joining us to discuss this is dani burger. rgan stanley is looking at the forces of central-bank and government, morgan stanley saying the -- meaning down the road we will get a huge pickup in inflation. it will be able to end the cycle we have seen of low growth and low inflation. they also say when you see what coronavirus is doing and expanding the wealth gap in different societies, that is going to force government's to act. that act is going to hurt three factors, which have helped keep inflation low. that is trade policy, tech giants, and corporate titans. they say the wealth gap trying to solve that is essentially going to move those factors from the picture. they say the biggest threat of this researching is in the u.s., and it is like that to be in 2022 when the threat is the biggest, but still it, it is ins cycle of central banks overshooting the target, according to morgan stanley. francine: doesn't that fly in the face of the deepening inflationary trends we have been seeing around the globe? dani: it is certainly a

for full around off of earnings, let's get to dani burger.more forecast have companies had to lower? it totainly expect continue to sink. a lot of them just are not giving an outlook. ryanair being one of the rbs saying there's too much uncertainty to give an outlook. analysts continue to cut expectations. they did so heading into the earnings season. they lowered the bar about 22% of missed earnings estimates. the anticipation is these earnings will be bad. they are living up to that with earnings growth cracking a slump of 22% in the first quarter. most of that lag is coming from energy. shell dividend cut here, energy down 42% in terms of earnings growth. care, utilities, communication services, all of those are tracking higher with a bigger earnings growth which will reinforce equities. francine: what our expectations looking beyond this first quarter? >> in 2021, the consensus is we get a rebound. we see about a 2% growth higher than it was in 2019. as bloomberg intelligence puts it, the key is 2021 earnings power. the consensus is a reb

here with the details is dani burger. the u.k.d other european countries and some american states in relaxing some of its lockdown measures. have we started to see any activity pickup yet? >> for g-7 countries, there is definitely some tentative signs that activity is on its way up but it's certainly slow. despite the fact that you have these reopening scum of the hope that you get a lot of spending, it's simply not happening. yes, there is more movement. where is it the strongest? throughout europe, the biggest pickups argan visits to -- are in visits to parks. that is not going to contribute to the economy in any meaningful way. we see this in driving data. driving has picked up. things like air transit, public transportation in general is still very low. also, just staffing of offices for s&p 500 companies still very low as well. our usage is also a great way to track economic activity. when you look at that, doesn't show a revival -- does it show it revival? >> we see a pickup in italy especially. germany, for example, saw mor

here is dani burger. the u.k. joined other countries in relaxing lockdown measures. have we started to see an activity pick up yet? dani: the progress is slow, but there are signs of life. this is most apparent in countries that have come off of lockdowns. you look at the mobility data for the u.k. and italy, some of the hardest hit countries, and people are not spending or moving as much. the act -- the economic activity is picking up, and issue is they are going to parks because they are fatigued of the lockdown. they are not doing anything that to spending adds and economic activity. that is why we have seen a pickup in cars. in the u.s., europe and china, it will not make much of a difference in terms of getting the economy up and running. in the u.s., when you look at staffing andnies, their headquarters is near at zero. even though stock markets are pricing in normalcy, there is a long way to go. some of these companies can function with employees at home, something small and medium businesses cannot afford to do. a goode: power usage is way to track economic ac

joining us with more is dani burger, our markets reporter. what has been the reaction? in part it is exactly what you have been talking about and it is the steepening of the yield curve becoming the consensus trade. you have to look at exactly what is being pulled. you would think that in times of a pandemic, investors would want the longer dated bonds. however, the treasury is reintroducing the 20 year option. it is going to auction about $20 billion worth of that. there is this huge duration risk coming to fruition. is going to insist on the higher yield. that is why they are seeing the action of the yield curve continuing to steepen. nejra: let's talk about the issue --manus: let's talk about the issuance. you dani: dani: have been talking mother record issuance of european -- you have been talking about the record issuance of european companies. dani: corporate bond issuance is booming. they are tapping the bond markets because in the meantime they want liquidity, they want to short liquidity to make sure they can whether the pandemic. when we look at equal sales, th

with a full round up of the story, less go to dani burger.ok at entirety of the hedge fund universe last month, anyone who did well was long stocks, not surprising considering what the u.s. stock markets and global stock markets did back in april. that means funds like bill ackman, pershing square, took their daily total to 17%. some equity managers still did not beat out the 13% gains we saw in u.s. stocks, including ultraglobal as well as fund which was up about 9% in the month. francine, the best since 2009. strategy,ross multi citadel returning 4%, but for most strategy investors who invested across assets, it is more difficult of a prospect considering the fact that they also had to contend with negative oil prices out one point, weaker. that is why those returns do not look as strong. it is another market upheaval that these managers are having to deal with, though not necessarily the same upheaval as the first quarter, slumping into a bear market, francine. francine: thank you so much, danny merke dani burger lookinge hedge funds. up n

about this istalk bloomberg's dani burger.ng one of many ipo's beginning to come back to the market. market volatility is subdued. these companies want liquidity. now is the time to jump in maybe if you have been holding off the ipo or a secondary offering. we have seen bankers start to speed up this process. they want to get in right now when markets are calm. get in.s wanting to this is the quickest ipo of the size. that just shows you how desperate these companies want cash. they think now is the time to do it. we are also seeing demands on the investor side as well. companies that have really -- recently ipo'ed are outperforming. they're filling up their order books really quickly. to ipo early because of increased demand. francine: we are also seeing more demand for corporate bond sales. they are smashing records. what is behind that? globally, is true especially in the u.s. this week means we saw u.s. investment grade bonds, market value, smashed through $1 trillion offered. this is double the pace of 2019. usually, it t

joining me is dani burger. news to describe this, devastating, record-breaking, unimaginable, heartbreaking. we are focused on the headline number, but what should we be looking for below the surface of this jobs report? are likely to confirm all those awful adjectives, but the depth of pain and in what segments this is hitting the population is what we are looking for in this more comprehensive report. 27 times the worst of the unemployment we saw during the financial crisis. it will be interesting to see who is hardest hit. we are likely to see those with lower wages who have seen the biggest extent of layoffs. these figures help us determine how long the economic pain is likely to continue. one of the figures that will help us is temporary workers who have been hit. last month we saw 77% of unemployment was due to temporary furloughed workers, that is a positive number because when the caps are turned act on, they can get easily into the workforce. if the temporary layoffs become permanent it means a longer

bloomberg's dani burger, thank you so much.was saying, we have a fair amount of risk in the market. if you look at what u.s. futures are signaling even ahead of the painful adp report yesterday, the euro is pretty much unchanged, but it is the pound catching attention out of g10, catching a bid after no change to the boe's policy, and he did forecast a v-shaped recovery terms of growth. perhaps that is giving the pound in little bit of a lift, the kroner on the move as well, with the decision from norges bank, the 10-year healed steady ahead of the jobs report tomorrow come and crude a little higher as well. though pretty much anchored at $24 a barrel. "bloomberg surveillance continues in the next hour. this is bloomberg. ♪ staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xfi pods to your home in a snap. or change your xfinity services with just a touch. all in one place. you're only seconds away from all of that on xf

here to discuss the coming wave of fallen angels is dani burger. good to see you. ntext of how dire the situation is. oaktree capital referred to yesterday. give me the numbers. sani: so far year to date -- dani: so far your today, $300 billion worth of bonds have been downgraded. it is likely to get much worse from here. 111 firms are at risk of becoming sub investment grade. that's the highest number on record. the coronavirus has brought this, as has the drop in oil prices. this crisis was almost waiting to happen before the coronavirus hit. almost 50% of investment grade firms were the lowest rating. these were companies that already had a lot of leverage on balance sheets. that reduction of cash flows likely to push them to become fallen angels. firms losee 111 their investment grade status, that's a big deal. becoming a junk-bond means it will become more difficult to raise funds. the cost of capital increases. when you look at these companies , there are a lot of financials, burgeon money, for example, bank virginand -- version -- money, for example, bank of

dani burger joins us.ifically, how did this company find itself in this situation? >> certainly an exclusive club that no issuer wants to be a part of. when they first offered these bonds in november, there was high demand. since november, the picture has changed and the economy especially, with the demand for rental cars all but disappeared. they basically have to pay back $400 million worth that they owe to other lenders. today is the deadline for them to hammer out a deal what to do with this. if they cannot reach an agreement today and at the moment, reporting suggests there is an impasse, they may become insolvent. people who bought those bonds in november see the company default without getting a single coupon payment. blow,that would really right? to make a big investment and then get nothing before the company goes bankrupt. the fact that this went out in november could trip a lot people up. that is a super bummer. defaults on the rise, how do investors justify buying risky bonds now? think it woul

here to talk about this is dani burger. s of this is just, what performs the worst heading into march? we saw energy, material names, autos. it is a bit of a mean reversion that we have seen these stocks do the best coming out of the market. this is a good thing. of thes the breadth stock market after the lows look better than they did before. it also means that tech just did not do as badly at the start of the. tech is this anchor -- the start of the year. tech is this anchor in the market. this sector stays steadfast. tech is very much still dominant. what contributed most to the s&p 500 based on market cap, you see the reliables, amazon, microsoft, facebook. in europe, only health care has had gains year to date. in the u.s., it is tech with the biggest gains year to date. matt: what is it going to take to d thrown the growth stocks here -- dethrone the growth stocks here? do we need confirmation of a vaccine or treatment? when is value going to come back? >> it really has to do with just some visibility on what earnings

here to discuss the coming wave of what had begun known as fallen angels is dani burger. y looks like a dire situation from where we are standing. $300 billion worth of issuers have seen their debt downgraded, the most since 2015, but it is likely to get worse. global, 100 11p issuers are at risk of losing their investment grade status. in some ways, the environment was really ripe for this to happen before the crisis. more than half of issuers where the lowest rated. once you get the coronavirus pandemic, oil prices fall, you get a lot of this debt at risk. certainly, we see a lot of financials like virgin money, autos like to show, and went -- like peugeot, and when they lose money, it is harder to raise money. this is the worst possible scenario for having a hard time losing money. considering a lot of them are already at risk of defaulting. anna: yes, and what is being done to support these companies at risk of being downgraded? we have seen the fed willing to step in. into part of the market that may have been unexpected. absolutely. jay powell emphasized the need to

dani burger with some of the stocks you should be watching.g business in a time when there is not a lot of catering going on. interesting to see that. watch that stock at the open. we have news around europe. some of that came yesterday. suggest stock futures quite a bit of upside at the start of the trading day. quite a bit more than they did just half an hour ago. u.s. futures point to the upside. better politics in europe. this is bloomberg. ♪ anna: a minute until the start of the european trading day this tuesday. chancellor merkel and president macron back a 500 billion euro recovery fund for the european union, but the deal needs the support of all member states. we will speak to the eu vice president. president trump calls the world health organization a pundit of china, threatening to pull funds unless the reforms. the u.s. drugmaker moderna soars after positive results on a potential vaccine. shares to fund the development. futures looking more positive in the past half hour. matt: as we started the program 50 minutes ago, they were u

dani burger has been looking at the details. what kind of tone did we get from warren buffett? ting tone from buffet. and actions somewhat different. he held on to $173 billion cash pile saying because of the fed's actions, there were less deals to take. penny scott liquidity from the fed so they didn't need to turn to investors like buffet. he sold his stakes in four major airlines, saying the industry has fundamentally changed. matt: thanks very much. a quick one, but we will come back to you a little later in the program. dani burger with a little bit of the news of what came out of the berkshire hathaway shareholder meeting. coming up, the market open, less than five minutes -- four minutes to go. futures are down. ♪ these days staying connected is more important than ever. so we're working 24/7 to maintain a reliable network, to meet your growing internet needs. we're helping customers who are experiencing financial difficulties stay connected. we're increasing internet speeds for low income families in our internet essentials program. and delivering self-install kits to yo

matt: thank you very much, dani burger., futures are pointing with and we will speak michael o'leary, and interview you do not want to miss. we will talk about the future of ryanair and the future of air travel. this is bloomberg. ♪ 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. matt: tech troubles. global stocks get dragged by big tech, with amazon predicting a possible loss in the second quarter. apple is skipping its forecast completely. and more protections. the ecb tweets policy to lower banks to fund in economy -- lure banks to fund an economy in trouble. the

dani burger with some of the stocks you should definitely be watching. in less than five minutes' time. we have futures pointing higher -- at least they were last time i looked. marginal gains -- not huge, but we are still seeing .1%, .2% up on futures. the open next. this is bloomberg. ♪ 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. to europeane back market open, a minute to go until the start of the trading day. and o2 will be combined creating the uk's biggest phone and cable operator. the decision about that already this morning. the bank of england signals that may need to do more to combat

dani burger. buffett struck an almost comforting tone.inted to the anxiety people are facing and it was clear this was a meaningful meeting for him. talking about times american resiliency has been tested, but not broken. he mentioned the fact he needs a haircut, that he has gotten used to wearing sweat suits. it was a humanizing moment. overall step to his mantra that america's best days are ahead of it. the does not quite meet description of optimism he has had, it does not match the huge cash pile berkshire hathaway has built up. $173 billion. they are still sitting on. they dumped airlines, the four biggest u.s. carriers warren buffett held. saying the picture has fundamentally changed. on the one hand, he's optimistic america will stem the tide. on the other hand, still sitting on a massive cash pile and getting word of their airline holdings. if buffett is so upbeat on the american economy, why hasn't he stepped in to buy u.s. stocks? >> this is someone who once said often dark clouds come into the economic sky and rain gold and whe

dani burger has the proposition to bring to you. back in the studio, back at her wall.it away. h ai: i'm back and withi surprising call from morgan stanley, saying inflation is to come to overshoot central-bank targets. that's because we've had coordinated policy between governments and central banks, the government spending more than a trillion dollars on stimulus and they say that should be seen as low inflation. isther tenant of the call trade policy, tech giants, and global corporations, they say the growing wealth cap will to close theents wealth cap and it should upend the forces they talk about and the city u.s. is the most at risk of seeing inflation very ted but they say it is going to thisround 2022, but central-bank action, we will see inflation overshoot. manus: doesn't that fly in the face of the deepening disinflationary trends we are seeing around the globe? dani: yeah, this is certainly a contrarian call. which started to see bets for negative interest rates. part of that is likely traders hedging themselves for disinflation. placing calls we will get di

joining us is dani burger. with 30%ks contrasted gains in u.s. stocks since the march lows. o justify his bearishness? dani: he says investors who have , they arese stocks operating on a false premise. the premise being that the mass of liquidity injection we have gotten, this stimulus will save the u.s. economy. he says that's not true. it won't help to spur u.s. growth. he calls the programs from the fed and congress just a transfer of wealth to individuals, encouraging people not to work because they are getting paid more to stay at home been going to their jobs. keepingthat this is zombie companies alive. harsh words. he says that the treasury borrowing will crowd out the price of the economy. he had harsh words for president trump, saying that the trump administration will become the poster child for bad policy response. the worst policy response on a risk reward basis. manus: politics is never far from markets. he is bullish on one thing. i'm waiting for my special guest -- get from nejra to be delivered. i wait and wait and wait. millerccording to duncan , you should b

thank you so much to dani burger. we have numbers coming through. let's get to them.uarter net sales. 18.2 one billion euros. the estimate was 18.24. ever so smaller there. the key is that they are committed to its dividend policy and buyback program. that is interesting. that has come through. everything they are looking out for is less. they are maintaining their full year outlook. -- see free cash flow above. crisis,the coronavirus while a lot of companies have suffered, one of the areas that has held up because customers have been stockpiling is the growth sector. the maintenance of the full year outlook, we will speak to the ceo. this is bloomberg. ♪ this is "bloomberg daybreak: europe." let's get back to the numbers we just broke. the key thing to note is that they are maintaining full year outlook, committed to dividend policy and buyback program. as for the first quarter, net sales came in at 18.21 billion euros. the estimate was 18.24 billion euros. joining us now is the ceo. welcome to the show. thanks for joining us. the first question that springs to my mi

dani burger joins us with aviation. let's start with with anza -- with looked anza. -- lufthansa. ey have not yet approved the 9 million euro bailout. they say takeoff and landing slots will hurt their position in the main german hub. they are still reviewing this deal. it is a surprise move they announced yesterday. to make matters worse, the belgian paper is reporting today that the ceo told staff he would have a difficult time paying june wages. this highlights how difficult the liquidity situation is for lufthansa. he also said that apparently he's had to go to switzerland, vienna, and brussels and beg for money. matt: soul of tons a a stop to watch today -- so, left anza -- ufthanza a stop to watch, also easyjet? dani: yes. more cost cuts coming from the air carrier. they will slash thousands of jobs, about 30% of the workforce. that amounts to 4500 jobs. that amounts to -- they will also take 51 fewer aircrafts this year than originally planned, but the airline still says it plans to resume normal flights by june. it also says it's winter orders are ahead of schedule, but we

dani burger has the latest. i can't get my head around a coffee in any kind of cafe right now. the story. dani: i know, this is the welding. it is a coffee chain and -- wild thing. it is a coffee chain and the demand is intense. the turnaround is four weeks. bankers are trying to speed up this process, hoping to list these companies now, taking advantage of the market,. we have seen ipo market and secondary offerings spring to life because they want to list now. bankers are getting cornerstone investors quickly. we are seeing volume in terms of dollars start to pick up. from the investors tried, they want to find companies that will weather this pandemic. we are seeing lots of offerings, both secondaries and ipo's. matt: very good stuff. an ipo we will look forward to. the market open is next. the futures are pointing lower. ♪ anna: one minutes ago until the start of cash equity trading. let's get your headlines. president trump will unveil new policies targeted at china after kongng passed the hong security law. the u.k. says it will open the path to citizenship for hong kong

dani burger joins us with the latest. >> one of the biggest gainers, at least set to be today, is wirecardade. the payment provider says it is going to be expanding its board, that is its management board, also appointing a chief science officer. we don't have the name yet. this is to ease some of the concerns around their accounting practices. shares tumbled over the past few weeks. finally, perhaps a rough day. organic sales slip 9%. this is a big hit because of automobile sales. however, the detergent unit making up some of those losses because of the stockpiling around the coronavirus pandemic. finally, telefonica getting a $4 billion syndicate loan to help with its merger of global media's virgin media. thank you for that. stocks you want to watch as the market open. we have just four and a half minutes to go. kickes pointing higher to off european stock indexes. the open is next. ♪ staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xfi pods to your home in a snap. or change yo

alix: dani burger has more. good morning. dani: one of the things boris johnson did yesterday was change the core of the u.k. messaging from stay home to stay alert. there was media backlash once that happened. some leaders concerned it would confuse the message. . but otherwise, johnson unveiling a traditional plan to reopen society when he addressed the nation yesterday. this first step of a few allows people in england to spend more times outdoors. that means if you want to play golf, play tennis, drive to a beach or park, you are allowed to do so. people who couldn't work from home are being encouraged to return to the work lays, people like construction workers, but said people should avoid public transit. in the months to come, we get the next phases in june. he says students will return to school. hospitality businesses, he said as soon as they could possibly reopen is july. that is one story. another huge story is europe is still the shock ruling from germany's constitutional judges last week, saying that the ecb may h

dani burger joins us with some analysis. let's get into food retailers first. what's the story? s the changing nature of how we shop now, ordering and groceries. there are seeing massive growth. not just that, but also stockpiling. porters are still at a high. according to analyst at morgan stanley, they say it's good that some of these are starting to normalize. overall, second quarter retail growth is over 40%. with itat is the story v? advertising sales just dropped through the floor. dani: right. total your advertising growth down 9%. of course, companies do not have as much cash on hand which means their marketing budgets have been thrashed. it is contending with that and because of that, they say they are not giving a forecast for this current quarter or for the entirety of the year. it is a double whammy for itv. also recall yesterday they said of theirdelaying one big ratings bonanza shows. it is especially going to hurt them in terms of ad spending for the rest of the year. also planning on making cuts and trying to cope with this thing, that they are going to cut about

joining to discuss is a reporter, dani burger. different stances on a common problem. what is the plan for europe? dani: goldman last week invited workers back to the frankfurt office. workers are not required to come in. that is a commonality we are seeing between banks. paris is set to open next week for goldman. for workers who return, life will not be normal. they are required to take a health survey before they come in. they have to wear masks coming in and out of the building. once in the building they have to observe social distancing, two meters apart. if you have a big conference per, that means one person conference room. don are the days of a big board meeting and a large conference room. of a bigre the days board meeting and a large conference room. matt: what is a meter? tell me what that is in feet. what measures are other banks taking? dani: we are going to see more banks starting to open up. a lot are using the same approach where you take a lot of percussion coming in as workers start to return. jp morgan think fo

that would mean nearly a decade of job gains have been wiped out .n just one single month dani burgers now to discuss. we have spoken about this with many guests, but we cannot say enough just how historic, i suppose, these numbers are going to be. we already saw the devastating jobs numbers yesterday and the high-frequency data, the initial jobless claims. what sort of full or picture are we likely to get? dani: we are likely to get a confirmation of what you said, the devastation we have seen in the jobless claims. the data set is certainly more comprehensive, so when we look through the details, we will likely get a picture of just how long the economic and unemployment devastation is likely to last and what the post-coronavirus workforce is likely to look at -- look like. we will get a better idea of what the industry looks like. we already have a slight idea not just the industry but the type of jobs and that might show us the wage gap is opening even more. i really figures are likely to confirm that those that are lowest paid are the ones that have been laid off. the number of t