was a strong appetite again. that is good news for us >> we have talked about this many times the flag carrier sector replaces it with a public set of criteria in my eyes thwart the business model as well. if 50ueurope could move away fr having a flag carrier. i appreciate the special set of circumstances. the level or losses i believe are exacerbated because we are desperate to have individual flag carriers for every country. >> i wouldn't say that exactly it was depending more on the

crisis in america where airlines were more financially resittent, resilient and strong they were more profitable. in europe, it was below that better than asia in middle east we have seen legacy carriers being resilient and strong sometimes stronger there is no rule as to the better business model due to the precrisis. we know the future of full service carrier also on the bail

output together by the local government but true as well in asia >> i am hoping my family holiday will happen this summer. the prime minister seems to think some form of splendid isolation in this pandemic is the way forward. do you have any knowledge that saysly get my holiday in europe this summer? >> i think european countries will lift travel restrictions and open borders through the area for the uk, i strongly hope that they will follow the same movement so they will release the

description to stop with the quarantine measures. the things we have put together for the control it is useless to implement quarantine we urge all governments, particularly the uk one to stop putting passengers to quarantine permitted they are following the right processes. >> you represent about 290 airlines what are you hearing in conversation with your members in terms of returning service to normal >> we have seen two phases four weeks ago, you know, the sector was in a complete disaster with very pessimistic outlook and very pessimistic vision of the future now one

week or two weeks as they've come back with bookings. we've seen particularly european airline and u.s. airline following asia planning to restore capacity and put more capacity than expected optimism is coming back. i can tell you should wait for the fourth quarter >> i want to ask you on the aerospace part of this eco system and the many many fliers that keep this sector to float what do you think of their

ability to cope at this stage? >> the financial health of the part of the industry was pretty good before the crisis they have been severely hit as their customers. we the airlines were dramatically hit there was a difficult period in the coming year or18 months. i am a supplier business structure to provide the right equipment and planes, so we strongly support the plans that have been announced on both sides of the atlantic to help on

both sides of the aerospace industry >> i appreciate the color you have provided. we are going to squeeze in a quick break now. coming up, the fed is set to release economic forecast for the first time in six months investors are key to see the usange since the coronavir outbreak more after the break

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u.s. senate republicans are considering a new police reform bill in response to a convenient killing of an unarmed black man that sparked protest responding to officer training and the use of excessive force lawmakers say they plan to formally introduce the bill this week president trump has sparked fresh controversy around the protest. tweeting that an elderly demonstrator in buffalo may have been part of a set up. new york governor cuomo hit back saying it was irresponsible. >> if there was ever a

reprehensible, dumb comment and from the president of the united states at this moment of anguish and anger, what does he do pours gasoline on the fire if there was ever? if he ever feels a moment of decency, he should apologize for that tweet in addition to various responses from politicians, we are hearing from a number of companies. general motors marry barra has put it on herself to ensure the carmaker puts a greater emphasis of diversity coming after she sent a letter to gm staff saying she is quote impatient and disgusted at the deaths of black americans at the hands of authorities and plans to create an advisory board to

help achieve its goals adidas says 30% of all new positions will be filled by black and latino people in the united states vesting some $20 million to african-american communities. after hundreds of black employees protested in front of the german sports wear giant u.s. headquarters kwiel accusing them of profitingoff black culture. seeking to improve and creating more diversity a big day as investors at the federal reserve will be meeting. fed chair pouille will speak maintaining interest rates near zero and continuing with the quantitative easing program. looking to forward guaidance as

they are expecting to look at forward forecast for the next six months looking at u.s. treasuries we are looking at the 10-year note currently around 0.8% 0-year around 1.5% two-year around 1.2% let's bring in macro strategist at wells fargo to help set the scene for today's meeting. last time the federal reserve was all about the pandemic foregoing any kind of forecast is there any way this could return to the policy setting goals. we think the return of forward guidance will be a forward part of release we'll be keeping a close eye on the dot plot where policymakers are headed over a couple of

years. in particular, if you see a move much lower, that will be a strong form of forward guidance indicating how long the fed expects to remain low. you think that's going to be for a long time and we think the market will be focused on what those tell us and what are the projections for brother and inflations show. >> the focal point was last week's jobs report which was really remarkable. there was concern around miss classification around some employees. perhaps the number was not as strong as it looked. what do you think the fed is likely to think about the employment situation movin forward? i guess the big question is when we see unemployment drop back to 5% levels? >> yes as far as the fed's decision

making goes and how the economy is evolving throughout this crisis it is an encouraging number no matter what no matter the discrepancies or how you want to classify it. that will be an important factor for how they get engaged for how they are coming out of this fall out and in some of the months where we are receive this reopening. that is an important and positive sign to the markets at the end of last week that brings in additional focus to cpi released later in the day and in the u.s perhaps we get an upside there, you could get another boost to the yield and perhaps a steepening to the curve. >> another data point to watch i want to talk about yield curve control and whether you think this will play a role inned to's policy tool kit. given that the u.s. economy is

now starting to reopen and getting back to normal is this going to play a role in terms of the fed or will they keep this in the back pocket the yields on an upward basis and we think the fed would healthy really helping them along their goal to the broader economy at this point? >> clearly the fed is aware of how to push to main street after the criticism to push at wall street to the expense of main street and how do their lending

facilities design to assist those businesses at main street. how is that likely to affect the kind of policy decisions we've seen today >> when we think about what they've been focused on, that has been main street that is brought by the early release we've seen to include more small businesses. when you look at wall street, you've seen positive signs with equities rallying, spreads coming in. companies able to create debt in the high yield bond market that has been encouraging sign having some of those things gone quite well gives them opportunity to spend more time gaining towards facilities and helping towards municipalities >> what is the likelihood of negative rates in the federal

reserve? >> just say no to negative rates. those are words from jay powell's mouth he has been adamant about saying negative rates are something they think is an appropriate policy in the u.s. and others have echoed that message and we'll take them at their word for that >> we'll see clear message there on negative rates. nor more details and analysis of what to look out for ahead of the reserves today head to cnbc.com you can tune in later as u.s. colleagues turn to colleagues larry kudlow for their look at the economy. let's get a look at u.s. futures where we stand in the policy decision the s&p 500, dow and nasdaq all

pointing to a stronger start to trade. u.s. stocks mostly came under pressure as investors rotated back to tech names they lost a little steam nasdaq briefly crossing the 10,000 mark with strength from amazon and apple shares at expense of airlines, cruises and other retail names that pull back, investor rotation changing shape a little bit yesterday. the dollar index worth noting retreated another 0.2% the eighth negative session in the last nine. looking at european markets this morning, trading in the green across the board all of those major indices trading higher following yesterday, stoxx 600 fell 1.2%. down by the ftse 100 dropping about 1.2% yesterday. let's check sectors in europe.

the sector rotation has been fascinating to watch yesterday, we saw an unwind of risk appetite. reversal of that trade with a rebound of value stocks. this morning, financial services firmly at the top above 1% no doubt on the back of the credit suisse comments speaking at a goldman sachs conference taking place. after the oecd down graded the forecast, we'll speak to the chief economist coming up. that's it for the show "worldwide exchange" will come your way next.

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.

it is 5:00 at cnbc here are your "top five at 5:00." all about the fed futures. they are higher. tech in command. sector showing no signs of slowing. facebook, apple, microsoft all at record highs. troubling trend as money pours into insolvency spoks. investors may be putting themselves at risk of losing it all. >> continuing to respond to issues o