Squawk Box Europe Express

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.  

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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. 

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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.

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