chevron is cutting their by 13% from their last -- is cutting there capex by 13% from their capex reduction looking at suspending their full-year guidance. buzz getting some bad because they didn't have guidance for the full year. all of that reverberating within the market. for more on earnings, joining me now is mark stoeckle, adams fund ceo and fund manager. great to have you. make your case to me as to why you want to be invested in big oil stocks right now. mark: i think the practical matter is that there's always going to be demand for oil. i think when you have companies like chevron, which reported a really good quarter today, you want to be with diversified companies. the upstream business is good. their downstream business is good. they have appeared to be really good stewards of capital. -- youtioned minnick ago mentioned a minute ago the reduced expenditures again. i think a lot of investors equate a very high premium, and i think they are doing iguodala with that. ,lix: do you then buy on dips or are you just not selling? mark: that is a really good question. now,e not selling

there are you cutting back capex?udith: of course, this is one of the measures we are taking on reducing expenses. in a crisis like this, you want to run the company in a conservative way until you have more visibility. you mentioned earlier that we had withdrawn guidance. that does not stop us from taking strong action in reducing costs, but also reducing capex. on the capex, we are very careful in terms of not isolating our future. valuations are complicated to do at this stage in the crisis, and we want to make sure we keep some of the firing power as we get through the crisis, and as opportunities might arise. guy: that is interesting. can i just come back to the issue of guidance and talk about what is happening here? it is interesting you talk about maybe holding back firepower. what would it take for you to have the clarity necessary to be able to provide that guidance to investors? what needs to change in the current economic sector as we start to reopen economies? i am wondering what key milestone you are loo

it also sees four-year capex -- full-year capex at $2.4 billion. revising down that full-year capex view. then to ab inbev. droppingrter adjusted 13.7%. the estimate was a drop of 14.7%. although we are seeing a drop, not quite as bad as what was estimated. april global volume declined by about 32%. it sees the coronavirus impact on the second quarter materially worse than the first quarter. those are the key numbers coming through from ab inbev. let's get to the first word news. larry fink has a stark message for investors. things are likely to get worse. he sketched a grim outlook for corporate america, including mass bankruptcies, empty planes, and an increase in the corporate tax rate to a size 29%. the risk of the outbreak will be severe enough to leave a long lasting impact on the american psyche. president trump has vetoed legislation that would limit his powers in relation to iran. he called it a very insulting piece of legislation. the veto was expected. israeli prime minister netanyahu can form a government despite the corruption charges

you have done that as well cutting capex by 40%, 50%.rom 350 million to 400 million. give me some sense as to why you made that decision and how you figure out what the right number is when you think about cuts you can make >> yeah. we believe in this environment it's prorimportant to be pruden. we reduced it from our initial plan of 350 to 400 down to 200 to 225 keep in mind, typically we are at that 250 level. we're almost commensurate with prior years. we decided that we'll cut everything that's discretionary. things like we were going to consolidate erp systems around the world. that was pushed to the right we have a lot of investments we pushed aside for automation. it's not the right climate to have industrial engineers on site we pushed some automation projects to the right. they will come back. it's easier for an outfielder to run forward than backwards as the year progresses, we see the economic situation lightening up a bit, we will pull some of the capex we push into next year pull it back into this year. we decided to be aggr

today's environment is pretty difficult to get things going, so i think the capex cycle will run, butmost encouraged by is the overall discipline we have seen since the bottom of the market in 2016. that strategy continues today. the dividend potential here is fantastic, especially relative to the dividend destruction have seen another sectors and room for growth in earnings, particularly the gold companies, is tremendous. we are seeing lower operating costs for gold companies and higher revenue lines without any significant objects spend money on an balance sheets being strong. i remember starting this job in 1993 in the dividend growth was phenomenal then. it looks as though 2020 is going to be a year where we are going to see a similar echo. how open are investors to the points of nuance that you are bringing up here with us today? overly focusedoo on the crisis and perhaps sentiment and the outlook for china -- i know it ties into what individual mining companies are doing but i suppose my russian is are investors looking to pick stocks at the moment or are they being driven by br

they are suspending all capex except for nondiscretionary items.ng back at the last quarter at the end of last year, you had the lowest reported net income in a decade. they are saying the first quarter did not get any better. a quarter of losses. 950 million riyals. they are talking about additional exertion on prices and margins. shale ripping up the dividend script. bp ripping up the capex script. this is the key to the rest of the year and 2023. the fed says we will not have a hike in rates. wti and 10 year government bond futures. tariffs, government punishment is coming. that is the theory from the white house. the aussie dollar down 0.4%. crude down by 6%. the bond market, futures trading , you could see a quarter of a point on the bond market. if tariffs are executed we turn l-shapee into an recovery. seeing a bit of strength in yen. let us return to our top story. raisingout donald trump a variety of issues. one of them is the death toll in the united states. it's going take 100,000. -- going to hit 100,000. donald trump promised a conclus

-- capex cut? >> you could.re will be other reductions in production, slowing production, so not just impacts of capital changes, but we have offered in country subject to the opec agreements, there will be production curtailment's there. -- curtailments there. and in other parts of the portfolio we are likely to curtail production. we will see production in the month of may down probably $200,000 -- 200,000 barrels equivalent per day and june similar, maybe greater. sense of howe a you are going to allocate your capex cuts, with what you are talking about? >> they are driven by our own views on where opportunities are very we have short cycle in the budget. that is one of our advantages. we are different. we came in with the strongest balance sheet, very breakeven and flexible capital budget through we are in control through the market signal is not calling for near-term productions. that is why it makes sense to reduce capital in the short cycle part of our portfolio. we are in control of that. the opec action

they will also curb capex. they may be interested in borrowing money.ll be interesting to see money, they will borrow not something that aramco had done before last year. that was the first time that they had borrowed money. only the borrowing that money to work to continue their investments in oil production, or to pay the dividend? that is really the question. to see a are starting pickup in demand as we see more economies around the world start to reopen. when do you expect us to reach those pre-pandemic levels of oil production? hard-pressedld be to reach them at all in 2020. we have seen an incredible job in jet fuel. gasoline will be the first thing to come back. the question really is, while we ,re seeing gasoline use pickup how string of a long will that be? are we going to see it go back down? it will also be very much dependent on where people live. are places where demand will go up, and places where it will remain flat or even trend downward. that unevenness will cause a lot of volatility going forward. we really don't know if the slight pic

and they essentially preannounced these numbers and it was all about saying they have 1.4 years of capexest expense to run with, and i think that's reasonable in an environment where we have the higher beta play and steve talked about this being more conservative and it's had a big run and it's been a bit of a pullback and you build a base in the 80s. >> let's move on to peloton with diana olick with that story. >> peloton came in with higher than expected q3 revenue and strong q4 guidance to more than double revenue year over year. >> no surprise, covid-19 has everyone working out at home and that is benefiting the streaming company which sells high-end connected bikes and treadmills although they're suspended because they require in-home delivery subscribers grew 94% annually and digital subscribers on the app which adds meditation, yoga and strength training, and global subscribers 2.6 million and they also just added dance and family fitness and john foley said on the analyst call, we believe we're accelerating our market share gains and increasing our lead as the largest and most sc

they beat on cash flow, capex, oil production, and they continued us show a track record of executionl low and cash is king. free cash flow is king. and nowight this week another capex reduction, now the company expected to generate over $300 billion of free cash flow for the rest of the year, which is pretty impressive. we think there should be follow-through on that. alix: who doesn't make it? not making terms of it and bankruptcies and all of that, after selling a bunch of assets and repositioning portfolios on our large-cap emp side, we have decent balance sheets, so we do not see a lot of near-term risk for bankruptcies. what we are seeing is some companies are able to tap the debt market. with that said, the more higher liver names with debt majorities , we are watching those names because they could be more exposed, depending on of oil prices remain challenged and the markets are close to them. occi has above average leverage and $64 billion of debt due next year and 12 billion over the next three years. that is a name we will watch on how oil prices do. that company still has

the: really interesting capex cycle has not adjusted from a year ago.nking of that and other ways to measure resilience and response, how is the rest of the year shaping up in terms of your expectations? >> as it stands, and you the full this earlier, impact of the lockdowns, current expectations are running for more than 40% drop in earnings. downs get better in q3, 30%, q4, down 20-ish percent. , if all the focus is on the recovery of 2001 -- 2021, experts are calling for something of a 30% rebound. this takes us essentially back to 2019 numbers. from that sort of market psychology, it is interesting to think about valuation. if you look at current year numbers, the forward earnings, 18, 19 times, well above two standard deviations higher than the norm, and that is scary. if you look at 2021 numbers, it is much more reasonable and to 14 a normal band of 13 times, which the market within europe has been talking about. matt: we have bounced from the bottom pretty sharply. how do you analyze the rally we have seen and what do you think about positioning

much capex asas we have had to date. 105 billion of manage revenue. that is 158% year on year.a 45% growth year on year. the cannabis business in the united states is healthy and doing well. covid, its period of has shown a sense of its maturity and it has been able to service all of our patients and adult use users around the country safely, serving curbside, selling online, incorporating delivery into our services, really to do anything we can to keep our employees and patients safe at this difficult time. ofaine: in addition to some the challenges you would have in this environment, with regards to the sale, i am curious as to what kinds of issues you might be dealing with as far as the regulatory front. regulatory relief potentially making its way down the pipe with more states legalizing cannabis and more softening of banking regulations that may have given companies like yours more options with regards to financing. i think you need to differentiate between the federal regulatory environment, and the state. on the state level, governors have really stepped up and allowed

that is a very different picture from what we are seeing in the household sector and also in business capex on the supply side in the components of expenditure within gdp. there are some programs to support retail sales. these voucher systems that china has got. at the moment they are still very small in the context of the size of the overall chinese economy and we are still very far below december, below the levels of spending that we saw in q4 even as of april, so it is a very timid response and the reason for that is partly they are facing inflation at the same time, and there has been a huge scale of job losses as well. the chinese household is still very much in a timid mood. tom: we just heard from our people in asia about the meetings coming up. there is a lot of effort to make it business as usual. i don't buy it for a minute. show, magnus was on the scathing the intentions of the coming is party. freya: what people are looking for is growth targets and the signal we are going to get for the rest of this year and the big question mark hanging over the second half of the year. what w

billion over nine years as a large of money and not as many -- not many companies are as large regarding capexs to apple but hp and dell and other companies will want to base themselves in the united states or be have -- or over the border in canada or mexico. is a bigger deal for the u.s. francine: is this a trump administration win? are they offering anything to these companies, or does it just make business sense because you can sell locally? tim: both. donald trump has brought to the fore something that has been a big concern within national security circles for years, concern that china's technology will catch up to america's or that china can get their hands on american technology. tsmc is mostly based in taiwan but there is concern of having so much american technology offshore outside the borders of the united states is something that is a weak spot in america's national security offensive. the real big wean here -- win here is yes, the trump administration, but for the national security council nsa, dod, all of those bureaucrats who have been concerned about this predating donald trum

they are -- cuts to capex. the outlook remains cloudy. haidi: su keenan in new york.e next hour, we speak to the jpmorgan asset manager global strategist about his expectations. plenty more ahead on daybreak asia. this is bloomberg. ♪ haidi: a very good morning. i am haidi stroud-watts in sydney alongside shery ahn in new york. we are counting you down to the market opens in australia and south korea. welcome to "daybreak asia." top stories this hour, asian-pacific stocks look set for another -- tempered byimism caution from the federal reserve. oil maintains its recovery from last month's epic plunge as more economies emerge

. ♪ alix: chevron cutting capex guidance again, reducing plans for spending in 2022 as low as $14 billion two as low as $14 billion for the year. apple does not provide a forecast for the first time in a decade. the haves and have-nots of big tech. in the white house takes aim at china. president trump place is more blame on the coronavirus. he's also considering an in chinese funds for -- in the market, if no one says sell in may and go away during the next two hours, i will be happy because that is what we were seeing. we had a great run in april for the s&p. now we are seeing a pretty steep selloff in the futures market. you're going to see some really weird volume coming in.

the upper body and produce in the same plant, the potential is to save up to 40% of costs by the end capexge. it could even be up to 2 billion of cost savings. that is an extreme example where we have been very bad in the past and would be extremely good in the future, but nevertheless gives you a good magnitude of the money on the table if we act correct the as we have decided within the alliance. francine: that was clotilde delbos, acting chief of renault. ritika: there was a third night of violence in minneapolis over the death of george floyd, a black man in police custody. hundreds of people protested and set fire to a police station. president trump tweeted the demonstrators were thugs and threatened to call in police. warneddministration trying i will be held accountable for the new security law that curbs freedom in hong kong. the president plans to announces response today but could range from imposing sanctions to revoking the special trade status. the u.k. will offer citizenship to 300,000 hong kong resident unless china backs down from the new security legislation. those who wo

what will happen with the capex? possibly the covid-19 causing peak oil.has caught your attention this morning? nejra: yes, there are so many things especially as i have had a day off. we talked about the fed pushing back on negative rates. curve steepening becoming a consensus trade on wall street, but also where we go hear from equities. since global equities have pretty much recovered half the losses from that march 23 low. manus: my favorite word this morning is conflagration. conflagation. can i talk enough until aramco drops? probably not. let's scroll back and have a look at markets. , the market futures is going to test of the fed. negative rates are not there. as you have one overarching theme which is blended isolation. you need to google what blended isolation really is. rolet overcome a have a look at the s&p 500. offered.e dollar is market, is that custer's last stand? have won theht battle against shale, but what have they done? money flows in. talking about the curve steepening, this is one part of it. bond investors are set to absorb a reco

that will be quite challenging given the drain on capex in the last couple months.omaine: definitely going to keep watch of this. really great for you to be with us today, be well. we will talk to you soon. francisco blanche is head of global commodities and derivatives at b of a global research. coming up, a new cluster of covid-19 cases in china sparking concern over the mutation. patients taking longer to show symptoms and longer to recover. a doctor fromto johns hopkins university, a specialist in infectious disease. don't go anywhere. this is bloomberg. ♪ scarlet: the pandemic has delayed u.s. economic growth. michael mckee spoke with the dallas fed president robert kaplan to get his expectations on when the economy can start to recover again. >> with businesses reopening, i think you can see a good, slow, steady recovery in the third and fourth quarters. what i'm worried about is despite what the government may ,ay or what the guidelines are there are certain behaviors that consumers will be reluctant to engage in. whether it's shopping, going to entertainment

relying on monetary policy to help us limp along, but invest in new technology, incentivize corporate capex, there's nothing that correlates there with productivity -- correlates better with productivity than r&d. toif you expect on a plummet rise, and equality to decline, that is how you see meaningfully hired gdp growth in developed economies that have otherwise stagnated at 1% or 2%. that means all of the trades that everyone has hated for so long, the value stocks, the financials, materials, industrials, europe, japan, the things that people don't own today, suddenly look much more attractive in a world of higher volatility. are you telling me this rotation into value, into the cyclical areas of this market, is not just a squeeze? it has legs? jared: i am not telling you this is the one. [laughter] there's two things in our latest report we flagged us things to watch to know when it is the big one. number one is the bond market. see value and high yield in europe rally in, but until you see confirmation higher bond yields, that is number one. number two is brent. when the top five stock

we were able to flex our capex spend the base on the volume drops.o leave it there, unfortunately. thank you for your time. this is bloomberg. ♪ . . scarlet: it is 2:00 in new york, 7:00 p.m. in london. i am scarlet fu. romaine: and i am romaine bostick and this is "bloomberg markets: the close" on this thursday afternoon. the market was looking for direction earlier. right now, that direction is clearly up. the s&p up 1% on the day. that is about where we stand with all the major indices. small caps were underperformers on the day. we have been talking about this aggressive rotation earlier in the week and last week into value stocks and out of the biggest tech names. that seems to be reversing a little bit today. tech stocks getting stronger. 1%, comingre than within about four points of its all-time high. face point also within striking distance of his -- facebook also within striking distance of its all-time high. still waiting to see whether president trump backs up the

the plug on an auto plant and think that you can just get a new one in a new state without a lot of capexpending and without a lot of subsidies, it takes a lot of time. who knows. he is frustrated with california government, he is using this as a threat. now he is openly defying the county. i am not sure what his endgame is here. the response from california politicians has been interesting. justtory is pretty hard to pull the plug on. there are a lot of supply chain issues, employee training. don't forget, california has supported tesla for years, longer. the state has been very pro ev. there are all kinds of tax breaks on manufacturing equipment. to kind of re-create that package in another state would be difficult. emily: i know you are continuing to follow this. the situation changes by the minute. dana hull, thanks so much. coming up, can the trump ministration force chip companies to start producing chips in the united states? ♪ the trump administration is trying to get semiconductors to start producing chips in the united states rather than relying on the asian supply chain. here t

quarter capex was flat.e meantime, we are also seeing increases in permanent cuts of jobs as opposed to just the furlough on a temporary basis. last but not least, we have seen dividends to help preserve cash. we are running north of 130 billion euros of dividend cuts relative to what we were looking at last. guy: one thing a lot of companies have done is withdrawing guidance. how easy is it to discount what comes next in terms of the european equity story? most companies do not have visibility right now. tim: yes, and it makes this difficult. of doing the process scenario analyses on a couple of court scenarios. one is that the opening up gets progressively pushed out because we have rolling shutdowns with more spikes. it is difficult. if you look at consensus, the with secondr -- quarter is looking for 30% drop in earnings, worse than the 209i mentioned. it gets a little bit better in q3 and q4. as you look to see what is implied in the market next year, it is about a 30% rebound. it takes it almost back t

they are also announcing their plans to cut capex by about $2 billion or so., they will look at transforming this company into a logistics integrator. that will have to take a backseat as they have to now focus on the impact of tackling some of the challenges presented by the coronavirus. vonnie: thank you, taylor riggs. still ahead, saudi arabia and russia see signs that oil demand is recovering as countries around the world start to ease lockdown. this as opec decides it is absolutely not. futures in focus next. this is bloomberg. ♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." time for futures. joining me is phil streible of blue line futures. we did get a drawdown that the markets were seeping early -- were secretly hoping for. is that a sign that storage issues might be winding down? phil: i don't think so at all. you could see how short-lived the rally was. we had already retested the low coming back into that inventory report. the problem is the supply demand structure on oil right now is not supportive of higher prices at a

we know the video gaming side is phenomen phenomenal we need to hear more of that data center and capex. that might be a challenge to deliver. >> what are you doing? >> i actually agree with josh. this is a long term hold for me. if it pulls back after the earnings and josh is right, we had a history of this company reporting and getting killed the next couple of days. it's just because there's so much enthusiasenthusiasm they are in data centers and gaming all those are growing. it's a question of does the market think their growth rate is equal to the expectations >> we'll take a quick break. we'll have our weekly chevy in with marc lasry. we'll talk about where the nba is it looks like it's getting closer to perhs apa restart. halftime is back in two minutes. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. at

we are cutting our capex budgets for what the economy has for the future.not think we are in a doom loop where we are going to go it is some kind of depression, but i think the climb out of this is going to be much slower, much more difficult than people might have thought even a few weeks ago, or even some people think today. i think there is a norm is scope for the government to help if it in the mood to, but maybe it will be different this time. david: thank you for joining us today. ner, chairman and ceo of willard advisors. tomorrow at 6:00 p.m. eastern time we will have wall street week, where we go over many of the issues we talked about with steve rattner. that starts at 6:00 p.m. friday eastern time. coming up, we will talk with the president of the afl-cio richard trumka. this is bloomberg "balance of power." ♪ david: welcome back to "balance of power" on bloomberg television and radio. i'm david westin. represents 25 million workers, and its president, richard trumka, has been campaigning for a federal standard, safety standard, tied to coronavir

here is what we don't know when does data center spending resume its upward course a lot of capex on hold now you look at nasdaq, tech stocks, they seem to be doing really well stocks close to all time highs but you don't know what their spending plans will look like. if a lot of planned accumulation of the types of things make get put on hold. >> pete, walmart, target next week along with tjx. >> pretty excited about all those. i own calls in walmart i own stock in target. in terms of target and walmart, they have been knocking it out of the park for a long time. every time we go over there, parking lots are packed. people are coming in and going through and picking up if he gets close to the stickiness he's talking about, i think they will be able to put up some monster quarters >> what about best buy >> i love the name i think they do an outstanding job. it's difficult of an environment for them right now. i think all of that will feed into best buy in the future. people are spending out the experience online has turned tout be something much better than they maybe even expected.

capex it's not entirely surprising that you're seeing some weakness in tech this week. i just think we have gone a little too far, too fast doesn't mean we'll retest the lows because the fed has basically taken the bankruptcy concerns out of huge swaths of the economy. go down 10, 11%, sure, but not retest the lows. >> it's power, no doubt, what the fed has done we wouldn't be here without that we wouldn't have had a 30% jump off the low without that sort of intervention it's awfully difficult to sort of quantify what it's truly meant because you still can't put a number on earnings you know they've put reenforcements on the floor. they've built up the floor so high it's going to be hard even if something hits it to breakthrough it. that's the point we're talk about. shannon, how do you see it great april. here we are in may what do you think happens? >> i do think we're going to see stall here and a bit of a sputter. i think your comments and the d rest of the group's comments are well taken even if we see a reemergence of cases, i think there's very little appetite to

- we're not necessarily in the oil and gas industry, but we serve some of those customers so their capex budgets are our revenue essentially. for airlines that's something we're monitoring our aerospace business isn't all airline related. 40% of us is defense and space which has been resilient we actually think the business aviation segments, which we're also in, is going to come back faster than the air transport. the underlying trend that we see and at least we've built into our assumption is that q2 is the bottom, q3 is a little better than q2, q4 gets better and then 2021 we're not anticipating a v-shaped recovery. we're anticipating a recovery but a more of a gradual one. >> yeah. nonetheless, though, basically saying that he is an optimistic here and he does hope and anticipate that this is a recovery that takes root over months rather than years we discussed honeywell's positive or relatively positive outlook for trade relations with china, given the fact that they have this localized manufacturing footprint that keeps them somewhat perhaps isolated from bigger geopolitical issues

the beginning when we -- when covid-19 came out, we decided immediately, we're going to increase our capexhought it was insurance if the traffic would be different it was not even though the network -- we are 1200% more usage on the network when it comes to collaboration due to conferencing and other things. 9 netwo the network is coping well this is a time we can invest more and it is responsible and it's the right time to invest. so that's what we're doing right now. and as i report, we'll have our first earnings call -- we are on plan for our 5g deployment, and they are big we are doing five times more -- we're going to do 60 cities. we are rolling out our fiber which is somewhere between 1500 to 1800 route lines a month at the moment we aren't holding back we think this is the right time to invest for us and for our customers. >> i think you're definitely right. and i feel my charitable trust has always had a position in verizon. i feel like i'm going to continue to say to people when they stop me on the street, how about verizon? it doesn't ever hurt me. thank you so much, hans, veriz

do you have a sense of how you will allocate your capex cuts? >> that is driven by our own views.ne of our advantages. we are different. we came into this with the .trongest balance sheet we are in control of these choices. we are in control of that. we will reduce this in a short cycle activity. how quickly can that come back? or do you anticipate it will be permanent? >> it can come back relatively quickly. for stormslls down and hurricanes and things like that. at people are very good bringing production down and then ramping it back up. we will come back up again in a matter of weeks. done in a way that is very careful. and does not cause damage to wells or reservoirs. local reports here in hong kong that the government may let cinemas and gyms reopened. they may raise the limit on public gatherings eight. that could be some codenames. we have had eight days with zero new infections. tom: that is certainly good news. seems like they are easing restrictions. pmi data out for a .umber of these economies trump said he will release a conclusive report on the chinese virus origins.

a lot of companies are still cautious with how they use their cash, whether capex or getting a back toi actually trust these dividend yields icr published now? -- dividend yields that i see published, that i will actually get them? >> when you want to look at the dividend yield you need to factor in that the dividends are not going to be as high as we see on the trailing yield. having said that, the japan dividend is, indeed, one of the three we have highlighted in the last week. is japanese companies have been holding cash for some time. and one of the reasons why valuations of some japanese companies have been lower than the rest of the market. but when we come in this situation, where cash is becoming key, this is where the dividend looks relatively more comfortable and more robust. we would see in the u.s. or europe. see these, as you can two parts of the world, some changing in the regulations or even in the legal framework. thatcontinue to believe japan is going to be a safer heaven for dividends. david: i like how he describes it. since you mentioned valuations, i want to get yo

longer-term, the implications may be quite positive if we see more companies allocate more capital into capexestment, etc. in the long run, this could be quite a positive thing. anna: that's really interesting, because we do see that money going into capital expenditure. let me ask about dividends, because the two are linked, obviously, and we are seeing a lot of companies cut back dividends in the sectors you would expect, oil and elsewhere we have seen government help required. but elsewhere, dividends are still being paid, a point in the equity income portfolio manager is aware of. richard: absolutely. you have had a lot of announcements recently about dividend cuts, but i don't think there is any reason to despair. you are still getting dividends paid in and lots of sectors. -- in lots of sectors. from a global perspective, it is worth bearing in mind that in the u.s., most companies are still paying dividends there. it is a lot easier for companies to turn off the buybacks and still keep paying dividends. as we look across the global landscape, we still think you can find attractive oppo

capex. obviously, investment in europe is very well as -- very low as well, in the u.k. because of the uncertainty around brexit. there is an issue here. , the -- of investment is private investment. when you don't have it, better public investment the no investment. matt: absolutely. thanks so much. nejra: thank you. matt: chief economist at bank lombard odier. we both thank you for joining us. anna? anna: yes, indeed. unicredit's german arm is playing a big role in facilitating government loans to german companies. we will talk about that with unicredit germany next. this is bloomberg. ♪ w?w?uhió'ñó anna: welcome back to the european market open. half an hour to go until the start of cash equity trading. u.s. futures dewpoint a little bit higher. let's get to some of the stories we are watching for. later today, the european commission will unveil its spring package. this will lay out recommendations for member states taking virus impact into account. the bank of england governor will testify before the u.k. parliamentary treasury committee about the economic fallout o

they took steps to further optimize capex in 2020, which means bringing that significantly down.do say they are going to retain significant flexibility to adjust expenditures. it is good to have that any time you are running such an important company. they have identified opportunities to improve operating productivity. just to repeat, they had $16 billion in profit, paid out $13.4 billion in dividends, and they plan to play $18.75 billion in the current quarter. anna? anna: let's move on from the oil story. we will get back to that ram do story shortly. we will have analysis larltse on this hour. let's turn our attention to the fight against covid-19 and how that runs up against reopening the economy. boris johnson here in the u.k. waters down his play for rebooting the u.k. economy. unions have told the british prm prime minister many businesses aren't ready to reopen. he tells employees they should now think about going back to work providing your work place is covid secure and providing you can travel to work safely. employers can't force staff to return to unsafe environment

europe, but at the same time, perhaps this increased remote working conditions being a positive for capexications and information services. now, the pandemic of course hitting hard retailers. the latest earnings reports, at least here in the u.s., showing that online sales soared as customers stockpiled merchandise. su keenan joins us with the latest. walmart, one example of a retailer that benefited. saw walmart sales with consumer stockpiling. it's results reinforce how americans really shifted their priority and spending because of the pandemic. check out the stock chart. you can see a lot of the retailers down because the market force ended lower but walmart has been up as much as 3%, closed down 2%. home depot, by the way, also saw stocks higher, but it failed to lift profitability. it increased sales that were off cut by the covid-19 measures and that put pressure on the stock. at one point, it was down 10%. but it's online sales were up 60% in april, and we have a chart of online sales versus in-store sales and for walmart, you can see that their shift to really beef up their onlin

industrial sector, tech is recovering quite nicely and is good for japan given exposure to china given capexstill deal with less demand out of china because one of the big drivers of external demand from china was that story and i think that will be down in the dumps for a long time. it's encouraging to see the manufacturing recovery is coming along nicely. you talked about policy support. caretta has, to say perhaps negative rates are not an option at this point in time. what do you make of the about turn? i think the pivot away from negative rate policy has been clear for the past year, but now it is -- has become more explicit from the bank of japan. i think the idea with interest rates already very low and banks facing challenges with business models, now is not the time to deliver further negative rates and put pressure on financial intermediaries, which need to step up if we want the recovery process. the bank of japan is focusing on interventions, so i think the risk of further rate cuts in japan is quite low, but we will have to focus on the and thee bond rates lending program they a

think 80% of companies during the last earnings have essentially said we are suspending buybacks and capexdividends are next. the people are trying to defend their dividends, but if they can't, chop the retail leg off the markets. amy, good to see you. my last question, how much "my little pony" have you watched now? amy: oh, we have moved on. [laughter] alix: amy and i both have five-year-old girls, so we have a deep appreciation for disney cartoons. amy, good to catch up with you. amy wu silverman of rbc capital markets. onwant to give you an update headlines outside the business world. here's ritika gupta. ritika: president trump again exposing his unhappiness with china. this time it has to do with chinese companies. he tells foxbusiness he is looking at chinese firms listed on the u.s. stock exchange -- on the new york stock exchange or nasdaq that don't follow accounting rules. the fbi has reportedly seized the mobile phone of the chairman of the senate intelligence committee, richard burr, according to "the los angeles times." burr and other senators sold holdings this year after a

i think that is the one issue at risk to the commodities -- to the capex commodities.acturers back into their workplace, which means more capital goods for the workplace. alix: always good to catch up with you, jeff currie of goldman sachs. here's how the pandemic is heading another corner of the market. bloomberg found some new coronavirus hotspots. the disease has spread at more than twice the national rate in counties with major meatpacking plants. in the week of april 20, confirmed cases rose 40% in countries with big before pork slaughterhouses, compared with a 19% rise nationally, one week after president trump issued an executive order directing that the meatpacking plants reopen, something definitely to watch. we do want to give you an update now on headlines outside the business world. here's ritika gupta with first word news. ritika: a stern warning from dr. anthony fauci. the u.s. infectious disease chief will tell the senate today the country risks need the suffering and death -- risks needless death and suffering if the economy reopens too soon. all 11 mil

they also have identified about $3 billion worth of capex reductions this year, and they expect to incurthat stock is still up in premarket. this is bloomberg. ♪ we may have to go beyond the normal and conventional pools to use things that are of an exceptional nature, and that have to be with the calibrated appropriate level of deviation and room to maneuver in order to actually deliver on that mandate. alix: that was ecb president christine lagarde. still with me is torsten slok of deutsche bank. christine lagarde trying to talk up ecb report. then you have the foreign finance minister for germany saying the constitutional court could really rip apart the euro zone here by declaring the asset purchase program illegal. what side of the equation do you fall on? torsten: this is, of course, a very difficult situation. lagarde also said very importantly that no one is to blame for this crisis. i think that is an important starting point for organizations about what needs to be done, in particular the fed, ecb, and bank community. it is a lot easier for the central banks to deal with this b

david always wants to ask capex. the next thing you ask is how much have you moved out of china? those who moved a lot out of china are having better-than-expected numbers because they're avoiding the tariffs. >> we didn't talk hpq yesterday after you had that ceo on the night before it was down sharply. not doing much of anything today. do you think part of it was share taking from dell speaking of dell, the ceo will join us later. >> michael dell crushed it, vmware crushed it. the dell quarter, a lot part of the dell was not that great. what mattered is they went all in office, the home office, and they owned it. it was michael dell being his competitive best that's what we know about michael. michael is a nice man. but when he decides to take share, he kills it just magnificent he took it out of a lot of different people that dell deserves to trade like it is. good quarter i urge people to look at that quarter. when i say urge people to look at it, when you're over the weekend, when you're trying to figure out what to do saturday night because there's nothing to do, the dell q

maybe less capex, although if these companies don't niese the cash they've raised, wouldn't be surprisedo see m and a and a buy back of restart activity but that's probably several months down the road. >> yeah, nobody's talk iing abo restarting buybacks. up next, we'll ask the chairman and ceo of dow about the cost of reopening his facilities around the globe and how he enplans to ensure workers are safe from coronavirus. that's next. ♪ ♪ ♪ ♪ ♪ right now, there are over a million walmart associates doing their best to keep our nation going. because despite everything that's changed, one thing hasn't and that's our devotion to you and our communities. our priority will always be to keep you and our associates safe, while making sure you can still get the essentials you need. ♪ >>> dow down 35% for the year so far. dow has more than 100 manufacturing sites and as the world starts to reopen, the company is laying out a new plan to safely bring its employees back to work and joining us now is dow chairman and ceo. jim, welcome nice to see you. >> good afternoon, sara. great to see you again

how many of those corporations have cut capex go to 2021 for me. look at the numbers.ck into a multiple that makes sense now. and growth rate from 21 to 22. i'm trying to understand why this valuation is one you're comfortable with >> i think indices are not america. the s&p represents -- has a lot of zombie companies in it, but the stocks are not american. they're a unique combination of companies that seem almost built for this moment. they surprise people, but they shouldn't. apple has good numbers amazon has great numbers these are giant companies. facebook has a new small business initiative. what could be debetter for stock market alphabet, you can cheat on your homework all day because you're doing it at home these companies, it's almost like someone said let's create some companies for a pandemic. those companies are incredible now you join a walmart or a home depot. there will be a huge number of people unemployed. i'm not betting on a "v. i'm betting on a "u. we have to open places and believe that we can hold on. the restaurants, no restaurant can open and h

at the same time we know big companies are cutting capex.een a parade of them are not, and the first thing that can go is marketing and advertising. is the market shrinking but market share growing >> i have intuit on tonight. intuit in different presentations has said the following, because of desperation, because the stores are closed, because of issues involving covid, they have no choi choice but to keep omni channel. when they have those incremental dollars they're giving them to facebook and google. that is something to watch remember, a lot of small businesses, they need some cash coming in. it's very interesting. you saw something that mark zuckerberg was interested in, the small business initiative of which there's a lot of leverage if you can get people looking at the ads. that's where it's going. they're desperate. they're absolutely desperate >> we did see commentary from some of the media companies that own local stations that it's weak restaurants, gyms, auto dealerships, all of those a key part of local advertising, not happen

again they are very positive for the long term, but the hit in immediate going to be to hiring and capexns so i think that is really the question here, is that how bad are things now, but what is the path moving forward, and i know everyone is getting into alphabet letters, and you know corporate logos trying to figure out what shape of the rover is, i think, the up shot is that the stimulus we have seen so far, monetary and fiscal is warm-up, and we will see much more stimulus on both fronts it will last much longer, than anyone is currently expecting. maria: and we know a number of retailers service businesses restaurants will not make it out of this you've got retailers filing for bankruptcy j.crew neiman-marcus more than two million retail jobs disappearing in april thousands stores closing as well as consumers shift to only shopping, jon hilsenrath, your thoughts, as we see this 10 trillion dollars of stimulus get executed. >> so two thoughts, one relates to stephanie one relates to retail sales report today, out thelook for the consumer is the outlook for the job market i think the

maria: yeah for sure, mike you lowered your capex forecast for the year by another two billion you weree to generate 31 1/2 billion rv above expectations let me ask you about getting out of this, do you want to see government help financial assistance, for the oil industry? what about chevron? and how many bankruptcies are you expecting to come out of this do you think we will see a fair amount of shale companies be unable to make it through this? we believe in markets first and foremost, maria we believe in markets good times, and if you do that should believe in markets in difficult times as well our industry has seen cycles since beginning of time, and that has taught that you say we have to be prudent with our balance sheet we need to be prepared for downturn certainly prepared to compete in any environment which is why we came into this with a strong balance sheet low break even about about flexible program we believe go to should focus on health sayings focus on creating capacity to support people who need it focus on doing things to get the economy reopened, which will then provi

we are a lot quicker to switch between -- them -- >> sounds like we -- >> it takes a little bit of capexant. that's why we've seen some of the dislocation. >> mark, you're also obviously an international company, thus the name international paper what are you seeing in places like china and europe where the coronavirus hit first and maybe it's clearing up a little more quickly than here? >> yeah. europe is a decent sized business for us, mostly packaging. we are seeing country by country recovery we have some businesses in southern europe primarily, mostly food packaging. i'd say italy is starting to recover a little bit better than spain and than france. for our business it was good again in the first three to four months of the year now everybody's got food stocked up the same question that we had in the u.s., which is a much bigger part of our company, is how successful are the individual companies in reopening and how confident are the consumers. we are monitoring that very closely. in china, we don't operate production facilities but we export from the u.s. from a joint venture in r

. >> michael, the steps that you're taking today, including cutting capex by another $2 billiondown toon, is that something you're doing because you have to based on the moves we saw in the lastmonth, which all came after the first quarter ended or is that something you're taking in case things get worse from here >> well, we were prepared. you know, the playbook to respond to a situation like this in our industry isn't really a secret what matters is how you execute. so we've already taken strong moves on capital spending announcing today another $2 billion reduction so that's 30% or $6 billion off of our original budget. we'll actually end the year at a spending rate that's about $8 billion below. so 40% reduction stock share buy backs of 5 billion per year we offered a billion this year and a billion next year. we've been able to close almost $2 billion of asset sales even in this environment. in a low price situation in a commodity business, revenues dropped much faster than costs adjust and so it's important to have a strong balance sheet and it's important to be able to take the