Squawk Box Europe Express

Asian stocks rise on signs that relations between Washington and Beijing are warming after trade representatives from both countries agreed to stronger cooperation in implementing the first phase of the trade deal. U.S. non-farm payroll is expected to show that more than 20m jobs were lost last month. Siemens says it will hit the bottom in Q3 and see full-year revenue decline, after posting an 18 per cent drop in Q2 industrial profit. Uber sees shares spike in extended trade on news that bookings are up from April’s lows. CEO Dara Khosrowshahi assures the market that the ride-hailing app will be profitable in a matter of quarters.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A surprise recovery…Chinese exports unexpectedly rise in April with a sharp uptick in overseas shipments since December. However, lower domestic demand provides softer-than-expected import numbers. AB Inbev withdraws its full-year guidance after beer volumes fall nearly 10 per cent in Q1. The brewing giant says it has reopened all of its sites in China. Air France-KLM forecasts significantly negative operating earnings this year as its net loss widens to €1.8bn in the first quarter. Credit Suisse says it can’t predict the extent to which the Coronavirus outbreak will impact its financial goals, striking a more pessimistic note than its earnings release a few weeks ago. Meanwhile, Telefonica and Liberty Global reach a deal to create a new UK mobile and broadband behemoth, while Telefonica reports net profit halved in the first quarter.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Media giant Disney cancels its 2020 dividend payout after suffering a $1.4bn hit to income due to the Covid-19 outbreak. It has announced plans to reopen its Shanghai theme park from next week. BMW lowers its margin outlook, saying that the negative impact of the virus is lasting longer than expected with second-quarter data being worse than the first. Unicredit suffers a bigger loss than anticipated as it sees trading income fall and is forced to take a large writedown on loans. In Germany, state heads agree a draft reopening plan that would see all shops and restaurants resume trading but with provisions for fresh lockdowns if cases rise.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Crunch time for the ECB…Germany’s constitutional court is set to rule on whether the ECB’s sovereign bond-buying programme is appropriate in a decision that could hinder its QE measures. BNP Paribas' first-quarter profit falls by 33 per cent as market turmoil weighs on its trading unit. CFO Lars Machenil tells CNBC the economic outlook is difficult. WeWork founder Adam Neumann is suing Softbank for abandoning a $3bn tender offer that was part of the office-sharing firm’s rescue package.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese oil and airline stocks have dragged the Hang Seng down and U.S.-China tensions weighed on sentiment. U.S. officials reportedly believe China covered up the Coronavirus outbreak to hoard medical supplies. President Trump has blamed Beijing and warned that U.S. deaths could top 100,000.  Billionaire investor Warren Buffett has sold off all airline positions and warns of gloomy times ahead for the aviation sector. The FDA has granted Roche approval to carry out anti-body testing. The Swiss drug maker has vowed to double its production over the coming months.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

European Commission President Ursula Von Der Leyen tells CNBC exclusively that an investigation into the origins of Coronavirus is needed, with the cooperation of China. President Trump has threatened Beijing with fresh tariffs and says he has seen evidence that links the outbreak to a laboratory in Wuhan. The Dow Jones ends April on a high – its best monthly performance since 1987 – driven by gains in energy stocks, despite the recent historic sell-offs in oil. Amazon shares sink as founder Jeff Bezos warns the retail giant could post a loss in the second quarter after dedicating $4bn to virus response measures. Apple beats first-quarter expectations but shares dip in after-hours trading after CEO Tim Cook refuses to provide guidance amid the pandemic.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A global rally…The S&P 500 is set for its best month in nearly 50 years following positive news on a Gilead drug trial. U.S. Federal Reserve chairman Jerome Powell says the American economy has suffered “an extraordinary shock” in the wake of the Coronavirus pandemic. He has warned of a severe economy contraction in the second quarter and says the central bank will maintain low rates for as long as needed. Hopes of a quick recovery in China have been dashed as export numbers fell at the fastest pace since the financial crisis. In tech news, Microsoft sees shares soar in extended trade on increased cloud revenues through remote working. Plus, Facebook’s shares jump in after-hours trading as it says advertising revenues made a comeback in April. Its CFO David Wehner has told CNBC it remains cautious.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Standard Chartered warns of severe market dislocation as its credit impairments jump sharply. Shares rise in Hong Kong as its CFO, Andy Halford, says the signals coming from Asia are positive. Airbus posts a net loss in Q1 and provides no guidance, blaming limited visibility. The French aerospace giant says the virus has prevented it from delivering 60 aircraft. Alphabet’s shares rise in extended trade after saying the slowdown in advertising revenue is easing, beating more pessimistic forecasts. Plus, we speak to Rainer Seele, CEO of Austrian oil company OMV, as it reveals an 8 per cent drop in core earnings.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

HSBC’s first quarter profit slumps 48 per cent as it warns the Coronavirus crisis will have a material impact on capital and liquidity. CFO Ewen Stevenson, however, says it is starting to see some signs of recovery in China. Swiss lender UBS has posted a 40 per cent rise in Q1 net profit thanks to lower loan loss provisions and higher trade revenue. CEO Sergio Ermotti says its clients have remained active. Santander creates a €1.6bn reserve pot to mitigate the virus fallout after it sees Q1 profit nosedive by 82 per cent. And in Switzerland, industrial giant ABB warns the group will be significantly challenged by a sharp drop in demand due to the lockdowns.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Bank of Japan launches an unprecedented expansion of its quantitative easing programme, pledging unlimited bond buying. The stimulus increase moves Asian equities higher. Chinese industrial profits fall 35 per cent in March but recover from the steepest drop in a decade as almost a quarter of sectors see an increase in activity. Deutsche Bank surprises by posting a profit in Q1 but the German lender warns that it will miss its capital target due to the recession caused by the Coronavirus pandemic. In the UK, Prime Minister Boris Johnson returns to work to lay out a plan to lift the nationwide lockdown. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Germany commits…EU leaders have agreed on a huge rescue package to mitigate the economic damage wrought by the pandemic with Berlin set to provide a substantial contribution. A leaked WHO report shows disappointing results from trials of Gilead’s touted Coronavirus drug, Remdesivir. In the U.S., as 16 states release their formal re-opening plans following lockdowns, President Trump warns that social distancing measures may need to be extended into early summer or beyond. Tech giant Intel abandons its 2020 guidance, warning that a demand surge for microchips may yet turn into a slump. In the UK, retail sales fall by a record 5.1 per cent in March.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coronavirus casts a shadow over Q1 earnings…Credit Suisse reports a 75 per cent rise in first-quarter net profit amid exceptional levels of client activity. However, the Swiss lender has set aside CHF568m for potential loan losses. Daimler is warning of a 70 per cent drop in earnings due to a collapse in demand amid the Coronavirus pandemic. French hotel giant Accor says it expects April and May to be its toughest months as it waits for government guidance on lockdowns. The company posted a 17 per cent drop in Q1 revenues. In energy news, both Brent and WTI bounce back after falling to historic lows this week. U.S. prices have soared by as much as 40 per cent overnight with renewed tensions with Iran and optimism that production cuts will help ease oversupply bolstering the uptick.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Subscribers soar…streaming giant Netflix blows away expectations in the first quarter by signing up more than 15m new customers, thanks to strong demand for franchises like ‘Tiger King’ amid the global lockdown. But, the stock pares gains in after-hours trading after the company warns the pandemic-related boost is unlikely to last later in the year. Luxury giant Kering reports a 23 per cent fall in Gucci sales in the first quarter and cautions that it is too early to judge the recovery in the Chinese market following the Covid-19 outbreak. The plunge in oil prices accelerates with Brent bearing the brunt of the selling, also pushing U.S. and Asian stock markets lower. And in the U.S, the Senate passes a $500bn rescue package aimed at aiding small firms, hospitals and ramping up testing for Coronavirus.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A historic collapse…the price of a barrel of WTI for May turned negative, the first time ever levels have fallen below zero. U.S. President Trump has said he is considering blocking Saudi imports to build up state reserves and support the price of crude. President Trump has also moved to temporarily suspend all immigration into the U.S. to protect lives and jobs from the Coronavirus pandemic. In aviation news, the virus claims a major scalp as Virgin Australia goes into voluntary administration after failing to secure a government aid package. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Reopening Row…President Trump has played down accusations from U.S. governors who say they lack the Coronavirus testing equipment to re-open their states. The May WTI contract slumps to its lowest level since 1999 on fears the U.S. is approaching peak storage capacity. The ECB is reportedly considering a European bad bank to avoid subsequent NPL crises but it faces opposition from Brussels to stick to state aid rules. Around Europe there are signs of lockdowns easing, with Germany reopening parts of its economy. Spain is extending confinement but easing restrictions while the UK cabinet is reportedly showing signs of disagreement over an exit strategy.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China contracts…. The Chinese economy shrinks for the first time in nearly 30 years with Q1 GDP falling by 6.8 per cent as the Coronavirus outbreak weighs heavily on consumer spending and production. Retail sales in the mainland fall more than 15 per cent in March. U.S. futures, however, rise on the back of a positive report from a key drug trial, as Gilead Science says Covid-19 patients are recovering quickly after being treated with its Remdesivir medicine. President Trump publishes a three-point plan for re-opening the U.S., also pushing equities higher but U.S. bond yields fall for a third session running on the back of rising jobless claims. Luxury and cosmetics giants LVMH and L’Oréal are upbeat on a recovery in China despite both suffering falling sales amid global pandemic lockdowns in the first quarter. And car registrations in the EU plunge more than 50 per cent in March, with Italy the hardest-hit country.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://

Record retail rut…U.S. sales plunge almost 9 per cent while manufacturing hits a 74-year low, prompting recession fears. We speak to IMF managing director Kristalina Georgieva, who says economic pain could yet intensify should the Coronavirus return for a second global circuit and cause Asian growth to grind to a halt. In the UK, the government is expected to extend the national shutdown until early May. This comes after Berlin announces a similar extension but Chancellor Merkel unveils plans for a cautious re-opening of the economy, beginning with some small businesses next week. Volkswagen will be restarting production in its German and Slovakian factories with other global plants to follow shortly after. In tech news, Alphabet CEO Sundar Pichai tells employees the company isn’t immune to the global pandemic and outlines plans to freeze certain investments, namely hiring new personnel.    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/p

No more cash…President Trump withdraws U.S. funding of the World Health Organisation, slamming the agency for fundamental failures in tackling the global Coronavirus pandemic and for having a pro-Chinese agenda. In response, Germany’s foreign minister says strengthening the WHO is the best investment. The IMF warns of the worst downturn since the Great Depression, but its chief economist tells CNBC that the global economy remains in far better shape to weather the storm than it did in the 1930s. In corporate news, bad-loan provisioning has weighed heavily on profits at U.S. lenders JPMorgan and Wells Fargo. JPMorgan CEO Jamie Dimon believes the U.S. economy won’t fully reopen until the summer. Plus, a $25bn aid package is agreed to help the U.S. aviation sector after the Coronavirus outbreak cripples the travel industry.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China trade…March import and export figures fall by far less than expected despite the impact of the pandemic shutdown. U.S. bank stocks slumped Monday – their first negative session in five days – with investors eagerly awaiting to see the impact of Coronavirus ahead of their Q1 results. The death toll from the virus in the UK tops 11,000 and there are fears that the country could be the worst affected in Europe. However France, Spain and Germany have begun to gradually consider their exit strategies from lockdown.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Stocks end the week in the green, with the Dow and S&P 500 gaining more than 10 per cent during the period. The Dow crossed the 23,000-point mark late in the session following news that Democrat Presidential candidate Bernie Sanders has decided to drop out of the race clearing the way for Joe Biden. The latest FOMC minutes show Fed officials believe the U.S. economic outlook is ‘profoundly uncertain’ and plan to keep rates near zero until the Coronavirus impact is weathered. Crude prices jump on hopes of an Opec+ agreement on output cuts on Thursday. In corporate news, Disney is enjoying a jump of 50m subscribers to its streaming service as a direct effect of the outbreak while coffee giant Starbucks is warning it will see a 50 per cent slump in Q2 earnings. Across Europe, countries are bracing for lockdown extensions as health officials say the peak of the virus has not yet been reached.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-