Transcripts For BLOOMBERG Bloomberg Markets European Open 20240713

Anna the u. S. Urges an immediate ceasefire in syria after sanctioning three officials and hiking tariffs. Week. Is possible this a positive tone on brexit in contrast to the overnight negativity. Wall streets biggest banks report, jp morgan leading among rates and trading concerns. The entanglement with wework is in focus. Matt we are getting those headlines from Michel Barnier, boosting the pound a little higher. We are looking at 126. 74. The optimism is therefore a brexit deal. It will be crunch time now, a few days away from Super Saturday sitting a parliament. We will be watching every development closely. Grip each headline. Futures are up across the board. Yesterday we had wobbly trade in terms of the cash market. European and u. S. Indexes did close lower at the end of the day. We saw a rally in tokyo. Now we see futures rise. Ax futures up 0. 75 this is a significant boost. A little drop yesterday did not come close to erasing 4 gains last week. We have seen real gains across equity indexes the last five or six sessions. 0. 5 futures, green errors, on the s p, nasdaq, and dow jones future. Anna things look more mixed in the asian section session. A little more mixed. Japanese market is playing catchup. The indian index is the best performer. The trade announcements seems to be delivering for another day of gains in europe and the u. S. This lingering on the pound story, you have a chart on what is doing on the barnier headlines. Mind we are all day traders now it seems. We had comments from the finnish premier who said it will not be possible to get a deal this week. It may need to go into next week, but Michel Barnier is talking about something positive and the pound continues to gain. The turkish lira some volatility after the u. S. Administration puts sanctions on three individuals and increasing steel tariffs. Lets talk about where the Global Economy goes from here. We are joined by ludovic subran, chief economist, allianz, good to have you with us. Lets start with what is going on in the u. K. We are in danger of jumping on every headline we get on the brexit story. Being in berlin, you must understand the closeness of the deadline. What are your expectations . Ludovic i wish i could share the closeness of the deadline. They are playing hard to get. We are away from where we were for so many months, so that is a positive development, but we are not optimistic yet. There is still a long road to go, especially on the u. K. Side the leadership is erratic. We are optimistic, the markets are optimistic and have priced in the pound. The real issue will be about the ireland deal because today we have not heard the ireland version of the story, so i would be careful. Clearly, this is the first in the past three months we are happy. Markets maythe rejoice. Look at the real economy, what is interesting is the stockpiling by u. K. Corporates is at a record high. Ofn if there is an extension the deal or if there is a deal, the u. K. Economy will be in the doldrums for some time to go. We need to watch closely the development, but we hope for the best and plan for the worst. Matt what are your clients doing in terms of u. K. Assets . The last threeid years, Big International companies in the ftse 100, but when the pound shows this strength, those earnings are deluded. Ludovic when the currency goes pragmatic. Ents are they are trying to whether the inputs whichgher have been for 69 months. If itre waiting to see can explode at one point. The inventories are so high that it will take time to absorb the shock. Everybody is looking for signs of optimism. Anna have you done any work on the impact of Boris Johnsons flavor of brexit, what that does to the u. K. Economy or the euro zone economy or even the Global Economy . From a global perspective, it is not asked significant, but what work have you done on the latest proposals from Boris Johnson, and what that does to Global Economics . We have crunched the numbers quite a few times, and the positives react to the market, but on the real economy and the stockpiling of the corporate side, there is a lack of confidence. We can see the u. K. Economy rebound. We could see exports up from countries like germany, italy, the netherlands. We are talking about one billion or country over the next six months. The real issue is that the u. K. Economy has shrunk by 10 to 18 if you look at different nominal values. The regain of confidence and Foreign Direct Investment and m a in the business sector will take time to anchor the confidence. If there is an extension, or a mini deal, that does not mean there will not be tension between the countries on what comes next. You say europe is playing hard to get. Wasnstagram a picture posted a couple days ago, is europe in a position to play hard to get . Of the economy is teetering on the edge of a recession. A lot of people say germany is in a recession. If the brexit deal goes wrong, isnt that painful for the european economy . That is the biggest mistake they have made, they say they are prepared. President marcon was boasting that they are ready to let the u. K. Go without a deal. When you look at the numbers, a third of the companies are ready. I do not think any business is ready to let go of the u. K. We are playing good to we are playing hard to get on the deal side, but everybody is crossing their fingers. Bluff betweenr politicians. On the business side, everybody is concerned that politicians get us in a difficult corner. Three of the big countries in thate, this is something has been catching a lot of attention away from the real issues. Country when you look at the weakness in the service sector, it is what we have to live with, and markets are waiting for a signal to make sure they anchor expectations because everybody wants out of this corner. Anna thank you very much, ludovic subran, chief economist, allianz. We are hearing from the irish broadcaster that the u. K. Is set to make fresh proposals on brexit. The foreign minister sites the need to protect the u. K. And improve its brexit proposals. The pound is falling a little on those lines after the initial surge higher. The initial surge was sparked by optimism from Michel Barnier speaking this morning. Up next, raging a ceasefire, the u. S. Calls on turkey to stop its military advance, but stop short of demanding a withdrawal. This is bloomberg. Matt welcome back to Bloomberg Markets european open. I am matt miller in berlin futures very positive trade across European Equity indexes. But the futures not gaining as much because we have a decent gain in the pound after lines from Michel Barnier that a brexit deal is not impossible as we get closer to the deadline. If they do not have a deal by the 19th, which is saturday or sunday, then Boris Johnson has to call for a delay, which he says he will not do. Lets get bloomberg first word news. Chief executive carrie lam continues to defy her critics. And a Weekly Briefing she denied violence is not the solution to months of unrest. A new legislative agenda tomorrow, but any lessee is likely to be overshadowed by continued the tests. A 5k is working toward billion debt package led by j. P. Morgan. Lender istreet pitching investors on what would be one of the riskiest offerings in recent years. Some of the financing that include unsecured with an unusually hefty coupon of 15 . Qantas is attempting the first new york to sydney flight on friday. At nearly 20 hours it is set to be the worlds longest, no airline has completed the rout without stopping. How will humans hold up . Scientists will be on hand to monitor the brains of the pilots and a few dozen passengers. Cass returned to investors on the earliest opportunity. Cash returned to investors on the earliest opportunity. The financial manager would withstand the financial world by freezing the flagship funds. Global news, 24 hours a day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you. President trump has called on turkey for an immediate ceasefire in syria. The white house announced sanctions on three turkish officials and hiked steel tariff s. Significance of the american sanctions . Both far sanctions from the u. S. And the eu have been limited despite the International Outcry on turkeys operation in syria. Previously, donald trump said he would destroy turkeys economy if it continued its dangerous path in syria. Investors are expecting something more severe, and they have not got that. After the sanctions were announced, the lira appreciated against the dollar. Deters also unlikely to military operations in syria, and President Trump also made it clear he is calling for an immediate ceasefire in syria, rather than a full withdrawal by turkish troops. That is very significant. Turkish stock markets are about to open. We will be watching banking stocks and fuel producers. Yesterday, before the sanctions were announced, istanbul fell to lows, the lowest since march. Matt thank you very much. The latest on this developing story. Ludovic subran, chief economist, allianz is still with us in berlin. Interesting what is going on in turkey after the president gave them the green light, and now he is trying to stop them with weak economic sanctions. What do you make of erdogans attempt to stop inflation and halt the weakening currency with Interest Rate cuts . It almost looked like it work. Ludovic when president erdogan said he would do that, it would push up Interest Rates and everybody laughed at him. A issue with turkey is the business sector is secluded from the public side, and what you see is the tightening of the belt. In dollars, but they have been trading on a more cautious basis. The Banking Sector is still strong in turkey. The stabilizers on the private side have been working, but it is true when you look at the new wave of geopolitical risk, and what has happened in turkey, it does not smell good or farewell. You have this madman theory where each time they use escalation to double the bets. We are watching closely. Turkey is and nato, and our border, so we have to be careful. It could cost a lot to germany if turkey goes to shambles. About theit worried development on the turkish side, but more importantly we look at the turkish lira and we see there is some interesting development. It shows it is more complicated. The german exporters are the first to know about that. Your thoughtset on the Global Economy. I have been reading about percentage chances of a global recession or a u. S. Recession. Where do you think either of those is headed . I have a chart showing the probability of a recession in the u. S. Economy, and people are asking if it goes over 30 probability does that mean we see a recession . Ludovic we expect the u. S. 2020, on the investment of companies, and the political tensions. Matt six months, bottom out . Ludovic we expect a recession at the beginning of 2020, and then Central Banks save the day. Because of the fed which is doing qe without saying it is qe, everybody is looking and we are talking about flatlining. The u. S. Economy should be on a growth rate around zero at the beginning of 2020, which is where we were in q1 2016 during the Election Year when hillary and trump were running together. We are close to that situation, and so we avoid a recession, but not is interesting is it is all truth where you are close to zero, it could go down quickly. When you see liquidity, you see also what can happen with political risk. Trump is escalating medical attention. We are watching carefully because it is fine line between flatlining and recession. In europe we are a bit more resilient with the Financial Markets and political risk. Us. thank you for joining we appreciate your time. Ludovic subran, chief economist, allianz. We are minutes away from the open. Stocks to watch, including hello fresh. They boost its guidance. This is bloomberg. Anna welcome back to Bloomberg Markets european open. We are joined by annmarie hordern. This is a company that is facing multiple threats to its opioid addiction treatments including a u. S. Federal case and a lot of generic competition. They are saying sales of their treatment are falling less quickly than expected. The erosion from generics is not going as fast as expected. It should get a boost, but the shares have been beaten down some of what they were. Resh, you can expect a pop at the open. They are boosting their forecast. Thirdquarter revenue is way ahead of expectations. Much. Thank you very the open is next. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Start of cash equity trading. The Asian Session on the msci asiapacific up 0. 6 . Some catchup in japan. Broadly speaking, pretty mixed on the Asian Session, pretty flat. Gloves coming off on the trade deal. More on the u. S. And european futures in a moment. A deal may be difficult, we have had the Dutch Delegation in brussels talk about the need for the u. K. To come through with new proposals. Movement on turkish assets, the turkish lira gaining despite sanctions imposed by the u. S. Administration on three officials. This is what futures show us now. Dax and attack futures up dax futures up by around 0. 6 . Futures up a little higher. Strength in the pound could lead to weakness in stocks, but that inverse correlation not necessarily holding firm and not at the individual stock level. The last couple of sessions we have seen domestic stocks in a different fashion. The ftse 100 does go higher, up by 0. 2 . Spanish ibex up around 0. 5 . 0. 7 . Tch market up by the big movement in the pound obvious to see. The euro with a little strength. Dollar weakness is a feature of the overnight session. Lets look at the sector breakdown and how it plays out from a topdown perspective. One key message is that everything seems on the rise apart from the energy sectors, the i. T. Space, a few staples and telecom names. We are going higher and it is a broadbased rally. That is what is suggested by this sector breakdown. Matt we are seeing all most every stock on the stoxx 600 gain this morning. 517, 521, 523 stocks gaining and that number continues to climb. Only about 60 are down. If you look at the big gainers, hayes plc is one of the biggest gainers, up 4. 3 . Hayes coming out with earnings news that it had good net cash position in line with forecasts. Headcount was up, confidence continues for the longterm. Hayes continues to rise and adding the most points to the stoxx 600. Kema is up, royal bank of scotland, a lot of banks putting up some gains. On the downside you have beltway ,ith earnings bellway earnings pretax release were less than expected. One of the biggest losers, the biggest point reducer on the stoxx 600. Cointreau alsoy among the losers. European markets opening higher this morning as investors consider the possibility of a trade truth between the u. S. And china. We had the handshake deal on friday. A little bit of the shine coming off of the excitement yesterday. Some cold water thrown on the excitement as sources close to the chinese say they still want to talk before signing the agreement on paper. Joining us now is karen ward, managing director chief Market Strategist emea, jp morgan Asset Management. What do you make of the situation currently in terms of the trade war and do you expect a truce . A partial truths, partial optimism. The administration has been treading this difficult balance to continue the agenda, there is a lot of Political Capital within the u. S. Electorate about resolving these trade practices with china. It seems much of the growth has been unfair among the u. S. Electorate. At the same time not risking trumps expansion is each tries to get reelected. It demonstrates the knowledge meant about balance and playing a longer game. Postponing the out deadlines. Ng that is positive relative to where we were six weeks ago. Anna that is positive, it is all relative. To bring a few breaking lines of ceo is the audience, the leaving early 2020. Some information about the new ceo. A chemical company. Plant to be built in turkey. Lets turn to what we are talking about here, the Global Growth story and how the markets respond. I have a chart that shows the s p, and this is a narrow range of the last couple of months, since july. I wonder what it takes to break out. We did get a handshake at least between the u. S. And china. Is that enough to break us out of the range we are in . What do we need, legal text . Trade is one element of the story, but on the other end there is an extraordinary aggressive support from the Central Banks. A commitment to do whatever it takes. In terms of breaking out of the range, i am watching the trade development. On the upside, i think we have to see something conclusive, and talking about tariff reducing reducing tariffs. In the look at surveys u. S. Population, it does not look any interest to play that card right now for the administration. This agenda and hardline will be part of the rhetoric that builds toward the election. It will take a lot to convince the market that this trade war is behind us. At the same time, eyes on the Central Banks and how much of a are willing to do to be preemptive, aggressive, and whether fiscal policy will support them as well. Matt we just spoke to ludovic subran, chief economist, allianz , and he said he expects the u. S. Economy to bottom out next year. It could go into a recession and then come back. He expects the fed to save the day. Does the fed have the firepower to do that . Help. They can certainly if we look at what is happening to financial conditions, they are improving in the u. S. Economy. The only one that is Getting Better is financial conditions that shows the work of the fed coming through and helping the economy. That is starting to lead to improvements in the housing market. What is causing this downturn is businesses feeling unclear about. He future, uncertain at the moment, they have chosen to postpone investment. The jobs market is still ok. If we see a further escalation and see Companies Get margin pressure coming through to cut jobs, then regardless of what the fed does, we have greater risk. They can help, but it depends on the geopolitical backdrop they are working against. Karen what about what governments should be doing . There was the big fiscal stimulus at the start of trumps presidency. What are your expectations . Fiscalwe will see more expansion. In the u. S. It does look more difficult because of their lack of control of the cost of houses. Possibly not in the u. S. In europe the encouraging thing is the region that is struggling the most is the german economy. That is where everyones eyes are. We see the talk of fiscal expansion coming through slowly, it comes a little late in the day. Anna politicians not quite ready to act. To karen ward, managing director chief Market Strategist emea, jp morgan Asset Management. Hellofresh is boosting its outlook. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are 12 minutes into the trading day and looking at solid green arrows across the continent, even the ftse with strength in the pound continues to gain this morning. U. S. Bank earnings kickoff this week in earnest. City, goldman, jp morgan and wells fargo are reporting their thirdquarter results before 8 00 a. M. The usual flood of reports from the biggest banks comes in the context of volatility, big ipo stumbles, and market moving trade and political developments. The golfer falling Interest Rates that have been headwinds and cut into the revenue earned on loans. There are bright spots ahead. Shareholders will be splitting profits among a smaller group. Karen ward, managing director chief Market Strategist emea, jp morgan Asset Management is still with us. We will not talk about banks given the jp morgan report, but tell me about the earnings season expectations. The Investment Community is taking seriously the threat to earnings this year, but maybe there are down rates to come. Last quarter,this taking down expectations. The ability to beat makes it that much easier on todays quarter. The question is what guidance we are getting about cutting courses, and next year the question of margins because the underlying theme is there are tight labor markets, some upward pressure on wages. It does not seem that the Pricing Power on the top line is coming through. If there will be a wobble, it will be about the guidance into next year and margins. Is somethingidance we will pay close attention to. Karen ward, managing director chief Market Strategist emea, jp morgan Asset Management. , we have an exclusive with the president of the st. Louis federal reserve. That conversation on Bloomberg Television and radio will be simulcast at 6 30 a. M. New york time. It is down to the wire. The eu says it needs more time to consider Boris Johnsons brexit plan. There are 16 days left until the u. K. Is deadline and. D. Next. L talk brexit this is bloomberg. Anna welcome back to Bloomberg Markets european open. In paris and berlin stocks a couple ofr. 8 on equity markets. The ftse 100 making more modest gains. Up by 0. 3 . Lets get to individual movers. Fresh up more than 14 , surging. Fullyear the guidance. Earnings are way better than expectations. Novozymes up 3 as they announce their ceo will be part, and a new ceo will come from the outside. 10 . Ard down nearly a number of documents of chief correspondence between management cast further doubt on the accounting practices. We are working on an update on their response. Brexit and the eu chief negotiator Michel Barnier says a deal is possible but it will be difficult. The Prime Minister of finland has the rotating presidency of the European Union the says there will be no agreement. He says time has run out to reach an agreement before thursday. Reopeningmarked the of parliament and a new government agenda. Boris johnson repeatedly pledged to get brexit done and lay the ground for a general election. Joining me from brussels is maria tadeo. We heard a lot from Michel Barnier in brussels, talking about what is going on in brexit. The pound moved initially, but has since pared its gains. What is the latest . We saw sterling jump on the news, but when you look at what Michel Barnier said, he is deal is looking difficult. There are question marks that remain unsolved. Hearing the u. K. Delegation will put forward a new proposal to clarify some of those issues around the new customs that would be done, or the new customs put into place as the new island backstop. The course of the debate is if there is political will to get this done, there is a political push from the major european capitals to get this done. Tomorrow there should be a deal in principle at a technical level done, and that could make thursday make or break. If that is not possible, the conversation will flip into another summit and a new extension. They willeems like have to have an extension if they cannot get it done at this summit. They say there will not be enough time on the 17th or 18th to fully approve a deal, and they will need to talk about it after. , Boris Johnson has for an extension if he does not have a deal. And he says het, will obey this law. The europeans believe we are headed to an extension. They can use that summit to layout the terms and conditions for that extension. Both sides are saying they want to get this done and this is the best way to leave the European Union, and there is time to get the agreement. It is a purely technical extension given the u. K. Parliament and the Eu Parliament time to sign the deal off, and. Dd that extension that is the one thing europeans want to avoid. They are happy to give time to seal the deal, but they are concerned about getting trapped into a cycle of extensions that lead nowhere. Much toank you very maria tadeo in brussels. Big focus on brexit all of this week. Britain faces upheaval on the political side. Change is coming to the bank of england, mark carney is due to step down. Has contributed to a new book on the bank of england. The book is out today, and she is with us. Your message to the bank of england, they have a lot to newtiate, whoever the president of the bank of england is. You are trying to look through the current policy. It could be to the ecb a federal reserve, but we are examining how we improve the and the toolkit that Central Banks are relying on. As we have seen, the banks are important, and having enormous particularly in generating inflation. Inflation seems stuck at a low level. It is turning out to be problematic, because with low problems and a lack of policy ammunition. What we are focused on in this book is all the different considerations to strengthen the toolkit. What i am advocating is a shift to aggregate inflation targets, are not means bygones buy guns. If you missed your target for a period of time, you have to compensate and generate passive inflation to get your price level back on track. Anna what difference would that have made if we look at the record of the bank of england and it is difficult to create inflation . What difference would it make to policy in the u. K. . It has been difficult for the bank of england with what is happening in growth, inflation, and the brexit uncertainty. This is about allowing some flexibility, and saying, you have had inflation above target, but maybe as you go forward, you should allow it to be below target. What is relevant, if we look at the problems of the ecb and the , the ecb is really struggling with inflation. When it has been low, expectations get stuck. Japan shows the dangers of that clearly. The burden of debt grows and you are spiraling in these downward situations. Even though the bank of england has not been played, it is about making sure it has the right be caughtand will not with the problems the fed is having. Matt what are you investing around as Christine Lagarde is the new ecb boss . Of marioing to be more draghi, or will there be a pivot . What she brings to the table is are diplomacy. She has been working in political circles and knows the european situation well. She has fantastic political links. Packageis dry after the mario draghi put in place before he left. We are looking for that central tok messaging to governments go forth and spend. That is what she brings to the table. Much karen you very ward, managing director chief Market Strategist emea, jp morgan Asset Management. Karen will join the radio team. This is bloomberg. 30 minutes into the trade news. Here a the top headlines off the bloomberg terminal. The u. S. Urges turkey to declare an immediate cease fire after sanctioning three official and hiking tariffs back to a level there were earlier this year. A deal is possible with brexit. The e. U. s chief negotiator strikes a positive note on britain leaving the e. U. Over the weekend and an rday because even if agreement will be difficult, more and more difficult, we think, its still possible this week. And wall streets biggest banks report with j. P. Morgan leading the charge among rates financial concern. Ite matt lynn along with anna. Annea were up. 7 of a percent. 503 stocks going higher. So plenty of moves to the outside. Haze is the biggest gainer. This is a tetch rare staffing business and we got numbers a little bit earlier. Bank of ireland is one of those 4 of a . S up by. 3 lets look at some the fall. Its down by 21 . Theyre publishing allegations over its accounting process. So thats weighing on that particular business. Down by 6 . But they have cuts in terms of the ratings by one of the brokers. Lets get to leann. President trump is announcing sanctions on three turkish officials and heightening duties 50 . Eel to this as military operation in syria continue. The president says, the move is necessary to push back militants and resettle refugees. But it has drawn widespread condemnation. The case of cutting rates outweight the risks of running out of ammunition. Tes show the r. B. I. With could address future shocks. Uantum is attempting the first direct sidney flight. No airline has completed the route without stopping. The question is how will he tell us on the marathon. They will monitor the brain of the pilot and the food and sleep of just a few dozen passengers. In the u. K. , the police have ordered Extinction Rebellion campaign to halt their process. Thats after the authorities arrested more than 1400 this month. It says the International Rebellion continues. The group describes it as halting mass extinction. And minimizing the risk of societal collapse. And l news, 24 hours a day attic tack on twitter. This is bloomberg. Anna . Matt . Matt now, we have wire card extending its losses. Remember this company is a dax current member. S the currently down 23 currently up. Im looking at the bottom of the screen there. 19 and change after the f. T. Released some documents that wire card says are total noninnocence. Its total noninnocence. Its a direct market speculation d wild card spokeswoman says that all our numbers had been validated. So wild card is pushing babb against this report in the f. T. Nationals investors are selling the stack off of 1 5 of the market value. Back to the bayics. City, coleman and wells fargo. The unusual flooded reports from the biggest banks comes in the interest of the volatility and stumbles as well as market moving trade and geo political developments. They have cut into the revenue herbed on loans an have pushed. O. s op tradge from our fight nns team. Good morning to you . Haul of company these Companies Reporting on one day. Are the chats going to be around. The shape of the interest. Low yields globally and what that tells to the bread and butter making the focus on he is needs. Were going to be we can be thankful for that. Were going to be drinking with the fire hose with all these banks telling us whats going on. Expect a fair bit of complaining. Theres a nice chart our colleagues have put together showing just how much receive snue not there. There are 13 billion a year ago, the analysts thought we would have 13 billion to play with and you dont. If youre a sbhart seed, what can you do . Smart see. What, can you do . You can control that. You have the fed going down you cant control that either. Hat you can control is the Conference Calls they will be wanting to know what the cost cutting plants are for all these banks. We see the change in revenue there. Nd the biggest losers Morgan Stanley and Goldman Sachs in terms of shrinkage. What are the bright spots. Is there anything to learn from in the slew of reports out today . Yes, definitely, people start their mortgages. The analysts are predicting quite a few people have bns financial. It will be a bit of a market share and the big banks jockying for a share of that most people. Re expecting a spike despite doom and gloom, the u. S. Come assumer is doing fine. Unemployment is low. People arent losing their jobs. The credit quality is perceived to be pretty good. O one is defaulting on their loans. What about the i. P. O. Trajectory. Recovered a number of high profile i. P. O. s not doing good or not doing as well. Howies not going be showing up in the bottom line of these banks. At the very end of the quarter, that was when the fiasco took shape. Probably not that much the numbers, but you might expect a ot of on the Conference Calls. Anyway, it will be a rebound off a historically weak one. But that will be definitely a cloud on the horizon and things lightning goldman, some of these have had mistakes because i wont be a lot of money for them, but there are will be some numbers that will pop up caught there. That in mind. Up next, well bring you some of the Stock Movement this is morning including the drug maker is searching out. Stocks are up more than 19 . This is bloomberg. Anna welcome back to the European Market open. 8 41. 9 41 in paris or berlin. Positive across the European Equity space in particular away from lone don. We are the pound effect. Up by a half a percent against u. S. Dollar. And we see it translated from ollars on to pounds. Stocks up. 6 of a percent. Its game over for the Flagship Investment vehicle. The Equity Company is beingly quit dated. He oks former star stop picker. The european edge fund reporter why did the administration decide theyre going to wind it down . Because thats new information today. He couldnt sell his unliquid and liquid positions to make future. He has fire sales. But its just he wasnt able to meet the requirements to open the fund in december. For wood ff problem bard. Is this a broader problem in the industry . Its a good question. Ts a bit of both. He build up this reputation as man. Slowly rotated into smaller and smaller companies. That was a massive style that became his undoing. It has sparked his liquidity, a crunch over the area. And youve got mark carney who has said that they offer daily liquidity. And the f. D. A. Is investigating. It has gone beyond tizz own firm, what is next for him . He made his name in something for 20 years and people went with him even though he was little. Untested in that area. He seizes to be the manager of this something. What happens to be next for him . I think a lot of people are telling us that its going to get worst before it dwets twitter. We could expect an amounsment very soon. I suspect, you know, managing external money is going g difficult for them in the future. That said, hes a very determined person. And i have other industry insiders telling me that maybe you can come back and manage the mustnt. Bloombergs European Hedge Fund reporter. Lets get down to our top stories in trading today. Emory joins us out of london. Emory . Emory surging 13 . And theyre saying theyre going to see increase in sales an proferts. A lot of this comes down this ioid addiction drug called saboxin. They were up with First Quarter results. They cam in far better than that was fear. Just last week two of his rivals were out with profit warnings. Weve within talk apt this entire card. More than 17 this morning comes as the f. T. Without whisk. A report showcasing a number of zocksments. Between the top Financial Team and this has to do with the accounting practices. We heard a direct quote as they say its total noninnocence this report. And that all their numbers have been validated. Matt, anna . Absolutely. This f. T. Report has been an issue for a long time. The company has said that based on fake documents, so the f. T. Is now reporting or providing these documents that it says it has from a whistleblower. Lets move on to President Trump. He has called on turkey for an immediate cease fire in syria. The white house announced sanctions on three service tirkish officials and high selled tariffs. President trump gave the turks the green light to invite syria. Riiyad hamadi. Is whats the significant of the american sanctions and does this look like an about frace the whoice . White house . I think the companys administration has been at pain to say they did not give the green light for this operation. These sanctions are geared towards a more domestic audience to the audience in the congress, in tust. President trumps ally who is have been critical and said they are willing to bring tougher sanctions on turkey. Here, the markets has been strengthening because i think the assessment is that these sanctions by the administration is mild in comparison to what they could have done. And its noticeable. They did not demand and need ad withdraw of yeah, because weve seen it in this area. And the fact that of the stocks. Is there an expectation. Or is it just too early to say . I think its the assets tsms stocks in particular, theyve had a very bad day yesterday and partly theres a reaction to it that maybe that was overdone. However, i think there is concern that sanctions that there might be more sanctions coming from the u. S. Not necessarily driven by President Trump. And at the same time i think its worth noting that we just heard from folks like who 3. 4 lanning to build a billion in the factory. We have put those since monitoring the situation. Thanks very much. Bloombergs executive joining us with the latest on whats happening in syria. Up next, j. P. Morgan to the rescue. Leaning towards a 5 billion. Well bring you the latest on that story next. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. Minutes. Ost 1 52 looking at decent green arrows n the continental indexes, the i guess optimism for a brexit deal. Typically you see an inversed correlation there. Its not as strong today. Weworks the wii story. They want to rescue a rescue passage. They prefer the lifeline from j. P. M. , almost 5 bill over selling a controlling stake in itself called the soft bank. Joining us now manual bigorri. Why werent we doing this . Is there on the verge of running out of money . Y, max. I mean, what a yes, max. I mean, we are exciting. Very follow very closely here. I mean, we worked we went from the darling to being the a. I. Pomplet just last month, right . When they were planning to the idea and they put the 11th hour. I mean, they seem to prefer the option to get the five billion dollars in financial from j. P. More gain. That carry as very, very heft cause. To get the companys stables and words. They need to find a way to become profitable. So the Companies Read rode map is really challenges for sure. And what is it the past forwards on this on this man yell. What do we foresee . I think the next critical the next days are going to be critical, really . J. P. More gain is handing out investors appear tight. Its going to be very expensive. They trying to find ways to range money and im happy now to get the company going. I wanted it very closely. And from there on wards, the key the ski whether theyre able to turn around the company and become profitable. Who knows that could wave the the futures. With what are the alternatives here. Right . Oned the plan b, exactly. That would be the plan b. I mean, well figure in the next few days whether they go for the whole thing or the financial action. They end up selling a controlling steak. Those two seem to be the only two options for now. I mean, the problem with the plan b many, matt, is that it would be highly diluted for the early backers, the private investors that were supportive of the company. I so that is the main program for the option. Ok. Manuel, thanks very much. He deals with the recorder on the campus. Seems to tie into the banker r earning season and were expecting to be in the spot light. So well keep a look that. A lot of dato out ode. Todays most important thing i think you should be keeping an eye 9 30 a. M. U. K. Time. We will have the bastion of resillians. It has looked a little less solid. 10 00 a. M. U. K. Time. We also got the survey map that will be studied for murter clues out the se versity well be looking that information mark. They will hold bond options. Those are at 10 30 u. K. Time. The German Federal government calls for bids on burrows and two years 60 note. Over in the u. S. The new york fed will public the Empire State Manufacturing survey. It will give us an update on sentiment and activity at a critical time. This is bloomberg. Francine the eu says the brexit deal is difficult but possible. Mark carney speaks shortly. Pressing for peace, the u. S. Urges turkey to declare an immediate ceasefire, and hiking steel tariffs. Jp morgan and wells fargo report earnings today. Welcome to bloomberg surveillance. I am