Transcripts For BLOOMBERG Bloomberg Markets European Open 20240714

The travel Company Folds under the weight of its debt, leaving tens of thousands of tourists stranded. Brexit goes stateside. Boris johnson takes his bid for a deal to the General Assembly in new york. Labor divisions threaten to undermine its Party Conference in brighton. Brent resumes gains on concerns over aramcos output. Irans foreign minister sounds a tough tone after a u. S. Troop deployment to saudi arabia. Im not confident we can avoid a war. We are confident we will not start one, but im confident that whoever starts one will not be the one who finishes it. Halfhour less than a hour to go until the european open. Im taking a look at a monthlong chart of oil. You can see the break away to the upside when those aramco facilities were attacked. We then recovered to some extent, but we are coming back up in terms of the group rice. Those tensions are building backup. Take a look at what we are expecting in terms of the cash equities open. We have the ftse, cac, and dax futures. Futuresooking at dax looked to be pointing up. Im not sure how dax futures are trading right now. I might take that with a grain of salt. Cac futures are down. Ftse futures are up to some extent. Those are indeed a live cash trade. Im not sure if that dax future is a live cash trade. Mark cranfield in singapore. The markets in japan are streamg a wrench into my here. Overall we saw asian equities down even though we saw the u. S. Government assure us that the cancellation of the chinese farmland tours was at its request and the chinese say talks are constructed. Whats going on . People are more concerned donald trump is not ready to have a partial deal with china. Also, the increase in oil prices. Its going to take saudi aramco a bit longer than expected to get full oil back online. That is slightly disappointing. More trouble in hong kong over the weekend. A week to go until this Major Chinese holiday. We could get another round of protests just ahead of october the first holiday break. That is pretty important as well. Datawe have china pmi coming out in a weeks time. But we saw today was korean export numbers which are pretty horrible, even allowing for a slightly distorted period with a korean holiday. Really simply very bad numbers. That does not bode well for the next bunch of data out of china. A few things which have been coming together here, plus pboc fixing was higherthanexpected. Put those together, there is probably more negatives to look at than positives. You have a slightly weaker market in china in particular. More negatives than positives. Where does that leave the dollar . We heard from Eric Rosengren saying he thought fed policy was already accommodative, denying any need for further cuts. He rebelled last time. What is your latest thinking on the dollar . If you look at it from the point of view, the fed speakers are going to be important. Some people might be saying, the fed have already moved a few times. There is pricing to suggest another rate cut as well. Going to getlar is support here. Reallywant to be negative on the dollar based on interest rates. There probably would have done so already. Leaders at the major the United Nations to discuss climate. There is certainly room for people to come to disagreements here. So many people in the room at the same time. That could also unnerve markets. You have the chinese holidays coming up. Theres a number of small things coming together here with my support the dollar on the basis that it is the biggest, most liquid currency. It has a bit of a yield. Nothing huge. Probably a slight bias towards Dollar Strength this week. Matt it does not look like there is a rush to safety in the dollar right now. That ties in nicely to the mliv question of the day. Our markets mispricing geopolitical risks . What have you been hearing from clients . There is a touch of complacency. If you look around, particularly when you look at performance overall, not too bad. Gold has lost some of its gains. The treasury market, most of the yields have gone up. Look at the way assets have performed the last few weeks. We have moved well away from the point where we were using havens at their extreme levels. Pricing hashat changed. If you look at the rhetoric coming out, we just heard the iranian leader on the news there. It certainly does not sound as though he is ready to have friendly discussions with the united states. Theres plenty of other hotspots as well. Until the beginning of october when the chinese delegation goes to washington, we might see improvement then, but there is plenty of room for misjudgment between that time. When china go on holiday, we have a bit of a news vacuum, at least on the chinese side, which will probably be fueled by what we hear out of the united states. A lot of that has not been very constructive recently. There is room over the next couple weeks for markets to get a little bit anxious about what is going on in the world. The easiest thing for them to do would be treasuries, gold, that sort of thing. Matt thanks very much. Anna mark, think spree much for joining us. Barry much for joining us. Reach out to was in the markets life team. Markets live team. Im here at the labour party annual conference, off to a rough start. Jeremy corbyn is struggling to keep his Party Together. Senior members demand an unambiguous brexit stance. Joining me now is the director general of the british chambers of commerce. Good morning to you. Many businesses quite like an unambiguous start. What do you make of the most recent suggestion from Jeremy Corbyn that the policy is neither leave nor remain at the moment . It is all about getting a Labour Party Brexit deal negotiated with brussels. For businesses, this is all about getting an outcome. The process has been going on for three and a half years. We have seen twists and turns from all the main Political Parties. Businesses need clarity. They need certainty over what is coming. They need to know some basic things about the trading conditions. I think they want all the Political Parties to come together and deliver that. The last vote, you were neither leave nor remain. You were all about the actual outcome for business. If we see another vote, will you have the same stance . We are facinghat is the potential for a disorderly exit on the 31st of october. That is just weeks away. Businesses are sending goods around the world and dont know what trading conditions goods will arrive at port under. We have to get to a conclusion on this. We really dont want to see a messianic disorderly conclusion. Aat is that is what disorderly messy and conclusion. Anna you have measured brexit and no deal. You found out out of 36 areas, 10 are flashing red on your dashboard. One of the gaps when we prepare for the potential for no deal . Firms look at the advice governments are publishing. There is lots and lots coming out. They say, is this clear . Is it specific . Is it actionable . In a lot of areas, that is simply not there. Take for example if you are trading across the border between Northern Ireland and the republic of ireland, there is still no clarity in fall businesses on what would happen in the event of a no deal brexit. The two sides are not putting their positions forward on that in the midst of negotiations. It extends to other things. What staff can you hire . What Regulatory Approvals do you need . These are basic, everyday business questions. They dont have enough information. s government still listening to the bcc . What is left to be said . They are certainly listening. We have had constructive conversations with the opposition here. Oppositionment and are listening to us. Theyre listening to business. They are hearing the real world concerns. The problem is, they have got that outcome they have got to know the outcome. Anna we talked about the branch withn olive business. Did you feel welcome at this years conference . Are big concerns still out there for businesses about some of the partys policy platforms. Some of the things that are voted on in this Conference Center that have to do with business, in terms of nationalization of particular businesses, concerns about unprecedented levels of intervention in individual firms and the way they operate. These are things we are having a constructive conversation with labor leadership on. That conversation has got to continue. At the end of the day, there are points of agreement as well. If you talk about training the workforce, if you talk about fixing infrastructure where we deficits, there are points of agreement. We have got to build on those, but also get to a point where business feels more comfortable than they do today. Anna there are some areas you do agree on. With the news flow in mind, i wanted to ask. Thomas cook. Boris johnson has said to do more would be to create havoc. Can business expect more . s business resigned to this kind of outcome . In every period there are businesses that rise and businesses that fall. It is part of the business cycle. The most important thing is you get economic stability and political stability that firms need. You will see more firms in difficult situations able to navigate through. What we dont want to see is a continued level of uncertainty, continued messy situation. That is when there is more business failure. Anna thanks for joining us today. Up next, ipo mania. ,ompanies set to list this week but after highprofile flaps and poor performances, how will they get on the . More on that ipo frenzy shortly. The annual Bloomberg Business forum in new york. We will hear from the likes of jamie dimon, and christine lagarde. All of that in new york. The u. S. The uns General Assembly also meeting. This is bloomberg. Matt welcome back to the european open. I want to bring your breaking on Deutsche Bank. We have been talking about the fact Deutsche Bank is going to transfer its prime brokerage unit to bnp paribas. 1000ll with that transfer staff. There will be 1000 employees. Deutsche bank is expected to close the deal by the end of this year. 1000 staff, according to staff, will be going with them. Anna another reason to keep an eye on Deutsche Bank before we get to the start of trade. Lets talk about what is to come this week. These are the things we should be watching. Continues inrty brighton, where i am this morning. We will be watching for any shift in brexit policy. Programon the economic finishes wednesday. The uns General Assembly kicks off tomorrow. World leaders are gathering in new york to discuss everything from Climate Change to geopolitics. In particular focus, the trade war and fallout from the attack on saudi aramco. Matt bloomberg hosts the global Business Forum on wednesday. Speakers include christine lagarde, mark carney, and prime ministers modi and arden. Plus, the new Italian Government will unveil an Economic Program by friday. Prime minister Giuseppe Conte has a tough challenge. Lets get now to the bloomberg first word news. For that, we go to selina wang. Thomas cook has filed for administration the travel company failed to raise additional funding, collapsing under a mountain of debt. All thomas cook flights and vacations have been canceled. The government will now work to bring holidaymakers back home, calling it the longest repatriation in peacetime history. As doubtsthe raise remained over how quickly saudi arabia can restore its lost output. The wall street journal is reporting that for repairs to the oil fields may take many months. It says officials are privately in emergency talks and costs could stretch to hundreds of millions of dollars. Police and protesters lashed again in hong kong this sunday. Violence erupted in several parts of the city as unrest continued for a 16th week. Bracingg is breaking for a surge in demonstrations. Next week is the 70th anniversary of the founding of the peoples republic of china. Global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Selina wang in beijing with your first word news. Areturn to Public Markets as string of companies are set to price offerings and debut shares, but after highprofile flaps and poor performances, how will these Companies Fair . Belets kick it off with a in bev. It is set to price monday in hong kong. The company is seeking to raise 4. 8 billion dollars. This would make it the secondbiggest ipo of 2019. The is roughly half of what bloomberg targeted earlier this year before relaunching. Lets stick with hong kong. Wednesday, a Biotech Company makes its public debut. Both of these are really going to test inventor sentiment. They are the first listings in hong kong since july. Aemier is planning to list German Software company. Team viewer. Its going to be one of the biggest in europe this year, expected to raise between 1. 4 and 2. 3 billion euros, listing again this week. In the u. S. , the home fitness is planning to list wednesday. Already, there is skepticism on wall street. Investors are decidedly mixed according to a survey from orenstein on more than 40 potential buyers. No stranger to skepticism, we have to mention wework, whose listing planes have been derailed. The working company has delayed its ipo. We have doubts about valuation, about governments governance. It may be postponed until december. It has been a tough environment for new listings. It has been very difficult to see how these fair. We work certainly interesting on a number of levels. Morning theen proliferation of coworking spaces could pose new risks to financial stability. We are minutes away from the open. We are going to look at your stocks to watch, including thomas cook. Matt we are five minutes away from the start of trading. Stocks to watch from around the , focusingcovering tui on Deutsche Bank. What can we expect on tui . Collapse,homas cooks tui premarket indicators are strongly up. Expecting ae, it is one time charge for helping rearrange travel for stranded thomas cook customers. Also, another bit of fallout from the thomas cook collapse europeshe stoxx of smaller and weaker airlines. Matt thanks very much. What if you got on Deutsche Bank . Completing the transfer of its prime brokerage unit to bnp. This was announced in july, so some of it might have been priced in. They are set to transfer 1000 staff members. Matt thanks very much. You can get all your latest stock stories from our Equities Team by typing first go on the bloomberg terminal. You can get it from your mobile app as well. We are expecting a mixed market open this morning. The stock market open on the other side of this break. Matt a minute away from the open of cash Equities Trading across europe and the u. K. Lets take a look at what the markets are doing. We go to Annmarie Hordern in london. Annmarie good morning. Asian equities kicked off the week to the downside, msci asiapacific down under 1 10 of a percent. Csi 300 dropped more than 1 this morning. S p futures in the u. S. Are higher this morning. Trade is back and focus. Richard jones says the bar is high for an agreement. It will be difficult to get a powerful rally in equities. On the british pound, trading around one spot against the u. S. Dollar. This is as the labour party kicks off their conference in brighton. Brent crude up about 1 . Heres how futures are ahead of the open. A bit of a mixed fixture picture. Euro stoxx 50 lower, and keck futures lower in france, down nearly 2 10 of a percent. Its now gone just 8 00 in the city of london. Lets look at how the markets are Opening Monday morning. Ftse 100 opening up flat, but a bit of an eke to the greenside. We see in Foreign Exchange the british pound and they are at the labour Party Conference. We have the euro stock 60 opening to the downside and spains ibex opening to the downside. In europe, mario draghi speaking this week, not just about trade. We have pmi for france in 15 minutes, germany at 8 30, and eurozone at 9 00. We are seeing a bit of red across markets. Germany opening up three per 3 10 of a percent lower. Quickly scanning the grid, i see financials in the red, as well as industrials. Interested to see how gas does. Ended the week having the best week in more than a year as brent crude rallied from 7 last week. Geopolitical risk, questions about when the kingdom will produce the last output arise. Also in consumer discretionarys, this is where leader stocks it, what kind of hit thomas cooks will have on that. Were seeing a lot of red across the sector picture. Health care firmly in the green. What leasing across individual movers . Matt i see health care doing quite well. Look at the stoxx 600 here. Weve got 362 stocks down, only 200 up. Winnersmore losers than right now, basically 74. Astrazeneca, nora nordisk, novartis, diageo all could be considered health care stocks, rising this morning, adding points, keeping the stoxx 600 back from bigger losses. You do see, on the downside, sap fulling pulling the stoxx 600 down. Some of the tech stocks down this morning, as well as some of the luxury stocks. Louis vuitton and caring are both on the downside here among the biggest drags on the stoxx 600. We also see glencore down this morning, fickle bilbao, a lot banco finkel Bilbao Bilbao down. The ftse is getting slightly as investors monitor latest elements entry talks latest trade talks. You, howart by asking do you think the trade talks are kicking off to start the week . Well, some noise a bit earlier about cancellation of visits on farms, but it seems like that was part of the scheduling. And so, so far so good. Both sides have made good gestures to create a right environment. A massiveexpecting grand bergen here. But so far, so good in terms of getting some agreement not to escalate things further. Thats all the market needs at this point. Talks andtructive canceled farm visits. We plough on. Let me ask you about fed part to see fed policy. What are you expecting from the fed . Weve had a little time to reflect on the meeting and press conference. Eric says he disagrees with the market that the economy needs a rate cut to continue expansion. What are your thoughts . Hani i think its clear now, theres some Division Within the fed. The centers are being quite vocal. But the Center Ground seems to be on track to doom one more cut this year, perhaps another one next year as well. As an insurance policy. In this midcycle adjustment, although powell didnt use those words, with think that is still the central approach year. And that is going to be sufficient, we feel, to keep to put growth back on the right footing. And were already seeing very good signs that the parts of the economy that are most industry sensitive are really starting to show signs of life, particularly in housing. Aboutare you concerned the repo crisis we watched last week . It seemed the fed has been able to get rates back down to normal, or close to normal. The cut onk they excess reserves interest rates, interest on excess reserves ill get it out here or intervention into the markets, was sufficient to solve the problem . Hani look, we may need one or two more injections of liquidity on that front, but i think whats clear now, to us at least, were likely to see the fed resume purchases on the asset side to relieve this liquidity pressure. And thats also another positive for the market. It actually means weve got the ecb resuming its Balance Sheet ion, and the fed will be doing that, as well. So the backdrop is now very supportive for growth going forward, and were coming to the end of this slowdown, very concentrated in the manufacturing parts of the economy. And that puts us in a good position to see resumption of growth going into the end of the year and into early next year. Conditionsinancial accomodo. , save ative. Were heading to the u. N. General assembly in new york, were plenty of geopolitics will be on display. Do you think markets are underpricing the risks here . Hani well, i think the market where we revealed there was a mispricing of geopolitical risk was the oil market. Obviously, after the events of last week. So were likely to see upward bias pressure to oil prices, even if saudi arabia manages to bring Production Capacity fully back on, as expected, by the end of this month or next month. But that vulnerability in the Global Supply for oil has now been revealed, and is likely to introduce a risk premium into oil prices that has not been there for quite some time now. Thats really the market where we say geopolitical risk is underpriced. The other one is clearly u. S. China, and that really is the wildcard, very difficult to predict what will happen on that front. But even there, we would say theres a risk things breakdown. But at the same time, the window to the u. S. Election and the window in which President Trump would look to actually cool things off and create a positive tailwind for growth is narrowing. So its less and less likely, as time goes by, youll see further escalation. Anna thanks very much, hani. He stays with us on the program. Up next, closing up. The 178yearold travel Company Files for bankruptcy as it fails to secure lastminute additional funding. What does this mean for other travel businesses . Well get the low down next. This is bloomberg. Matt welcome back to the european open we are 11 minutes into the trading day. The ftse is getting too tense of 1 , but other indexes are down 2 10 of 1 , but other indexes are down. Ive got the screen up on the bloomberg terminal set of monday. Travel and leisure stocks are getting today. Gaining today. Theyre the biggest gaining group, perhaps because they can pick up market share on the bankruptcy. Utility and food and beverage stocks are gainers, as well as health care. Everything else is down. Tech,resources, banks, and automakers the biggest losers on the day. Thomas cook one of the biggest market movers, filing for administration, leaving tourists stranded abroad. They failed to complete a lastminute deal for additional funding, collapsing under a mountain of debt. Paul thomas cook flights and vacations have been canceled. The British Government will bring holidaymakers back, calling it the largest repatriation in peacetime history. Joining us. Fail,d the bailout talks first off . For some tourism, they offered a 1. 4 billion payoff deal and last week, unfortunately, thomas cook said they would need to do 50 250on of extra funding million of extra funding. Theres economic concern and they might have thought they are paying way too much and would get a lower return for a big investment. Anna good morning. We heard the government isnt going to step in. Other companies affected by this, not necessarily negatively. Some Companies Responding positive to this news of thomas cook. Ksenia thats right. Its amazing, as you say, european travel stocks are the biggest gaining sectors this morning. I agree with matt its probably on the fact they will win market share from thomas cook because it was a giant presence in the industry. Were also looking on the beach, where they would get a oneoff cost related to thomas cooks collapse to evacuate. Some other companies were watching are rbs and lloyd, because they are big creditors to the company. This is a major part of the revenue. They wont get a huge hit. At the same time, something to watch as brexit continues and more of these midsize to Small Size Companies will have issues. Matt is brexit one of those macro reasons that led to this collapse . What are they key Macro Economic reasons that led to the thomas cook collapse . Ksenia youre right. Brexit is a factor, but its not the main one. The main one is the online cap edition from competition from online resources, like expedia, that most of us use. Not many people go to travel agencies to buy their holidays anymore. Online retail and Economic Uncertainty played a big role, and a big speculation about bankruptcy prevent people from going to thomas cook in the first place. Anna thank you for the update. European stocks reporter is any a glushko giving us the report. Boris johnson is taking his bid for a brokerdeal to new york. He will meet with key eu leaders on the sideline of the u. N. General assembly. He told reporters not to expect a major breakthrough. Try to manage expectations. Hani is still with us. Your thoughts on u. K. Assets as we creep closer to october 31. A lot of talk about what might happen when Parliament Comes back in the middle october, or, who knows, before then . Do you still clear at the moment . Steer clear at the moment . Hani we are. We are short sterling for quite some time, but we square that out. We think the downside scenario now is a little more balanced with upside because there is still a chance we see some movement as weve been seeing on the irish backstop issue and some sort of solution on that front. Still a lower probability, but sterling priced in theres a chance of that happening. And then theres also an extreme probability, low probability of a forced exit on the 31st of october. More likely scenario now is we get a delay and a general election. Thats still the central scenario, which means were still in limbo and it delays the entry point for u. K. Assets for us. We think there will actually be interestingk an buying opportunity for assets. Were not there yet. Matt were getting french pmi numbers out there right now, falling to 51. 6. The forecast was 53. 2. Pretty poor number, though still an expansion. Let me ask you about stocks. If i look at my screen here, i can see the cac around up near 20 date to date. Thats more than the stocks, the s p 500. Stocks,ou think french european stocks are doing so well . The dac and the ftse mib are also up. Why are european stocks doing so well, especially when u. K. Stocks have done so poorly . Relative. Absolutely. Obviouslythe u. K. Is suffering from brexit. Its less of an issue for europe. Thats the relative to the u. K. Within europe, youre right, the cac has outperformed, and theres a couple of factors and that. One behind that. One is that its much less sensitive to the Global Manufacturing cycle, compared to, for example, germany and the dax. That has been less of it drag less of a drag for france. That explains why pmis have been fairly robust compared to the rest of europe. Thats one factor. Another factor, a slower moving but very positive factor, is that the reforms that president macron has been pushing through, are actually starting to bear fruit. And were seeing it through lower unit labor costs in france, as opposed to Rising Labor Costs in germany, for example. That has helped to restore some of frances competitiveness versus its global peers. And thats part of the reason why we think the data coming out of france has been more robust than others. Its definitely also because of the less cyclical exposure to the part of the Global Economy weakhave been recently recently. Hani, were going to keep you with us. Thomas cook revels surge after the Company Files for bankruptcy. This is bloomberg. Matt welcome back to bloomberg markets. This is the European Market 22 minutes into the trading day. Stocks,at a drop in with the exception of the ftse. Please add to Annmarie Hordern. Annmarie thomas cooks pain is the gain for its rival. Both are searching on this news. Thomas cook collapse after failed talks with creditors. Thats giving wafer rivals to have giving way for the rivals. The Real Estate Company in germany is buying a massive stake, really taking control of this swedish property developer. Matt, anna . Anna thanks very much. Boris johnson added heft behind the claims iran was on the strikes behind the strikes on saudi aramco. Iran is refusing to rule out a war in the middle east after the u. S. Sends additional nilla terry aid to saudi arabia military aid to saudi arabia. Aboutot optimistic avoiding a conflict. Wont not confident we avoid a war. Were confident we wont start one. Whoever starts one will finish it. Fast tensions grew and how saudi arabia will restore output. A Portfolio Manager is still with us. We talked about how geopolitical risk is underpricing oil markets. Do we need to add an extra layer of risk premium into oil prices as a result of seeing the vulnerability of the saudi installation . Hani i think some of that has started to happen and theres potential for oil prices to drift a little higher as a result of that. But we dont think theres a conflict ahead. At this stage, it doesnt seem eitherere is appetite on side to escalate anything through direct confrontation. Need to price anything that severe at this point, but vulnerabilities revealed are not going away. Were starting to get a sense of how much damage could be done if this broadened to targeting of uae infrastructure, as well. That risk premium does need to come in. We think the market has come some ways to doing that already. So, 65 for brent looks good, in your opinion . Priced correctly . Hani there is risk premium and then theres the supply and demand backdrop. Weve been expecting to see continued rampup of production from the u. S. , for example, to the shale play, as Midstream Energy firms that have been investing growing that capacity online. Those drills and uncompleted wells starting to get connected to the global market. Some of those factors will act blipfsets to the incapacity thats been lost in saudi arabia. Overall, when you factor in both supply, demand, as well as risk premium that needs to come in, we think oil prices are still going to be fairly range bound. Biasith the potential toward a little higher in the mediumterm. In the intermediate term, they go higher. What about the raw longterm price of oil . I was reading about betting on 100 oil. We havent been there since 2014. Hs we had back in that direction . Hani for now, we dont think so, unless theres a wildcard of further attacks that really exacerbates things. But absent of that, it seems quite clear that there is the ability for the market to provide the additional supply. The marginal producer is u. S. Shale and higher prices does incentivize that additional capacity to come online. It puts a cap on prices. Unlikely to stay at 100, even if we get there. Matt thanks very much for joining us, hani. Coming up, the biggest names in business and government are gathered at the annual bloomberg mobile Business Forum in new york. Well hear from them. Matt 30 minutes into the trading day, your top headlines. Thomas cook fold under the weight of its debt, leaving tens of thousands of tourists stranded. Watch other travel bookers at the open. Brexit go stateside. Boris johnson takes his bid for a deal to the uns General Assembly in new york. Threatens tobours undermine its conference. And Deutsche Bank complete this deal to transfer thousand staff to bnp paribas, the biggest overhaul in the companys history, a story we will continue to cover for you. Welcome to bloomberg markets. This is the european open. I matt miller in berlin, im matt miller in berlin, alongside anna edwards, was at the conference in london. Anna at the labour Party Conference trying to work out what the Opposition Party thinks about brexit. You might think thats an easy question to answer, three and a bit years after brexit in 2016. Is not a clear remain or leave stance we get from the labour party. Jeremy corbyn put forth his stance, and he once the party to go with him. He wants a general election and once labour to go to brussels to negotiate their version of a labor deal. And other areas. Thats what they want to do. They want to put that to the people in another referendum. Thats the stance. Were trying to gauge where the fault lines lie in the party on that front, and get to some of the other breaking news around labour party policy. Matt has got other breaking news right now. Matt got some breaking news here on german pmis. Im looking at the buns. You can see the yields dropping, as you also take a look at my bunds chart here, 55 basis points, a threeday charge, this down that you can see as we get these headlines. A big miss for german september manufacturing pmis. The number we got was 41. 4. We were looking for 44 even. The prior month was 43. 5. That was disappointing enough. And now it is worse. So, manufacturing pmis, big disappointment. The services pmi also a miss, but at least still an expansion, 52. 5. And the come is 39. 1. You can bet investors are focusing on those numbers. Yield comes down further on the german bunds. Lets get to bloomberg first word news with beijing and selina wang. Selina Deutsche Bank is transferring its business to bmp. The german lender will manage the platform until climate clients have been migrated over. Prime broker to hedge funds. They lend them cash, securities, and execute their traits. Thomas cook has filed for administration, leaving tens of thousands of tourists stranded. The 178yearold travel company failed to raise additional funding, collapsing under a mountain of debt. All thomas cook flights and vacations have been canceled. The government will look to bring holidaymakers back home, calling it the largest repatriation and postwar history. In chinas cancellation of a visit to an american farm, apparently done at the request of the u. S. This indicates it wasnt caused by deterioration in trade talks. We learned chinese vice premier learns to visit for highlevel talks in the second week of october. President trump appearing to acknowledge he discussed with percent joe biden with ukraines president. That call is a subject of congressional investigation. The president said its about corruption, but he asked the new president to investigate the son of the president ial hopeful. Global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Much,thank you very selina wang in beijing. The conference has been getting underway over the weekend. Things have gotten to a rocky start, Jeremy Corbyn struggling to keep his Party Together. Some demanding a less ambiguous start our men it. Things getting around brexit. Things getting busier here. Im joined by the u. K. Shallow chancellor. Shadow chancellor. He said the u. K. Could remain. Does that strain your relationship with Jeremy Corbyn . Process inink the which we can bring the Party Together is a logical sequence, about lecture related government, then seeing what deal is available at the time, and then putting it back to the people, both in terms of a sensible deal, and what he says in terms of the party, we can take that decision once we know what the deal is. I cant see we can get a better deal than remain. Anna but that could mean youre arguing for something difficult from john mcdonnell. The leader of united said anybody on the front bench of the labor party, if they dont agree with corbin, they can sit down. Guest thats a classic statement. I will take it with a pinch of salt. The issue is, how do we bring the Party Together . Its allowing people to have that logical sequence of seeing what the alternatives are, definitively, and giving people that choice. In that way, the way in which Jeremy Corbyn is managing it, is i think the only way we can heal divisions in our community. Whatever is the outcome of that final referendum, there is healing from it. Anna he sees a remain campaign as the quickest path to power. Would you agree . Guest theres issues beyond party advantage. Were talking about national interests. Im one of the key elements is whatever path we take is the best path, and the country the path that brings the country back together. Thats why jeremy its his style. Is a consensus builder. Which oness is one in we can build against. Anna there are limits on what parliament can achieve. Parliament returns, what will the plan be . We hope to guest see what this appearing Court Decision is the supreme Court Decision is tomorrow. Parliament to reconvene immediately because we want to start discussing the reportaround the other that demonstrates how disastrous well work with other opposition parties. Well see whether or not Boris Johnson abides by the law, as it now stands, he goes to the European Union and negotiates a deal, applies for an extension, well see whether or not he does that. Well also see what deal he brings back, if any. Well plan our strategy on a daily basis. Anna covering thomas cook this morning the collapse of that business, what would you be doing if you were in government right now . Guest thomas cook used to be public ownership. It was privatized. What i said when this crisis emerged, i wanted the government to intervene, give what guarantees were necessary to see what options were available. Where, likege now with steel, i argued they should have intervened early. Give us breathing space. They refused initially. Eventually, they intervened and we looked to other options. Thats what we need to do here. Anna some of your plans involve water companies. We heard the legislation is ready. What is the compensation paid to the current owners of those businesses . Guest it will be determined by parliament and based on a range of factors. Anna anything you can let us in on . Guest parliament will let us know. The key issue is to make sure theres a demented crack arise c issue democratic decision that arises. Anna you called for britain to pay reparations to the global south to emerging markets. Because of our role in the industrial revolution. What kind of impact do you see that happen . Guest we convened a form where we divide invited representatives from global movements. What that discussion said, we had to accept we were the First Industrial revolution, the first contributors to Climate Change, ever colonial past, as well. We had response believed to work with them to tackle Climate Change and together. It affects us all. We were looking at the transfer of technology, thats what people were interested in, technology about alternative energy and how we address the other columns Climate Change is impacting upon. The transfer technology is one of the key elements. Anna how do you respond to the allegations this would be a dumbing down or leveling down the Education Sector rather than pulling state schools of to meet to better try to meet the standards of private schools . Guest is a misinterpretation. Were developing an education service. We went to ensure the private schools that exist are integrated into the service so everybody gets the best opportunity. It will be a leveling up rather than leveling down. But we cant go on with a society that is so grotesquely unequal. As starts with an education system. It isnt the debate in this country. As happening across europe at the moment. How do we tackle the levels of inequality . Anna and past conferences, i spoke to the chamber of commerce. Sometimes theyve had to respond to labour party speeches or policy, the feeling toward business has not been friendly. Opportunities were missed to reach out and olive branch. How well can businesses at the labour Party Conference. Is it changing . Guest the chamber, along with the cbi, institute of directors, meet us on a quarterly basis now. What weve put to them, you tell us how you want to come into government, with a few tasks of structures. And weve had a cooperative, a constructive relationship. Rebeccaorbyn and i, and meet on a regular basis and are looking at how we develop plans. Youll see in the discussions this week, for example with the automotive industry, the development of the plan based on that dialogue from those companies. Anna will we see more cameras and less estate . Guest youll see a combination of investment that were all on the same page, as well as how we ensure we Work Together and setting up the structures to Work Together. Anna thank you very much. John joining us, where things are getting busy around us. Up next, we bring you stock movers around us. Slumping after a for your loss that almost doubled last year. This is bloomberg. Matt welcome back to the european open. We are 45 minutes into the trading day, 15 minutes away from the top of the hour, and looking at losses, with the exception of the ftse across European Equity indexes. Bloomberg learned adam knowing on is in the crosshairs of we work. Could be newman. If youre american, its probably newman. But here in germany, probably newman. He is head of we work and some directors want the ceo to step down. Also adds the support of the biggest investor, softbanks masayoshi san. They delayed its ipo until october at the earliest. Joining us from the deals team is sarah syed. This is a fascinating story, and its been gripping attention of wall street for many reasons, but mainly because they dont like the governance in place at this company. Sarah there is a lot of pressure on the guy himself. Whoever is in power at the business holds a lot of weight when it comes to transactions like this. He has a charismatic personality and i think the personality fits squarely with unicorn capitalism. You have these businesses that are very attractive, have massive growth potentials. Behind the, you have a carrot behind them, you have a charismatic leader. This is a pure example of his personality dividing investors. Matt seems like investors left him until two weeks ago, and now hes the most despised person on wall street since martin shkreli. Sarah hes certainly in a difficult position at the moment. There was a pumped up valuation on the ipo, about 60 billion that has been stressed slashed dramatically. Matt if that. One ofif that, exactly, wall streets biggest players said the same. Where do you get a valuation like that . He placed the valuation squarely below 15 billion. But we work is under a lot of pressure. They have until the end of the year to do this ipo. They have a crucial 6 billion loan that they need. And in order to do the ipo, they need to do it by the end of their. Matt has all this of the year. Matt has all this negative attention affected ipos . Sarah not in germany. I mean, i know on the grand scheme of things, it doesnt seem so exciting in the global sphere. But its a german business. Matt we can explain what team viewer is. I spent time on the website trying to figure out. I still dont know. Sarah i always get very confused because i want to know what the problem is. But lets call it an i. T. Business, which has done very, very successfully in germany. And in germany matt is it like a select . Internal communications . Sarah in germany, over questions. No, it is a successful business and is the biggest ipo in two decades in germany, very attractive tech ip business, and this exciting its exciting to see where it goes. Its suffering, but i dont think its the markets. I think its the personality behind it. Neummann not contagious to others. If youre a terminal subscriber, check out the latest m a news. Just hit m a go on your keyboard. Lets get the top stocks for with with Annmarie Hordern in london. Annmarie constituents in berlin would want to hear about Deutsche Bank, down more than 3 , as they completed the deal for their brokerage visit. The transfer to b. N. P. Paribas the biggest restructuring in recent history, about 1000 of those staff will have to go to the french bank in the coming years. Partial or mattel on the downside, downgraded auto, but also the basic resources, the minors are losing today on the stoxx 600, sector down more than 155 as investors wait for concrete ash down more than 1. 5 as investors wait for concrete developments. Juventus is down more than 7 as they reported a for your loss of 40 million euros, double of last year. That number has to do with the wages they pay to players. They have cristiano ronaldo. They pay big bucks for him. Since he joined the club, the stock is up 100 . Matt marie, thanks very much. Anna all the business and sports news you need to know about. More on the markets coming up next, marcus live with richard jones. Our markets repricing geopolitical risk . We also talked about dreadful data out of the eurozone just this morning. More on that next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open, 53 minutes into the trading day, red arrows every day everywhere. A big drop in the dax. The reason for that is the huge disappointment in manufacturing pmi. Weve had bad pmi readings from germany from European Countries before, but this is, i think, a new level of disappointment. For that, for more on that, lets literature jones on our mliv team in berlin. Richard, we were looking at a 44 even. We got 41. 4. It was lower than the previous month, which was 43 and change. Why are german pmis continuing to slump . Richard they make for grim reading. The thing thats worrying about september, the flash readings, is that services is no longer bailing out the german economy. The reading is now below 50. I think for the past three months, we know manufacturing has been weak, but services has been buoyant. The fact its below 50 because manufacturing is so weak and filtering into services is a big worry and something to watch closely because markets are reacting. This was a surprise, even though the data has been bad for a while. Matt anna . Anna well keep an eye on that weak data then, richard. Its influencing market activity. There are dangers in trading the headlines around trade. But we can of food avoid the mood music. You can hear about constructive talks and conversations and cancellations of farm visits. Where does that leave you . Richard i think is very difficult for the market to actually have a single take on whats going on because as you say, it does short of sort of shift all the time. If he thing about what kicked off the trade tensions, it was a tweet on sunday night in may. As a result, investors have to be reactive and its hard to get a handle on where these talks are. Same as geopolitics in general. Its hard for investors to price. Thats why we see volatility. Matt you bring up geopolitics, the mliv question of the day. Our markets repricing geopolitical risk . Richard i think its important impossible for marcus to price geopolitical risk because it comes out of the blue, its not predictable, and never the same way twice. Markets cant be proactive. They have to be reactive because its not something to get their hands on. Anna thanks for your time, richard jones, our strategist joining us in berlin. Im live at the labour Party Conference, things getting busy in the background behind me. During this week, well be looking across the atlantic to new york. Coming up, the biggest names will gather for the Bloomberg Global Business Forum in new york. Well be hearing from the biggest nine names. All of those and many more will be on the program. Matt were going to continue to keep an eye on european equities, falling further and harder than they were than the open. An hour into the trade, looking at the dax down over 1 and the ftse reversing gains to losses. Thats it for the european open. Surveillance is up next. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Francine thomas cook collapses. The writ is government promises the British Government promises the biggest repatriation. Boris johnson meets merkel, akron on the sideline of the yuan General Assembly of the u. N. General assembly. Welcome to bloomberg surveillance. I am nejra