The u. S. Recovery could drag on through 2021 as long as theres no second outbreak. There might take a vaccine for people to regain confidence. Speaking of that, as present a aims to get 3 million vaccine doses ready for the u. K. By september. But Boris Johnson warns that u. K. May not be free of the virus for some time to come. And the Trump Administration steps up its campaign to blame china for the coronavirus, with an aide suggesting beijing sent Airline Passengers around the world to spread the infection. Were just under an hour away from the start of cash equity trading in europe. Lets take a look at futures this morning. We had a bit of a mixed picture. And now you see big, strong gains in european futures, 1. 5 on dax futures, 1. 33 on ftse futures. If you look at u. S. Futures, you also see 1 gains, about, a little bit less for s p 500 and nasdaq futures, but just barely. And more than 1 on Dow Jones Industrial average futures. What you see on the gmm . Gmm. Well, difficult for i want to get to redlines, four here numbers were posted. We are getting embers from the vision fund. They invest in technology and other businesses, public. The fullyears vision fund lost is ¥1. 9 trillion, versus y1. 26 trillion. Just getting an update, right headline across the bloomberg terminal on Softbank Vision Fund and just how much money it has lost in the fullyear. They are also giving a few more details on how the business is performing. You asked about the gmm. Lets look at that. We mentioned the risk on trades were seeing, but msci asia not up by much. But it falls as equity markets have been open. There does seem to be reason to be cheerful, 75 of the california economy open and the like. We see those positive messages, investors aware of the sectors. Keep an eye on commodities, oil back above 30 a barrel on the brain and imax contract. Gold at a sevenyear high. Not everything is risk on. Keeping on the pound after the comments over the weekend about the bank of england examining various policies, unconventional policies, including negative Interest Rates. Thats a quick look at what is going on in these markets. . Matt matt . Matt lets get the plumber first word news. The u. S. Economic recovery could drag on until the end of next year, according to fed chairman Jerome Powell. He made the comments in an interview with cbs, saying the recovery hinged on the arrival of a vaccine. He added the central bank has not exhausted its options for supporting economic growth. Today marks the first meeting of the World Health Organizations governing body since the start of the coronavirus pandemic, and china is set to be challenged on its handling of the outbreak. Europe and australia are likely to push for a probe on the origins of the virus, on top of criticism from the u. S. , the white house repeatedly blaming beijing for the pandemic. Astrazeneca is aiming to make 30 million doses of a coronavirus september, and has committed to delivering 100 million doses this year. U. K. Will be the first country to get access to the medicine, if its successful. The vaccine is being developed at Oxford University and the business secretary says its getting over 65 Million Pounds for funding. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Anna . Anna futures are advancing this morning, along with modest gains in asia equities as investors look at some encouragement or look for some encouragement from signs of businesses reopening, crude oil and Commodity Currencies also advising. Joining us is bloombergs mliv currency and rate strategist could to speak to you. Has significant strategist. Good to speak to you. How significant are the comments the u. S. Economy will recover . He gave an indication of where unemployment might top out in the u. S. Is this giving comfort to markets . U. S. Futures pointing higher. Guest good morning. I definitely think its comforting to the markets, for sure, because as we said, he expects strong in the second half. His reassurance matters because many of the markets were fearing we could be in for an lshaped recovery and even fearing a 1929 style depression. So the statement is good for sentiment and for investor confidence, coming as it does from the worlds most preeminent central bank. Anna . Matt you know what, anna mentioned that gold was powering higher again today. 5 . Act, all metals up whats going on there . Ven well, you got to look at in potentialt and the for negative rates in the u. K. If you look at it in that context, gold has the chance to go even higher. Rates are bound to be lower for a long while. Gold is not an interestbearing asset, but there are no negative rates associated with it. And that is a good incentive for speculators to drive up this bright the price of gold. Matt . Anna let me pick up on the question of the day you and the team have been throwing around, which is does Value Investing still matter . We seem to perpetually revisit this theme, but it has been Growth Stocks leading the way in u. S. Equities. What is the story around value at this point . Underell, valley may performed for a period of time underperform for a period of time. There is no investing style invoke permanently en vogue permanently. A tender margin of safety that comes with it, i dont think thats going to go away anytime soon. If you look at have Warren Buffett and benjamin gramm approach it, they all believe in the secret cigarette but style of investing, that you go and buy. The market will support you eventually, if not immediately. Maybe not immediately, but definitely at some point in time, value will converge and will produce, will deliver the results. Anna . Matt thanks very much. Amazing chart here. Growth stocks overvalued stocks, starting even before the financial crisis. But just powering up in the recovery from the pandemic there, the pandemic drop in equities at the end of the chart. Our currency us, and rate strategist on the phone. Coming up, dragging on. Powell says a full recovery of the u. S. Economy could stretch to the end of 2021. Well continue to discuss the comments of, as ven says, the preeminent central banker in the world. More on that next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open on a monday, kicking off the weekend with us. Lets get the Bloomberg Business flash with you. Here are the top corporate stories from the bloomberg terminal. Emirates is considering slashing about 30,000 jobs. That would see the worlds biggest longhaul carrier shrink its payroll by as much as 30 . This comes as the travel industry is in near hibernation due to the coronavirus pandemic. Their lines are looking to reduce costs and realign their operations to cope with the downturn in demand. Something is doubling the amount of shares it plans to buy back. The company will repurchase as much as 4. 7 billion worth. Its also announced changes to its board, including the resignation of its director and alibaba founder jack ma. Dow jones is reporting it plans to sell a significant portion of backtate in tmobile u. S. To deutsche telekom. Berkshire hathaway sold off most of its state in goldman sachs. Its a long time holding that slant nearly 33 in the first quarter. Warren buffetts company also cut investment in jp morgan by 3 . Berkshire did end up boosting ank, with anne b increased stake in pmc. And that is your Bloomberg Business flash. Anna . Anna lets get to the around Jerome Powell and the fed. The fed chair has warned the recovery from the coronavirus pandemic could take longer than expected and depend on the delivery of a vaccine. It may take a while. It may take capable of time. It could take a period of time. We dont know. That was short and sweet, wasnt it . Were joined by rebecca. Very good monday morning to you. We look at this comment from jay powell, seem to have comforted markets, futures point higher in the u. S. Do you think the april rally went too far . Where are we now in terms of risk on, risk off radar . Rebecca good morning. Yes, certainly i think the Market Recovery was overdone. Its a classic case of a bear market rally. We saw the crisis go up. We didnt see volumes and we didnt see investors following through. I think that left it in a difficult position. What we saw last week was a growing realization that the vshaped recovery, to use someone elses words, but i very much see that power. And i think its going to be much more difficult. What we were seeing last week is Corporate News and economic news, suggesting the recovery will be delayed. I think now we enter this week at a very interesting time, when we clearly have two sides of the argument. He still have some people believing that 2021 will be ok. If you look at earnings, some believe in a quick bounceback there. And then you have a lot of other people, including powell, who say its going to be much more difficult. That will be the line i would take. And the fact that from here, to see another big leg up, youre going to need a health solution. Youres it not so, going to need a health solution. You dont think a stimulus solution will suffice . You could look at powells remarks as an attempt to focus the mind of congress and get another fiscal stimulus package out there. Rebecca i think, and clearly no one is going to say no thank you to more stimulus, but stimulus can only go so far. The stimulus we saw in march, it meant that we reached a bottom in the market. Were not going to receive that bottom. Were not going to have a liquidity crisis. Good news from here could save the economy, but wont necessarily lead to demand and earnings growth. You only need to look at what is happening in china, friday you butindustrial figures rise, retail figures felt low and are still falling. The stimulus isnt necessarily owing to feed fruit to corporate profits. Was looking ati the move from friday, and they kept the rating in france unchanged, but changed the outlook negative. How much do you think markets have been vulnerable to this ratings movement, or at least ratings movement when they come . Is the european invest ins investment story depended, or can we look through that . Rebecca i think investors are expecting difficult ratings. I think its almost in peoples mindset. If you see the pure amount of underperformance, youre effective. Some of that is baked in. Were already tuned into the european economy being hurt or hit and will take longer harder hit and will take longer to recover. Matt you think europe is going to take longer to recover is it possibly because we have the lack of, for the cohesive federal government response that the u. S. Can count on . Rebecca i think its more just because of the makeup of the economies. You can break it down into stimulus and return to work and reopening of economies, the actually one thing thats really worked in the u. S. Favor the last couple of weeks has been the size of the tech sector, the size of the health care sector, whereas in europe, our largest sector is financials. If one place up against the other, most want to be with the cashrich businesses. Thats one thing that will continue to raid the stock market, not necessarily the economy going forward. Anna how damaging do you think the rate of an employment in the u. S. Is going to be further u. S. Recovery story . I was looking at research by bloomberg, 1 5 of american workers, 6. 5 million, have filed for on up limit since midmarch. Barely millions of those are still waiting months later to get hold of the money that they are due. This is going to take its toll on the u. S. Economy, isnt it . Rebecca definitely. Even though ive said the u. S. Is better placed than europe, im not saying the u. S. Is in a good place either. I think weve been underestimating economic impact. And more than that, weve been seriously underestimating corporate earnings. What youre talking about is disruption for months and months to come. We may have seen a hit to the 2020 forecast, but that forecast is not reflecting topdown and we are not seeing adjustments to the 2021 forecasts yet. Matt rebecca, were going to keep you with us. We have more to ask. Rebecca stays with us. Coming up, crude rise. Oil is above 30 a barrel for the first time in months. Well discuss the oil market. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are just under 40 minutes to the start of cash trade. We have futures rising to kickoff the week. Oil has risen above 30 a barrel for the first time in two months. Thats as producers in the u. S. And elsewhere continue to cut activity, helping to rebalance a market thrown into disarray by a coronavirus by the coronavirus lockdowns, globally. Rebecca is still with us. Rebecca, you have a relatively bearish view on the markets on economies. I wonder, how do you see this polish oil story, especially bullish will story, especially considering it doesnt seem a lot of people are going to be back on the air or in the roads anytime soon. Had a tighteras rally several times, and its very difficult. One just looks very simply at the demand versus supply equation and thats all you need to tell. I think the difference now is you clearly have seen production cuts. Youve seen them come through from opecplus, from the u. S. To level up the equation so maybe oil doesnt go down to lowes again, but its a different lows again, but its a different thing to say people should reenter shares in a big way. Let me ask what implications the recently weak oil price, still relatively weak , what implications does that have for inflation . Inflation is dead for the for siebel future. We notice foreseeable future. We notice that hedge funds lining up behind gold again. Some talk about an inflation link there. What is your expectation expectation . Rebecca as others have said, it killed the inflation story. And with that deflation, its another thing which will carry on hitting growth forecast for the rest of the year. Peoplestories about looking to hedge inflation bets, but it seems a long way out. Changes going to have to to see any kind of demand for inflation going on. Matt what do you think investors should do, especially if investors sold after the rally . We saw last month, beginning of this month, and now need to put their cash summer. Do etfs look like the right play because of Central Bank Nine buying . Rebecca certainly etfs have had a good crisis. They have net inflows here today despite the future disruption weve seen. And youre right. Highyielding of etfs has led to a lot of public city. Weve seen publicity. Weve seen a lot of investors ask, a lot of interest in that. An etfs make a very transparent, very easy to transact vehicle. And some have meant to have done that. They are priced continuously, you can trade continuously, and they really work for people. Within the area, there are many different ways to play this market. And in terms of the suggestion from us at the moment, looking at one of my specialist areas, sectors, our continue discussions continue to be defensive, continue to be in those areas less skate by this crisis scathed by this crisis. Anna what about the esg gts . Many investors do relate what were seeing now to climate change. For others, the focus is on the virus. What is your perspective . Rebecca there were many doomsayers who said it wouldnt survive the crisis and investors with think right, im not going to bother looking at that. Im not going to pay any type of premium for est. The esg has proven extremely relevant. Where we may look back and say we were very slow, as nations, as governments to react to the threat of the virus, youve now been able to unleash investors are able to say look, lets not make the same mistake. Weve had many warnings, but lets stick with this. The collapse in the oil price this year has meant many fossil fuel reserves just arent workable anymore. In the meantime, youve got Renewable Energy sources ready to take over orders. Plus, the fact you move away from the environment, huge safety problem were discussing, workers rights, Workers Health and safety. Matt rebecca, thank you so much for joining us. Matt welcome back to bloomberg markets. This is the european open, 30 minutes to the start of cash equity trading. You can see we have futures pointing higher, dax futures now up more than 2 . Lets look ahead to some of the key events. Tomorrow, fed chair Jerome Powell and treasury secretary Steven Mnuchin will testify before the Senate Banking committee. And staying in the u. S. Wednesday, were going to get the feds april meeting. Thursday, its the turn of the ecb. The vanke publishes its Monetary Policy meeting. In japan, shinzo abe is expected to make a decision on whether to end the state of virus emergency in areas, including tokyo and osaka. On friday, the National Peoples congress, the annual gathering of chinas main legislature, gets underway following coronavirus induced delays. Anna . Matt, lets talk about the avian aviation sector. The Coronavirus Crisis will reduce pathogens by have over the next year. Carrier isggest taxing corporate financing acility as it digs in for slow recovery that is set to see a price war across a much omitted air travel market. I am pleased to say we are joined by the ceo of ryanair. Great to speak to you this morning. Of a loane difference scheme and asking for a bailout . Youve been critical of any airlines who have asked for money from the government. No, we havent. Weve been supportive. Were supportive of the state aid made transparent to all competitors equally. As the payroll support schemes, such as the u. K. Loans schemes. We qualify because were the largest passenger in the u. K. Were what were opposed to is on top of billion,. Relieves 12 italia that has been bankrupt for a number of years. Now receive 3 billion. Without any corresponding support to the other air in that market. The french are refunding french taxes to air france, but not to ryanair, who also operate in france. Is anere callinga for end to those states, but are aids,vailable state but are made available to all. Anna you can critical for those kinds of schemes. Are you looking for some of the payroll support schemes in other countries, such as spain, entering to get support from other governments . Michael we qualify in all those countries, as are the other airlines. Were grateful for that support. Without that support, even ryanair wont survive. We can survive for many months, if not years, on payroll support schemes. We dont need any illegal state aid on top of that. Why does air france, on top of massive payrolls, need additional state aid . Why do they need 12 billion when their payroll is being paid entirely by the german, austrian, swiss governments . Theyre filling up with state to engagell use that in massive below cost selling. Competition all across europe. Lufthansa will use it to buy the competitors in europe. Weve asked repeatedly we welcome margaret this morning. Why is it the german and the french government, the people who keep telling everybody else you must obey by the rules, are the biggest state aid tubers in all this . When other governments like the u. K. , the irish, the spanish, are not bailing out there airlines because we dont need those bailouts . Matt one of the arguments youll get here out of berlin, michael, is that they need to ensure there is a carrier that is going to be able to cater to Business People and also longer haul flights that you dont necessarily a market you dont necessarily serve. If there were no lufthansa or air france, would ryanair expand its business to serve those markets . No, first of all, the argument is specious anyway. It will take longer to recover. Theyre not seeking stay eight. State aid. If the German Government wants to give to the fans are, it has to give on a proportional basis, the same 82 germany aid to germany. The German Government are going to give lufthansa 12 billion on top of payroll support, on top of tax refunds. Lufthansa dont need this volume of money. Theyre just going to use this to wipe out competition in the german market. Use what they are going to 12 billion is to massively distort the long haul flows into europe for the next number of years because they can undercut ba, liberia, and the other longhaul carriers, who were not receiving illegal state aid. It is a massive distortion of the competition between europe, and it is something the European Union should not be allowing to go ahead. Just because the German Government is rich doesnt mean it should be allowed to state aid all of its Failing Companies or struggling companies. Companies should be allowed to go bust. But because they are rich, they do it. And then they lecture other countries, you must obey the rules. A lot of times, it does not need 12 billion euros of state aid on top of massive payroll support schemes. They just dont need it. But they are like state aid. Junkies they see an opportunity to fill factions full of stay eight that will secure them for five years and distort the conversation state aid that will secure them for five years and distort the competition. Matt . They need to ensure there are longhaul carriers to get people around to get the economy going again . Thats not going to be a profitable business if people arent going to want to sit next to each other. He still got to do social distancing in a plane. Youre going to need these widebody carriers in existence even though it is not economically feasible. Michael firstly, its other nonsense. A, you cant do social distancing in an aluminum tube, whether a train or underground carriage. Social distancing and mass transport is impossible. You need Affective Health measures, face masks and temperature checks. If everybodys wearing face masks, you eliminate bio about 98. 5 of the spread of covid19. I fully accept longform will take longer to come back. But when the German Government is making this save the failing longhaul carrier with 12 billion of stay eight, what they are really doing is state aid, what theyre really doing is extending into the market, lets have distortion, put competition out of business. When you eliminate the competition, you go back to where we were in the 1960s and 1970s. You had a couple of legacy airlines, who were charging an arm and a leg for air travel, and you will reverse 30 years of one of the few economic success of the European Union. Why . So you can save lufthansas longhaul . Longhaul will take longer to come back. Because it takes longer, you might need more payroll support in place for longhaul flights. You dont need 12 billion euros in state aid doping, which lufthansa will use to buy up more competitive competitors or put them out of business. Anna you clearly have a lot of confidence in face masks. Are we going to end up with a lot of nationalized airlines . Is that we think we are going . Michael no, i dont. We have one nationalized area line, air italia, which has been bankrupt for years, surviving on loans. Not only have they nationalized it, theyve given it stay eight state aid. We now have to compete for the next five years with an airline which has never made any money, but has 3 billion to engage in below cost selling with others. I dont think youll see more nationalizations, mainly because the governments of u. K. , spain, ireland dont have the money to be international airlines. The french and germans are quasinationalizing lufthansa and air france with state aid. Subsidiaries last a number of years. Weve lost 200 Million Euros in louder, competing with lufthansa in the german and austrian markets. Now we have to compete with 12 billion euros, who can engage in low cost selling forever. What are the chances of surviving . Lufthansa wont be nationalizing. They are just going to be state aid doped for the next five or 10 years. Matt is this one of the changes that well see from this pandemic, longerterm, that we just flow away from freemarket capitalism back towards the Government Systems around the world . Certainly, it looks like Big Government is going to be the answer to a lot of problems, including airlines. Know, bigell, as you government has never been the answer to any problem. Theyve mismanaged every problem theyve gotten involved in. This is where we rely on the european commission. Shes got to effectively regulate the ability of the french and the germans and the italians to massively distort the Competitive Landscape for air travel across europe, and to protect, or at least file for some protections for ryanair, easyjet, nba. And ba. We werent into this christ went into this crisis, we can survive well into 2021 without even flying. But what we can have it cant what we cant have is all those airlines coming out of this much weakened and facing with the fans are and air Italia Italia onanza and air top of the payroll support schemes, and competition for the next 1520 years. Europe does not want to go back to Flag Carrier Airlines and high fares. Anna let me ask you about your plans for bringing that capacity, getting people flying once again. He talked about july. You talked about july. Are you shaping your plans around the quarantine rules that still exist or are going to exist in parts of europe . Michael not really. We keep the quarantine rules, which even the British Government admits they cant define and dont know how to implement. They are clearly not based in at there is no scientific basis for a 14 day quarantine. They are going to exempt the irish, french, truck drivers, people that travel over the border. It is nonsense. I take more confidence from the measures used by the Italian Government this weekend, where they are saying from the third of june, they have eliminated barriers of entry into italy, the 14 day isolation is gone. 14 day isolation is unmanageable, will have no credit ability among the citizenry of europe. Because they know isnt implement a bull and cannot be policed. But they put out this 14 day isolation as an alternative to wearing face masks. Face masks are much more effective and tangible sign that people are taking effective preventative measures. Where social distancing is impossible. Social distancing is not possible in train stations, and the London Underground, or onboard aircraft. We need our people wearing face unemploymentiotic, mentale we dont know. The u. K. Government is making up this stuff as they go along. It is not sciencebased and i think it will largely, over the next three or four weeks, be removed in favor of something that is favored. Matt michael, great to get some time with you. Thank you for joining us. Hes got a lot to say on the industry right now. Up next, the fight over urban space is on, coronavirus enforcing europes major cities to have a rethink. Well look at what your new commute could look like if you have to commute at all. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are just about 13 minutes away from the start of cash equity trading. You can see futures are up 1. 5 , almost 2 here in germany. Now, the coronavirus is forcing europes major cities to rethink their use of space. The need for social distancing has seen capacity plunge on public transportation. Administrations from london to paris to berlin are making adjustments to help people walk and cycle rather than get into their cars. That doesnt make sense because getting in your cars is legit social distancing. But we will talk to our opinion columnist about this right now. Joining us from berlin, chris bryant from bloomberg opinion. Are we supposed to avoid cars for social distancing reasons, or is that the green aspect of this recovery, chris . Chris good morning. Yeah, london having a severe issue at the moment. If we are all going to do social distancing, it means the Maximum Capacity of London Underground and buses will be reduced 85 . Right now, that is ok because almost nobody is traveling to london. But as we head back to work and the message of the u. K. Government is people need to get back there can do so or we should work from home were possible, we are going to see increasing strains on that. London came out on friday and said look, public transport needs to be a last resort. Essentially, people need to walk or cycle were possible, because what they are really afraid of is everybody will jump in their cars. I should add here that i have recently acquired a car, rented one for the end of the year because i dont need it for commuting. But i like to be able to get out of the city after a couple of months in knocked down. I have added one extra car on the streets of berlin right now. I am aware that makes me a bit of a hypocrite because that wont do any good for the varmint. Matt makes you safe. Anna difficult times for those who believe in the greens. We just heard from michael oleary. He was talking about air travel. He said you cant do social distancing in an aluminum to. Some limiting aluminum tube. What are restaurants going to look like across europe . Ive seen pictures of restaurants in italy, with plastic screens up between tables. Is that the reality . What we hope is good or do we hope the weather is good . To a restaurant for the First Time Since the lockdown, and it was nice everybody was outside. I think that has got to be the approach on the european summer, where we can move outside. I think science is saying the chances of catching this thing much more likely in a confined space. That could be the London Underground, more likely perhaps a restaurant without ventilation. Who knows . We have seen it in meat plants, big outbreaks. If you are sitting outside or walking outside in a park, the chance of getting this thing is less. As such, you have got to make maximum use of outside space. You have seen in some spaces in europe, they have been expanding cycleways, but also a tendency to restaurants putting tables on the street. That could be reclaiming car Parking Spaces in order to be used for either retail or restaurant, and perhaps even whole city squares. Proposing struggling restaurants who dont have the outside space could take advantage of public spacing and help recoup lost revenues. Anna really interesting examples there for various cities around europe are doing. Some of the response is going to be localized. Thank you very much. Coming up next, the race for a vaccine. Astrazeneca aims to get 30 million doses ready for the u. K. By september. But the u. S. Is talking about a vaccine not until next year. We will get into that story coming up next. This is bloomberg. Anna welcome back to the European Market open. A trade equity day looks quite positive. With focus on rates. Vaccine markets are dedicated to the subject. Astrazeneca dedicated to making 30 million doses ready for the u. K. By september. It is being developed at the university of oxford and will be the first country to get access, should it be successful. Joining us now is frances daily from bloomberg intelligence. We talked about nationalism. Lets focus in on the date here, sam. Datember, is this a new the u. S. Is talking about next year . As soon are we expecting a vaccine . Sam morning. This isnt necessarily a good date. If you go back a few weeks ago, the oxford team had suggested they will have doses by september, or at least the vaccine would be ready by september. But i think we need to look at this in a slightly different light. This is more about having whatever number of doses you can manufacture ready so that if the vaccine ends up showing efficacy or activity in the healthy subjects its being tested in right now, at least people rstar are starting to be able to use it. This is more about, almost like insurance policy. Ok, good context. Thank you very much. Sam giving us the necessary context around the astrazeneca story. Well keep that stock in mind when we look at stocks opening up. Euro stoxx 50s point up 1. 9 . Seems powell is giving optimism to markets globally around a recovery in the u. S. Economy. That is helping boost the mood at the start of another trading week in europe. The market open is next. This is bloomberg. Anna just minutes to go before the start of the trading day in europe. Jerome powell says the u. S. Is get ahead in 2021 as long as there is no second outbreak. Aims to get 30 million ready for the u. K. By september. U. K. Oris johnson warns the may be not free from the virus and sometime. The trumpet ministration steps up its european teachers are hired to kickoff the week. Three down weeks and around. In a row. An optimistic start is likely. Europe is underpriced compared to the u. S. Valuations are much lower. , live look at the assets trade, cash trade is it takes off right now. We can see the ftse coming out of the gate first. Up about 1 . Thirds. S up one and two see the futures column there shows that we have a gains on continental Index Futures as well. This is coming out 2 . Look at the commodities column. Gas, oil, brent crude, all big gainers. Those are just the oils. If you take a look at metals, they are showing big gains. Agros are up as well. Big gains in commodities as well as stocks today. Bondsd being sold off with yields rising. Highern markets are along with all of the gas assets. Anna European Markets higher. And interesting thing about the contrasting valuations. Havingmay have been expensive stocks. They are trading near record lows compared to the s p. Europe has relative cheapness. Us is the Investment Bank strategists. We spent a week talking about big names on wall street. Stocks in the u. S. Are too expensive right now. One person suggesting that maybe we need to look at european stocks. What to you make of the relative valuation of europe versus the u. S. . I think there is absolutely no doubt that european indices are cheaper relative to the u. S. Index. That is not just true for europe, it is true for japan and emerging markets. My suspicion is it would be right for look to me and at version. Inversion. Not have to do with the u. S. Economy. It has everything to do with the u. S. Differences. Thatts looking for sectors continue to grow. Benefit from will this move from stock to materials. Gains. Where the u. S. If you would to look at equity markets in general, it is true that you are pricing in a decent recovery from a very low base. That is a separate question. If the u. S. Is likely to outperform europe over the next six months or 12 months. My answer would be probably yes. If you think about the one reason europe has outperformed in the past, the main one has been it has received extensive stimulus from china. This certainly helps europe. It could help china. Later this week we find out if there is an easier market policy. The Bigger Picture is china does not want to have its economy the same way it was in 2009 or 2012 or 2016. Energy and europe could become a mediumterm investment. That makes a lot of sense. The dax in particular has done quite well. It is the only other market that is then welcoming out of these 12 months. Dax along with the s p. Taxes a little bit behind the dax is a little bit behind the s p. In general, i dont think mean and version in currencies or discounts of europe relative to the rest of the world is the way to go. We see fundamental shifts in terms of trades away from goods and services. Matt what about mean reversion in value versus growth . Value has been on the back foot for well over a decade now. Hillary had a great chart earlier showing that Growth Stocks overvalue stocks, they have been winning since 2006. Fromu look at the recovery the most recent crash, i think it is fair to call that in stocks, we see the fang stocks just ramping up in value. Here is a chart. We brought it up. You can see Growth Stocks overvalue stocks in terms of valuation is now at a historical high. It has been on a nonstop run since 2006. When can that trade turnaround . When do we see mean reversion . Mostis is one of the interesting questions in the markets. When we think about the ratio of , most people value think about value. Bit moret is a little that growth comes down under the weight of its own valuation. The ratio probably looks at hundreds of distributions. We look at a certain time. That within that ratio it is important to think about when growth limits valuation. It is not at 5 . Value is not at an alltime low. Sometimes the book value does not know what that does. Value trades at about 40 . I find it quite difficult that these expectations are not picking up. The dollar selloff will be muted. Those are the kinds of things you need for value to show a significant renaissance. I dont think those variables are in place. I dont see a major renaissance for value. In going to be any mean reversion, i think it will be with Growth Stocks overvalue stocks. Mind. We will keep that in thank you very much. He stays with us on the program on the European Market open. The market regulators across europe have been announcing shortselling. You see these Building Blocks of the story coming through. French, andek, italian authorities have jointly decided to into the ban on shortselling. They have been in place since the middle of march. The french regulator says the ban was put in place due to the violent and unregulated selloff. We will hear more about that story later on. We will be joined by the chairman. Up, powell says full recovery of the u. S. Economy could stretch out to the end of 2021. We will talk about the u. S. Recovery. This is bloomberg. Matt welcome back. 11 minutes into the session. You see gains on the ftse right now. The same on the dax. Other indexes catching up. See risk assets bid on this monday morning. More optimism comes. You will see a lot of stimulus to come on top of the 8 trillion already released globally. Lets get the Bloomberg Business flash. Todays corporate stories off the terminal. Astrazeneca is looking to make 30 million doses of Coronavirus Vaccine by midseptember. It has already committed to delivering 100 million this year. The u. K. Will be the first country to get access to the medicine. It is being developed at Oxford University. Astrazeneca spending over 65 Million Pounds. Emirates is considering slashing 30,000 jobs globally. They could see its payroll shrank by 30 . The travel industry is in near hibernation due to the coronavirus. Airlines are coping with the downturn in demand. Berkshire hathaway has sold off most of its stake in goldman sachs. It is a long time holding. It slumped nearly 33 in the first quarter. Did in the boosting its bet on one bank. Increased stakes in pnc. That is your Bloomberg Business flash. Dont bet against the american economy. This according to Jerome Powell. He warned the recovery could take longer than expected. It depends on the delivery of a vaccine. This economy will recover. It may take a while. It could stretch through the end of next year. We really do not know. Our guest is still with us. I wonder if you think the u. S. Has an advantage over europe because it is cohesive. It has one Cohesive Strategy in terms of stimulus. Federal government is going to release stimulus across the country regardless of which states prefer to have an advantage. Europe does not have that. You still have some rich countries and poor countries. They dont necessarily all want to help each other out. I think it is really important to think really hard about how we define the terms stimulus. If we were to break it down into monetary and fiscal, what we really mean is Central Banks buying paper from corporates. Or is it a decline in the price of money . About the decline in real Interest Rates, the u. S. Is the only economy that has seen a tremendous decline in Interest Rates. Even in the 12 months before the virus. A real Interest Rates decline. Matt we also see washington sending out checks to everyone who applies. Dollars spent from the federal government in terms of Infrastructure Projects and the like. And trillions more to come. Is that helpful . Indeed. That is 23 of gdp. Fiscal stimulus more than any other part of the world, the monetary stimulus is much higher. Real Interest Rates have gone up. Just the fact that the ecb is counterfactual but it has not been enough for italy to bring down real Interest Rates. Stimulus thanore any other part of the world. It is not just the economy. It is markets. We are trading indices. The way to. Maximize is significantly better than the rest of the world even if you think about the economy, in the long haul, you can expect a 10 year trend. E have not seen any symptoms the risk is that outperformance accelerates. That trade war would have an impact. Talk a little bit more about that in just a moment. Markets have increasingly trying to push the feds. Do you think that will prove fruitful . Will we see negative Interest Rate policy from the fed . I think it is very unlikely. Difference between how things work out in the u. S. And europe is really about the money market funds. That could lead to a tightening of financial conditions. They have thought about that as a temporary policy. About negative Interest Rates as being negative for the economy. The market is wrong to price that. Matt absolutely. U. S. Saysent of the negative rates would be a gift. On if ithe jury is out has been a beneficial policy in the region to have tried it. Our guest stays with us a little bit longer. Up next, the Trump Administration steps up its fingerpointing campaign against china. A white house adviser accuses the communist country of feeding the virus through its travelers. Basically sending the disease around on purpose. This is bloomberg. Anna welcome back. A solid session underway. On a number of these markets. All doing pretty nicely up. Lets dive into some stock specifics and get some of the movers. Giant canceling its plans to buy occidental assets in ghana. Doing some edp. Interesting moves. Liquidity bytheir tapping a deal with the u. K. Government. They look less favorably on anything that looks like a cash handout. Up 11 . Ck is they beat a sales goal. Lets talk about geopolitical tension and where that leaves us. Taiwan semiconductor has stopped accepting new orders from huawei. The move comes after the trump them ofration accused supplying the tech company. The trump team has stepped up its fingerpointing campaign. A white house trade advisor suggested that china sent Airline Passengers to spread covid19. We watched this war of words between china and the u. S. We are coming up against a u. S. Election in november. We try to quantify the risk. We have set up a trade monitor. A spectrum of no risk being priced in the market and the market being extremely worried, there is optimism. Is pricing in berks, but it is not pricing in bite. When push comes to shove, they are really caring about financial conditions. They are not trying to hurt the u. S. Economy. Say thatt is fair to those risks are not being priced. China happens to be one market where it has outperformed. Matt how far do you expect this to go . You think the trade deal gets canceled . Theiry try to bring supply chains back inhouse . Back into their own countries . Do you see a reversal of globalization . How hard is ago . There are shortterm and mediumterm things. I think it is very likely that you see shortening. You see china shrinking. You see capital becoming more parochial. We have seen this trend for some time. This will accelerate post coronavirus. The markets are pricing in very few risks. Be buying some protection. Tariffs are once again coming to the table. Perhaps there are some Semi Conductor stocks in the u. S. That are on level. Matt thank you very much for joining us. Our guests will join us a little bit later. You want to hear more of that conversation, turned into bloomberg radio. You can find it on the internet. Up next, signs of life return to the english Property Market less than a week after the government allowed the market to reopen. We are seeing clues that momentum is building. We will speak to a sales director. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Anna welcome back. A solid session for risk assets it would seem across the European Equity space. All stocks are up by 1. 8 . Making gains across the European Equity markets. Up. Through the session, we took off at the start. And we hung onto those gains. U. S. Features looking positive. We have been focusing on the sectors in the upside. Assets. Volatile risk oil and gas, auto and parts. Get the plume bird first word news. Here are todays top stories from the terminal. The u. S. Economic recovery could drag on until the end of next year according to fed chairman Jerome Powell. He made the comments in an interview with cbs. He said the recovery hinges on the arrival of a vaccine. Astrazeneca is aiming to make 30 million doses of the Coronavirus Vaccine by the september. They are committed to delivering 100 million doses this year. The u. K. Will be the first country to get asks us access to the medicine. The vaccine is being developed at Oxford University. The business secretary says it is getting over 65 Million Pounds to fund it. Japans economy sank last quarter, falling into a recession that is only likely to deepen. Households limit spending and Companies Cut investment, production, and hiring. The economy shrank 3. 4 for the three months. Analysts see and over 20 . Contraction global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Anna lets talk about the u. K. Housing market. The English Housing market. Early science show activity returning to the english Property Market. They were back to prelockdown levels as of last wednesday when the government allowed the market to reopen. There were 4 more visitors the same day as a year ago. Joining us is a commercial director. Time, there was pentup demand in the market from home movers, buyers and renters coming back. Give us some numbers, some indications of just how we compare to this time last year. 5. 2 million visits. Obviously as we went into lockdown, we had the best start of a year for four years. Then the Business Market was curtailed during lockdown. A lot of people looked at their homes and their new lifestyles and said, this does not suit me. Sales inquiries only 10 below the figure we normally see in the market. People are not just looking, they are inquiring for sales to happen. A doubling in the number of properties they came onto the market on that first day. The pentup demand. For a new looking place here in berlin. I asked the Real Estate Agent and she said, the markets are doing a lot of action right now. A lot of business. My question was, are there people who as a result of this crisis are forced sellers . Do you see that in london . Not yet. Obviously it is the early days. This is a noneconomic underlying reason. There are policies such as the Job Retention scheme that should lead to the larger restoration of employment. A normal route out of recession. It depends on lenders. If they are showing forbearance, like they did in 2000. Then you dont get see forced sales. There were some people who have to sell. Not see that kind of recession. We did not have large price rises going into this downturn. It is not typical in terms of previous downturns. Anna we have seen a modern jump to our lifestyle. Many people working from home and ways they had not previously expected they were able to. I wonder if you are seeing signs of a more permanent change in our lifestyle. Our people less interested in being near transfer connections . More interested in extra bedrooms for study . What will be the changing pattern of demand . This is fascinating. Vaccinell hoping for a to make travel restrictions shortlived. Joy enjoy not meeting. Demand. An effect on we have already seen people you arefor places where further away from traditional commuting towns. Country sides. Search looking for versatile accommodation where there is homeworkspace. Matt we saw commercial real estate being built up at a record pace going into this pandemic. Will there still be a need for that . We hear from people that a lot of the workforce can continue to work from home. It has been a reset. Butonly of peoples habits in terms of thinking. Whatusly it depends on industry and productivity. Work from home means the less demand for commercial office space. It will be fascinating to see how that works out. , they have a team working may decide to get together once a week physically for a meeting. The other four days could be at home. You can rotate and hop desks. Less demand for office space. And. The associated things around that it is the very early days yet. These are the Things Companies will be thinking of. How is the move toward virtual viewing going . I guess there has been problems. Do ateople will need to least one physical viewing, wont they . Isthe government advice wherever possible you should to virtual video viewing. Your initial viewing of the property. Obviously, this took everybody by surprise. Agents need to go out and build a library of viewings. You can do that pretty easily. That will help. Agents can become more efficient. Less physical viewing, more virtual viewing. That means when you go to physically view a property, you are a more serious buyer. Quite a change in agents working. Economy. S the wider thank you very much for joining us. Changes in the Property Market. Next, European Market regulators and the shortselling band. Ban. They issued the end of the van ban. This is bloomberg. Matt welcome back. This is the european open. We are 42 minutes into the session and we are looking at decent gains across risk asset. Ftse. On the dax index and regulators across europe have been announcing the end of the shortselling ban. Authorities have jointly decided to ended, which had been in place since the middle of march. Securitiesk regulator had said it was put in place due to the violent and unprecedented selloff. Thank you for joining us. See as a result of this ban . Do you think it was really helpful in the market . Are you concerned that you will see a spike in shortselling . I will be prudent at this juncture. I am looking at the postmortem. It was both unprecedented. It was global. Covering the whole national market. It was unprecedented. Counterfactual. Others with no restriction. There is some very useful research. Efficient. Ul, at this juncture, what i could say is these restrictions do not have any detrimental effect. In the specific circumstances. Good morning to you. We have seen other countries have decided to lift their band this morning. How important is it that European Countries move together in this . European countries were facing the same situation. Some of them decided to implement restrictions. Others did not. Facing the same situation, it that anyy clear for us lifting of these restrictions should be done in a coordinated way. The situation is not different in spain, france, belgium, austria, greece. At the last moment to do it in a coordinated way. Matt are you concerned that it shortselling . Ban aspect takes a cushion away from a drop to come. There is no one to cover shorts. Of course. Clear that this is an activity that is part of the functioning market. The European Regulation is very clear. Developmentsher that continue to pose a threat to Financial Stability and market confidence. These restrictions will be temporary and taken in order to prevent a decline in financial instruments. Restrictions could be necessary. ,f you look at the regulations they are fixed possibly tensioning natural disasters are a possibility of triggering these restrictions. They are by nature temporary. That is the liquidity. Of the market we need shortsellers. Here, as a got you market regulator, i wanted to ask you your thoughts on any changes. There has been a lot of talk of revisions to help the eurozone economy recover from the pandemic. Do you think that Research Unbundling or anything else ofuld be revisited because the difficult situation the european economy finds itself in . We are clearly advocating for changes. Targetse some urgent and changes that are needed. Is oneu are referring to of our main challenges. Increase capital issuances in our European Companies . Now, it can only be part of the story of the recovery. We need capital. Point, this could be enhance theorder to possibility of rising capital. The unbundling of research. We cannot decide to rapidly move on it. Whicha regulation restructures this industry. We are advocating for some changes. But no radical ones. Truly fascinating stuff. I hope we can get you back. It has been great to spend some time with you. I hope we can talk with you again in the future. Talking about a range of topics with us and very interesting stuff. I want to get the Bloomberg Business flash. Here are the top corporate stories from the terminal. Boosted liquidity. Europes biggest lowcost carrier is reducing passenger numbers by half over the next year. The company aims to resume flying in july. The future of its austrian unit is in doubt. They are expecting a price war. Softbank is doubling the amount of shares it plans to buy back. It will now repurchase as much as billions of dollars worth. It also announced changes in the board as well as the resignation of the alibaba founder. They will sell a significant stake in tmobile back to deutsche telekom. Saudi arabias sovereign worth fund is denying it will sell some stake in softbank. The Investment Fund was looking into a margin loan. They say they have sampled liquidity and are not planning or considering the move. That is your Bloomberg Business flash. Up, does Value Investing still matter . That is our question of the day. We will talk about that. This is bloomberg. Matt welcome back. This is the european open. We are almost an hour into the session right now and still seeing strong gains. Gaining. K assets are lets get into the markets. What is the reason for all of this optimism today . Seeing is are european stocks are building off that u. S. Session rally that we got friday. They are focusing on the success in lifting lockdowns. We are seeing more European Countries begin to emerge. From these restrictions. And lower mortality rates. Early signs that this is becoming successful. Markets are hitting the stimulus efforts. We are seeing a plethora of Central Bank Speakers come out and say they will do whatever it takes. This is dominating the undertones of a more somber outlook. The recovery will be long. There is a lot of uncertainty that still remains. Anna . Good morning in that context, it is interesting to think about where Value Investing goes. You have been asking whether value really matters. Things were moving around so quickly in march and april. It must have been difficult to get a meaningful sense of value with any conviction behind it. What is the thought process right now . We did see value stocks underperform when we saw the april rally. We sought the growth index approaching highs. I would not expect to see this rotation away from these Growth Stocks back to value, given the fact that we are seeing heightened uncertainty. We do not know what shape the recovery will take. If it will prevent a liquidity issue. Clear that this is the new trade. When we look at what underpins this momentum, it has largely been the tech sector. Earning momentum has held relatively firm. I do not expect that that will pull away at this stage. Long as we see reopening become successful. Nasdaq is at four times the value of european equities. There are headwinds there that would need to make a compelling case to shift into those value trades. Anna thank you very much. Joining us on a day when European Equity markets seem to be enjoying this morning. In terms of where we had from here, u. S. Futures have also been pointing to the upside. Watchit is interesting to everything rising apart from fixed income right now. We see gold rising with steel and copper. Join me for my radio program. Francine the big ifs powell says the recovery could drag on through 2021 as long as there is no second outbreak. Astrazeneca Boris Johnson warns the country may not be free of the virus for some time to come. The bank of england today marks the first meeting of the governing party since the start of the coronavirus