Coronavirus cases top 2 million in the u. S. As the number of infections rise in texas, california, and florida, all recently reopened states. Not even thinking about thinking about raising rates. A dovish jay powell sends global stocks and treasury yields lower. Most fomc measures see rates zero through 2022. It raises concerns about the real state of the economy. Nd capitalizing on chaos Goldman Sachs makes 1 billion from the oil market turmoil. Drivingp sees its bond trading revenue. Big on europe. We are seeing futures. 2 losses point two losses on the indexes. Most of the major indexes were less than 1 . Drops in the u. S. After that fed meeting. Jay powell saying hes going to keep rates at zero through 2022. It looks like the market is now concerned about the strength of the underlying economy considering those comments. U. S. Futures down 1. 5 in terms of the dow and the s p. Anna in terms of the underlying economy, concerned also about the rise in the rate of infections in the united states. The futures picture looks fairly negative. By Australian Market down more than 3 . Other markets not far off 3 . The japanese nikkei down 3. 8 . Resurgence trends in the dollar. Days and days of dollar losses have been part of the theme of recovery we have seen for risk assets. Now we see a reversal. The dollar is considerably stronger. A host of other currencies moving to the downside in response to investors seeking safe harbor, perhaps, in the u. S. Dollar. A classic risk off system across asset classes. You saw that in the press conference with Jerome Powell yesterday. That continues to be a theme through the Asian Session as well. Oil prices weaker as you can see. Risk assets reacting in that way. Let me just get to some breaking on the g through some breaking news coming through from unilever. Unilever has emerged, this is the u. K. Arm and the dutch arm of unilever, the two headquarters if you like, planning to merge and unify the groups legal structure. Unileveron under the plc is the best option. No change in dividend policy. Y will apply for an added interesting to get these comments at the same time they are giving a q1 sale flat as ignore that bit. That is older. Let us focus on what they are saying about unifying the Group Structure. We will get further updates on that. We have been talking about risk ,ff, global stocks retreating fear of a second wave of coronavirus in the u. S. Lets get to mark cudmore. Good morning. It does seem as if there is nervousness around a second wave in the united states. You have been talking for a while about the way the numbers ngve been taking ticki up. If we are talking about a second wave in developed markets that had reopened, we could see a game changer. I think that is true. There is debate how much this is a second way for the fact the u. S. Never got on top of its problem in the first place. In the u. S. You have to remember a large majority of the numbers were from new york. New york has done a great job of controlling its virus program, but most of the country never got on top of those. A surge in some states like texas and florida which had seen reopening. I dont know if they got it under control in the first place. We are not yet seeing a big problem in those countries that have done a good job with the virus seeing a second wave. But yes, as we talked about last week, global case started reaccelerating from around may 18, which would apply that from around june 10 we should start getting fatality numbers up. The number in for tallies, the trend started higher monday on the seven week, 14 day, and 21 day moving averages. We are seeing that trend picking up across the world. I think thats why we are going to get this virus pessimism returned to the market over the next week or so. Matt it is tempting to pin the drops in yesterdays cash trade in the u. S. And asian trading futures on the virus concerns, but this all happened during the feds press conference, mark. It is interesting that when jay powell says we are going to keep buying 80 billion in treasuries, we are going to keep rates at zero through 2022, we are not even thinking about thinking about raising rates, and then you see stocks tank. Why would that be the case . Im not sure it has tanked. It has come up little bit. The fed delivered what was expected. Battle. Oing to be a we are seeing equities lower again. There were a number of reasons why the market was likely to come lower this week. One was we had just seen capitulation. The jobs report last friday. The nasdaq going to a record. Suddenly the shorts were out with less force buying. Now suddenly we have a resurgence of the virus, scaring markets at a time when we are more lightly to get, and the market the fed was saying it was harder to surprise positively. It was more likely they would disappoint. I think it is exactly the expectation, but we go back to the underlying trend, where we expect profit to last for a week or so. This is not a return to lows in equity markets. It is just saying we have had an incredible seven or eight weeks of gains in the equity market. Youre talking about the equity rose 2 rash, the s p where it was five days ago. Equity futures are still up. Really we are just taking some of the sheen off. That will be the trend the next week or so. We will see u. S. Equities lower, theres no panic. Nejra anna what is the markets live question . The shortterm markets retreated into dollars and into treasuries. What are people saying . Think the fed did not really change the game. They did not disappoint the market, but they did not surprise positively, which means you are going back to what you are thinking going into the meeting. Perhaps the one asset that has an extra boost from the fed is gold. I think they delivered a perfect storm for gold in terms of, they are saying, look, we are going to keep rates superlow, we are going to keep buying mbs, keep buying treasuries. Also, to emphasize the gold trade, we are seeing that virus fear pick up again. I think suddenly gold is getting all the quantitative easing boost and it is getting a little bit more risk aversion boost at the same time. In the last few weeks, gold in dollar terms has stayed high. Gold in other currency terms has been decimated. It has been a terrible few weeks in nearly every other currency terms. Now i think gold is ready for another week higher in the wake of the fed meeting. Matt mark cudmore, bloombergs mliv managing editor. You can join the debate on todays question of the day. We are asking, what is the best opportunity after the fed reach out to us, reach out to the mliv team. You can do that by typing ib tv. Let me get back to a story that anna was just breaking moments ago about unilever. There are a number of companies that had a dual headquarters structure and trade in different exchanges, most likely for tax purposes. Sda is one. Shell is another. Unilever was one of the biggest. It plans to unify its structure under a single Parent Company. Unilever says it will do so by combining the london and amsterdam share classes. It is going to be increasing its strategic flexibility for the portfolio evolution. Im using the pr speak in the story. Removing complexity and strengthening unilevers corporate governance. We will continue to bring you further updates. Urther updates. We are prepared to do what it takes and to stay the course with a very expansionary economy of policy stance. Outcomeere is a better in the economy, they will reconsider. There is no guarantee the policy rate will be a zero for two and a half years. Pretty clear they dont see any need to pull back for any of those Financial Stability concerns. That is just reinforcing the zero rate policy. The signal was, we are not going to let companies fail, so you may as well jump in and get involved. You do not want to undermine the economy to deal with what might be a bubbling equity market. There is at some point in time you have to think about what that means for broader Financial Stability. They are not there yet, but i would not be surprised to see them get there. The fed should stop pulling punches just because a lot of benefits are going to shareholders. What it really cares about his maximum employment. The fed will play its part but it is not the only game in town and im not sure it is the permit or game in town at this point. Reacted tohow guests the latest Monetary Policy decision. Sent an Jerome Powell message that the central bank will keep pumping stimulus into the u. S. Economy until labor market has recovered from the coronavirus pandemic. The fomc says it will increase holdings of treasuries and mortgagebacked securities at least at the current pace and hold rates at zero through 2022. We are joined by the cohead of Capital Markets at Deutsche Bank. Henrik, thisting, is a strong message by Jerome Powell. As a central banker, committing yourself out another 18 months, this is a big step. You are removing optionality. In a sense you are tying your hands behind your back. Otherwise you risk a situation down the road. Exactly. It is mirroring with the ecb said last week, which is that the Central Banks are going to do whatever is necessary to stabilize markets. If you look at the message, there is both a bad and a good thing there for the markets. The bad thing is clearly the central bank is going to face much longer than six months. The good news is they are committing to stimulus, which is part of what the technical is in markets. It, tonteresting, isnt see the market react to both of those thoughts, to have to go through that process. I wonder what you think of the tools the fed has available to it. Is yield curve control something those that you talk to think is realistic . Is it happening already or is it inevitable here . It is interesting. I was looking at the charts yesterday. Andou look at credit curves yield curves in the u. S. , generally they are steeper in the u. S. Then you have in europe. That is because there is less stimulus at the middle and the back end of the curve. There is absolutely more they can do than flatten the curves if they need to. Options. More policy anna stay with us. We are going to continue our conversation shortly. The cohead of Capital Markets at Deutsche Bank stays with us. Coming up, m a. Takeaway beats uber to acquire grubhub. We will talk about m a and other trends we are seeing in Capital Markets. Ital markets. Anna welcome back to European Market open. Looks as if the start of the trading day will be down. Concerns about a second spike of the virus in the u. S. A slightly gloomy assessment of the economy recovery prospects from the fed. Lets talk about m a. Grubhub. Com is buying for 7. 3 billion. The deal creates one of the worlds biggest Food Delivery Companies at a time when the coronavirus is driving a surge in orders. Henrik, i guess this is one of the sectors the m a team at Deutsche Bank would be looking at for resilience right now. Perhaps no surprise we see m a there. What is the outlook at the moment . A veryink you are seeing quick resurgence in leveraged biopsies, which is unexpected. A month ago, most of the sponsors we talked to were focused on their own portfolio and cutting costs. There has been a 180 turn. Most of them are thinking about unspent capital they have, looking to deploy it in a wide variety of sectors. Online intech is the most successful sector of the locked, but with the private approach last week by Consortium Private equity, you can see telecoms is another one where theres a lot of interest. If the world is awash with cash, the corporate world at least, and wealthy individuals as well, with rates at such a low level and Central Banks basically printing money to use the colloquial phrase, do you think inflation is a concern at all . I think it is a great question. It is related to the unspent capital the private equity firms have. Every type of asset is getting inflows of the moment. The inflows and returns of the bond market are back to above where they were at the start of the year. On the Capital Market side, being the most frequent issuers right now, we are seeing volumes of more than 50 . We are within 52 billion of the fullyear numbers for 2019. Clearly that amount of money being created could drive inflation in a normal economy. We are not in a normal economy, though. Isa not think consumers and corporates are going to be spending a lot of money. , theast in the short term fear is deflation rather than inflation. You seeat role do private equity playing here . Formerlyo paul zucker, a mpc. He now has Risk Management responsibilities. He was talking about how private equity has been bailed out twice in two consecutive crises. I wonder if private equity has the image rehabilitation goal in mind here. Play . Le can p. E it is another great question. Has turned into a broad asset class. Andsed to be very nichey you get accusations of looting. If you look at the part of the economy that is owned privately, not just equity companies, but investment groups, it is about the world across the world. It is a reflection of what is going on everywhere. Some companies are being supported and getting equity injections. Others are dissolving. But i dont think it is anything particular about private equity. Another sector when you talk about reputation, banks, after having been through a very rough time obviously in the financial crisis and being bailed out, the good thing is working in a bank right now, banks have done what they are supposed to. Geting very hard to try to cash to clients that need it. Matt Deutsche Bank yesterday said Second Quarter low loss Loan Loss Provisions were 800 billion. Every bank has been boosting Loan Loss Provisions like crazy for obvious reasons. Are you concerned that we are going to see a wave of bankruptcies, especially among the small and Mediumsize Enterprises that are so important to the economy . Absolutely. That is where the real disconnect from this Financial Markets and main streets. When you look at what markets are doing, they are setting new records. I agree with your correspondence. This is just a little bit of a extraordinary we have seen. It is not reflecting the concerns i and many people have about the state of the midmarket who are not able to access equity or Investment Grade bonds. That is where the paid is going to concentrate. Areprograms that exist doing their best, furlough programs and so on. Wave still going to be a of defaults out there. That is why Central Banks are so focused on keeping the support. Anna we had a guest yesterday talking about small and Mediumsized Enterprises finding it difficult to get the money they need. , we have seennies quite a lot of that in europe. Do you see that continuing through the year . Unfortunately for us, we are at a peak. In eurosion issuance for 2020. The second half is going to be less busy unfortunately. A lot of people that need money have already gotten it. Anna matt it has been great having you with us. Appreciate your insight. As we see these big moves by Central Banks as well. We are going to talk more, focus on the u. K. Next. A long list of potential mistakes in Boris Johnsons lockdown strategy. Lockdown strategy. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Anna half an hour until what looks to be a very negative session in the European Equity markets. Ftse futures down by 2. 3 . Considerable weakness at the start of trade. We will look to that and also u. S. Futures similarly moving lower. Not quite the same levels, but still, down. Futures down by over 1. 4 . Inl look for any those. In terms of the agenda, Angela Merkel speaks with the chinese premier from 9 00 a. M. London time, strengthening relations is the key topic of conversation. We get the italian Industrial Production data add 10 00 a. M. After slumping in march, april is expected to be tougher for the sector due to strict lockdowns, of course. In the u. S. , weekly jobless claims at 1 30. Figures have been coming down but they are still at extraordinary levels. Ministers arence meeting to discuss the eu recovery package as well as who will be the next president of the euro group. Football or soccer depending on where you are, fans will be pleased to learn the game is back. Today is the turn of spains league to kick off. Been watchingas german soccer. 70yearold professor in ohio watching german well, football. People need sports. The pga comes back today, so i am pumped about that. That starts, what, 8 00 a. M. In the u. S. , i think, 2 00 p. M. Here. I think im just going to see how long i can subject my wife to golf this afternoon. Now, Johns HopkinsUniversity Says the coronavirus cases in the u. S. Have reached 2 million. Moreumber of u. S. Cases in than double those reported for brazil. The country with the second highest number of infections. Localized surges have raised concerns among experts about a new wave of cases as many states ease social distancing rules. Joining us to discuss from new york is annmarie hordern. Run us through the latest pandemic numbers and the commentary. Everyone is just focusing on the fact that in the u. S. , cases have topped 2 million. There is one thing we should note. On the national scale, the cases rose by the smallest amount since march, but there are pockets and there are certain states we really need to watch. Thats what the numbers are starting to show. This is the worry about a second wave. Dr. Fauci saying we are not out of this yet. Texas is one of them. They reported more than 2500 new cases. Highest oneday total ever. Arizona seeing an abrupt spike. Patients are the highest since may 15. Well we cannot draw a direct line because georgia has been quite puzzling, about a month and a half, georgia has been open, yet their numbers have plateaued. It is fair to say medical officials are worried about a second wave hitting the united states. It seems there is ethnic inequality, much talked about, at least, awaiting further research when it comes to vulnerability to covid19. There is also any quality when it comes to being subject to job losses in the united states. Something Jerome Powell picked up on. Jerome powell talked about this because he talked about the fact we are seeing unemployment in america disproportionately affect black communities, disproportionately affect hispanics, as well as women have borne a notable share of the burden. You can see in this chart we see black unemployment rise faster than for white americans. Before the u. S. Economy shut down, black Unemployment Rate was close to a record low relative to white on employment. The ratio typically widens when we have recoveries as white americans are hired back quicker. This is going to get a lot of attention because the u. S. Is having this discussion about Racial Injustice, inequality, as we still continue to see protests take place around the world. Britains top scientist mounting a very public challenge to the prime minister. What is the story . Frank commentary. It was live on television. You saw Boris Johnson under pressure from one of his top medical chiefs, saying basically kind of calling out Boris Johnson or the government for their long list of potentially flawed decisions. Regrettted his greatest was the u. K. s slow response, also adding pressure to Boris Johnson, he had a critique from Niall Ferguson, one of the early scientists to work on the modeling. He said if they acted sooner, theu. K. Could have half death toll. A devastating death toll with more than 41,000 deaths so far. Under the government pressure from top scientists and medical officials in public about their response. The medical officials saying they want to review what happened. Anna a lot to cover. Thanks very much. Annmarie hordern keeping watch for us in new york. The bank of italy governor has been talking about how the central bank is so active because Inflation Expectations have declined so fast. This is a theme we have been talking about. Low Inflation Expectations since the ecb meeting last week. Speaking to francine lacqua, he started by commenting on the italian economy. Clear the country funds have made a number of statements. Right, a and it is long time that reforms should take place, but it is not there is a purchase lagging behind. You need the funds to increase the rate. There is certain Monetary Policy that cannot increase. Purchasing that is for level reasons, to increase the level. Reduce the gap. Of thehe possibility economy going back to employment that is sufficiently high. That is not a substitute for measures that increase the rate of growth, productivity, innovation, and all the improvements the economy needs now to face the effects of covid. What is your opinion on italy using emf funds . I give testimony in parliament a few months ago before the covid started. Clear they t is the funds come without strings attached. It is clear they have to be used. It is the only requirement. Reason. See any this is still alone rather than being alone in the markets, alone with respect to europe, but it is loan. Im getting quite a bit of on unwinding special measures. When will this happen . Ecb balance an sheet increasing the next five to 10 years . How do you see the timeline of this progression . Has tould say investment go on sometime. We still have projections that it will take years before we go price stability. Able to involve the in the case ofon now. This is a new instrument that we have. Banks survivetier with the second round of new nonperforming loans . Say, the first hasd of nonperforming loans been very difficult. Italy has been hit by the combination of the Global Financial crisis and the sovereign debt crisis. The real economy has suffered a lot. It has fallen by 10 . What we arethe way foreseeing post covid. If it is correct. Been a case, there has substantial fall in the quality of credit. I used to say that the italian system was was solid in its entirety. Obviously there are a number of pieces, and some of them did not manage to persist. System has gone through this very difficult period sufficiently well. , clearly we start from a much better position then years ago. The capital ratios of banks have doubled. Are backrforming loans to where they were. Matt that was the bank of italy governor talking to our own francine lacqua. Derby marksville the return of spanish soccer today. Postponement,onth teams broadcasters and advertisers may have to tighten their belts. We discussed next with a sponsor of the Champions League. Matt welcome back to Bloomberg Markets. This is the european open. We could see another day of losses. Dax futures down 2 . That would be the fourth trading day in a row of losses for the german benchmark index. Lets get the blumberg first word news. These are todays top stories. Unilever plane to unify its structure into a Parent Company and currently has unilever plc but the firmnv, thinks unifying will bring significant benefits. It is not planning to move operations or jobs. Takeaway has agreed to purchase grubhub. The deal would create one of the Worlds Largest meal Delivery Companies and it gives the European Company an entry into the u. S. Market. Uberurchase also sidelines which had been in talks to take over grubhub earlier. Commoditychs business has had a blowout start to the year. Sources tell bloomberg the unit generated 1 billion in revenue through may as its best start to the year in a decade. Much of the boost came from oil trading. Global news global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Hon closed doors. Here with us to discuss the impacts on advertisers is the Senior Vice President of marketing at mastercard. Mastercard is the official sponsor of the Champions League as well as the french open in tennis and the pga tour. As a business, how on earth do go about compensating for well, finding alternative outlets for your marketing, i suppose, when so many of these big ticket sporting events have had to be canceled . Thank you for having me today. As with any crisis, it is about people first. Given the fluidity covid19 playing outat is different ways in different countries. Differently. We have been monitoring the situation closely. The need for people to stay connected, we are seeing the increased level of engagement and participation. It will be one of the most important 2020 sporting events of the year. People want to stay connected even if it is a different format. The resilience of that level will be important. We are a Technology Company first. We have shifted our Marketing Strategy many years ago from traditional advertising to marketing. Already we have been the classes to include thousands of films, awardwinning directors. We have had a hybrid events approach for quite some time. Been working very closely to champion the passion of football, of the possibility of sponsoring an event. Certainly a passion for brits, europeans, everybody in the world, except for americans. Is that changing . Are you seeing more and more americans watching european football or soccer . I think you have seen that the last couple of years. That has been absolutely increasing. As a brand we operate in 260 countries. In each one of those, i am last night i watched a documentary, and they work very hard. They get together and they play football. It is a universal sport. It has the huge power to unite and excite. I think before covid, even, all have showns increasing interest worldwide, not only in america, of the sport. Matt i was just taken by the pictures here playing in the rain. I dont suppose they score any more goals. In the rain than the drawing. Then the dry. More and more events, more and more businesses talking about shifting to contactless payment. That must be important to you. Is there any other specific or main message mastercard wants to get across through its sponsorship of soccer . Absolutely. Contactless, that has gone up to 78 of hard transactions. Delivering that is very important. Becauseon we partner is billion consumers we serve, one of the main passions we have is football. In a moment of crisis like this, 25 years, the universality of the game, having a shared vision, how it can be a force for good in the world, we will always champion that. We will sponsor that kind of opportunity for our cardholders. Anna thank you very much. Thank you for bringing us your story. Minutes away from the European Equity market open and futures have been decidedly downward through the Asian Session. Now we see futures pointing to the downside, down by more than 2. 3 . For a talk about the stocks we are watching including unilever, the Company Plans to unify its restructure under a single company. This is bloomberg. Anna lets get dani burger, with your stocks to watch. Looking at just eat takeaway. Com, a recent merger itself, they are looking at buying grubhub. They would be cracking into the u. S. Market. Is u. S. Market getting share quite expensive, so this may be costly for them. They confirmed this late after the market closed yesterday. Today shares are called down 2. 2 . This is a difficult market to get into. We have been talking about this story for a while. They are offering new shares, trying to raise one billion pounds. Their hope is to be able to expand services as online groceries get more expensive. Those shares are going to be priced at a discount, called down by 5. 5 . A lot of really lockdown related moves there, or stocks that have benefited at least. Dani burger, thinks for your stocks to watch. Futures are pointing down. In some cases, way down today. The open is next. This is bloomberg. Anna a minute to go until the start of equity trading in europe. Lets get to your headlines. The second wave hits america, coronavirus cases top 2 million in the u. S. Infections rise in texas, california, florida. All recently reopened states. Not even thinking about thinking about raising rates, a dovish jay powell sends treasury yields lower. Members see rates near zero through 2022. To unify the Group Structure under a single british Parent Company, reversing an earlier plan to consolidate in the netherlands. We know that can go down well with shareholders. We will see what they make of this plan, and futures are gloomy. Matt it is pretty gloomy. Dax futures down 2. 3 . I looked and realized if we finish down today, this is the fourth day in a row for losses on many european indexes, including the broader stocks the broader stoxx 600. They have not seen severe drops, but if you see the dax fall 2 , it will go back to the levels int week, losing all we made half of this rally. Here is a live cash trade. The ftse down 2. 2 . A big drop for the ftse. A big drop for the euro stoxx benchmark index, and a big drop for the ibex. The cash trade is turning out worse than futures may have indicated. Arrows,aying big red on theof 2 or more three that have opened. Malanve the ftse open, down 2. 3 . When you get bigger moves, it takes a longer time for indexes to open up. A little more volatility tends to delay the settlements. You will wait a little bit to see the dax open up. The ftse down so far even as the pound falls, cable rate at 126. 73, over by more than half a percent against the dollar. Anna we have a red headline, the french banking business saying they will increase their plan to operate expense cuts. We see the Banking Sector weak in other sessions this week, and that remains the case, this stock down 4. 9 . Have an opening price on bnp paribas, trading to the downside. On the broader markets, European Markets opening lower after jay powell said the fmoc is no way thinking about raising rates. He said the central bank will use whatever tools necessary for his long as it takes to help the u. S. Economy through the pandemic. The economics have been your focus, but it is quite a risk off session this morning. I wondered if you could reflect on the last why four hours. We got a dovish assessment from jay powell, but that might have led to get into risk assets because there may be more support coming from the Federal Reserve that did not seem to happen last night and it is not happening this morning. It is a way to focus on the risk and second wave of infections . What is guiding risk sentiment at the moment . I think we have to accept we have had a good run of news flow over the past weeks that has come from a number of areas. In particular developments with the coronavirus, certainly the new slow in europe. Time we haveirst had some negative, and to put that into context with how far bear markets have come in the past few weeks, it is not surprising we get some profit taking at this stage. It does not suggest we are in for a severe down in markets. I think Economic Expectations are at the bottom. Ultimately that will come back that will because affect corporate earnings that will support the market going forward. , the does it concern you you think the messaging from jay powell and the fed yesterday was that the economy is expected to be so weak, or visibility so bad that the only thing we can do is promise to spend 120 billion a month and keep Interest Rates at zero through the end of 2022 . Comes aso not think it a surprise, the market is not relative to where most economic forecasts are. Surprise that they continue to see the level of gdp or take a significant amount of time to return to 2019 levels . Isen that, the level of gdp not particular a surprising the fed will keep policy extremely accommodative it will achieve its inflation and unemployment mandate. Opening negative on the outlook compared to where expectations are, i think that is the key point here. Ask about the quality of data we are getting at the moment, either in the u. S. Or elsewhere. My colleagues are remarking how cpi numbers may be measured correctly but you cannot rely on the basket that was is not a basket that is in a lockdown situation. What are your thoughts on the quality of data we are getting . Dean i think it is becoming apparent as more Economic Data comes through. I would not focus on the cpi basket, that is an area of concern given that how we can measure the Companies Selling these goods. Industry, we have become reliant on data. The reason is understandable, hike frequency, correlating quite well with the main indicators. But even here survey data seems to be sending challenging signals. Similar to the problems we had with cpi data, collection of the data. There will also be influenced from considerations of who is industries these as have been closed. Hopefully this can improve going forward. T makes our job harder the key thing to focus on in my mind is as the Economic Data comes through and we get these prints coming through, it is not the focus on the levels of the hard numbers we are getting, but the direction. The direction seems to be consistent with what we would expect given the profile of the social distancing restrictions an. The data is telling us we are past the worst. That seems to be consistent with the case. Matt that would be great news, if true, fantastic. We have more to talk about with you, dean turner, senior econimist, ubs private banking. Coming up, sterling recovery. Is there any more upside in the currency . Picksl get deans top next, and it is down a little today. If you like the pound, maybe today is an opportunity. In the united arab emirates, a sovereign investor based in upper darby has released its fullyear results for 2019. Its saw a big boost in 14 billionhit driven by the Strong Equity performance last year. Manus cranny spoke to the deputy ceo, we will bring you that full interview shortly. We are not looking to have excessive leverage in our balance sheet. When we look at our cash in the can easily meet our debt obligations. Matt welcome back to Bloomberg Markets european open. We are 12 minutes into the session, and looking at a loss drop oftse of 2. 75 , a 170 points to 61. 59. Bigger losses on the continent, the dax and the cac down 3 . The german index losing three headed 74 points back down 12,155. The Bloomberg Business flash, these are the top stories from the terminal. Just eat takeaway has agreed to billion. Ub for 7. 3 italy create one of the largest meal Delivery Companies and gives the European Company which us got together itself an entry into the u. S. Market. The sidelines,on which had been trying to take over grubhub for months. Unilever plans to unify its structure into a single Parent Company. The Consumer Goods Company thinks unifying under the u. K. Company will bring significant benefits. It is not planning to move operations our job as part of the change. Headed to ar likely lengthy probe of their merger plan after failing to offer early concessions, or refusing to offer early concessions in exchange for a fasttrack process. Sources told bloomberg executives see the European Commission expanding the investigation, pushing the deadline to october. The current target is to complete the merger in the First Quarter of next year. That is your Bloomberg Business flash. To deants get back turner, senior econimist, ubs private banking. Matt was mentioning the pound is down by 0. 6 . What your thoughts on u. K. Assets at this point . When it a lot here comes to the handling of the pandemic, the recovery of the u. K. Economy and the possibility of no deal on trade with the eu at the end of this year. Dean absolutely, a number of factors investors to be concerned about with the u. K. One of the things we are overlooking when it comes to the pound is some of the challenges the u. K. Faces. Sterling is a cheap and undervalued currency. We still take a constructive view on the pound. The problems we had ahead in terms of handling the pandemic, could not be worse than any of its peers right now. Dramatic underperformance. Clearly an issue back in focus this month. It is our expectations to deal with the outcome. Taking that into account, we can see sterling higher by the end of this year. Part of that story has to emphasize the view on the u. S. Dollar, and what we heard from the Federal Reserve last night and confirmation from german powell chairman powell is loose Monetary Policy. That will play into a weaker dollar through the year. Taking that into account, sterling could be back at this level by the end of this year. We had seen the bloomberg dollar index take a pounding, it had been approaching 1300 at the scariest part of this crisis. It came in yesterday under 1200. Do you expect further weakness in the dollar through 2020 . Yes, that has been our base case through the year. To convince changed us otherwise. One of the key factors that supported the dollar over the last couple of years has been is one of the few economies of the positive interest rate. It is an advantage dealing with dollars. , the carriedrd differentials between the dollar and other currencies looking ahead, as the Global Economy and , it is still more bounceto see a vigorous in the Third Quarter this year and a continuation of growth thereafter. Then the attraction of holding dollars over the next 12 months will become less for investors in our view. Much, dean you so turner, senior econimist, ubs private banking. He will talk to us on Bloomberg Radio as well and im 00 a. M. Up next at 9 00 a. M. Equity performance boost the sovereign wealth fund. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Down 2. 5 on european stocks. This company has a revised operating model and ruled move three management layers and is cutting 5000 jobs. One of the worlds biggest sovereign wealth funds says it is ready to use its growing cash pile to buy more asset. They have 230 billion under management and is looking into investments across the globe with the u. S. As a target area. Manus cranny spoke to the deputy cfo. Saeed equity markets play a major role, and we have seen a great recovery in 2019 for equity markets. And at the ended of 2018 with the volatility and equity markets, the markets have recovered since then. Overall we have seen great performance in different parts of our portfolio. Manus when you look at the cash pile, sizable how much cash are you sitting on , and can you use that for deployment . Saeed we need to look at the we havethe investment today. We need to understand there is an Investment Strategy and it has an Asset Allocation allocated for the different asset classes. Systematic,mething it is something based on what is given to the different business units. On the private equity side through the funds and core investments, or the Public Investment, which is sizable. If we look at the overall portfolio, Public Investment is 24 . Recyclinges a Large Capital for us. I look at your equity rates at 11. 8 , as the deputy cfo, to take that ratio higher, where is your Comfort Level going into 2020 . Saeed we have been prudent when it comes to the balance the. We are not looking at excessive leverage on her balance sheet. When we look at her cash in the liquid inssets highly public equities, we can meet our debt obligations. We have dry powder over the last two years, a lot of monetization in 2018 and 2019, and anticipated the market correction. But definitely not covid19. To some extent we have money from the Capital Market back in november, 3. 5 billion. , a strongry powder cash position where we are looking to deploy that across different sectors and asset classes. Is 7 billion the right number for you . , it makes sense when you return to the debt market in the second half of the year. Saeed you are absolutely right, if i look at the cost of funding on the money we have raised, it is 3. 2 , way too cheap for the issuances we had a few years back or relative to any Investment Company in the region. What our business is saying . Are you moving toward a vshaped recovery . About thee narrative recovery in a post covid world . Saeed within the group, the first thing we try to do with ande businesses is adapt ensure there is enough liquidity, especially Companies Impacted by the lockdown or covid19 because of the shutdown in operations. When you look at the u. S. Market today, the equity market has almost erased all the losses incurred from covid19. It now the question is, the real economy, will we see if i take an example, the u. S. Market, which is a huge market we invest in, i believe that precovid19 had a low Unemployment Rate, the lowest in the last 50 years. Systemic risk. Ny we see strong capitalization in the Banking System in the u. S. , and more importantly the u. S. Government as well as the Monetary Policy has been supportive of the Capital Market. It will go down to the next few weeks where we have unlimited data, are we going to see another lockdown . The economy will not close down because of the next election, so our eyes should be on the job creation and acceleration of job creation in the u. S. , which will increase consumer sentiment, which is 60 of the u. S. Gdp. Matt that was bloombergs manus cranny speaking with Saeed Mohammed hamad fares al mazrouei , deputy cfo head of mergers acquisitions, mubadala investment. Stuff. Teresting movers right now that we have in the market include unilever. It is combining into one entity in london. Currently it is a dutch and british, but it wants to give it another shot under one Parent Company. Fiat chrysler facing a longer psa that probe with may be are looking for, a drop of 5 on the index in milan. Lufthansa down by 10 . Writers says it has 26,000 employees, too many. The stock is being decimated. This is bloomberg. Anna welcome back to Bloomberg Markets european open. A half hour into the trading session and it is a week one. The stoxx 600 down by 2. 3 . 2. 8 . H ibex down by losses of more than 2 on the major indexes. Fears of the second wave in the and the ability of the u. S. Economy to recover. The guess we spoke to an half hour did not think the fed was more negative on the economic recovery than had been expected or the market had generally already thought. We see all the sectors in negative territory, and some ,hat have been on the rise value stocks that bounced recently, they are under pressure today. The banks down by another 4 down. Travel and leisure down by over 4 . Bloombergs get the first word news, todays top stories from the terminal. Starting with the fed, bond buying and zero rate are not going anywhere for a long time. That is the message chairman Jerome Powell gave us. It is a sign the central bank will pump stimulus into the economy until the labor market has healed the. Powell says the pandemic continues to pose considerable risks. Aboutare not thinking raising rates, we are not even thinking about thinking about raising rates. We are thinking about providing support for this economy. We think it will take some time. Most forecasters believe that. Matt japan and france have agreed the g7 should issue a statement about their worries over hong kong, according to japanese broadcaster, nhk. Tokyo and others have expressed concern about the new National Security legislation out of beijing. Shs commodities business had a blowout start to the year, sources tell bloomberg that unit generated over a billion dollars in revenue through may, the best start in a decade for the unit. Much of the boost came from oil correctlycause it was position for a collapse in prices. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna is it the feds assessment are the latest on the virus spooking markets . University says the coronavirus cases in the u. S. Have reached 2 million. The number has doubled for the numbers of brazil, who has the secondhighest number of infections. Concerns among experts that a easeave of cases as many social distancing restrictions. Joining us to discuss from new york is annmarie hordern. The latest numbers from the pandemic and commentary. We heard from dr. Anthony fauci who said it is far from over. The top line is the fact that u. S. Cases are over 2 million. One bright spot is the fact the infection cases has increased at the lowest level since march. But the data is showing it is about pockets in the country we need to look out for. Texas reported 25,000 new cases, the highest oneday total ever. Arizona, andick in hospitalizations in california at the highest since may 13. Remains,ion that Health Officials are bracing for a second wave, but is this linked to Economic Activity coming back in play . Georgia is an outlier. They have had a number of openings, and plateaued. That is the question people are starting to grapple with. Matt in terms of powell and the expressedhairman concern about inequality in the u. S. Jobs market. Annmarie it is not the first time jay powell has talk about inequality in the job market and in the united states. His comments had a lot more weight given what is going on in america. Really confronting Racial Injustice and inequality, and he said unemployment has gone up more for hispanics and africanamericans and women. In this chart we see black unemployment rising faster than for white americans. In earlyo widened stages of the recovery. White americans are being hired back quicker. The u. S. Economy needs to deal with this. A Bloomberg Opinion piece was put out yesterday looking at a topic we discuss every day, and that is the fact we have the disparity between Financial Markets and the real economy. He said in the feds own words, the wealth increase has a feedback on returns generated by acumen weighted assets. 60 of white families own stocks directly or through a retirement account compared to 31 for black americans and 20 for hispanic families. He said wealthy americans are the ones benefiting from the feds intervention across Financial Markets, but how does the fed respond is the big question. Anna back to the virus and the natives lose flow, britains top scientists are mounting a public challenge to the government strategy. Run us through the tension. I am sure you saw this press conference, a bit awkward in the sense that the chief medical official was basically calling out Boris Johnson as he sat next to him with a long list of decisions that will need to be reviewed. And the greatest regret admitted was a u. K. s slow response. We heard from Niall Ferguson who broke down the modeling of the outbreak, and said if they had acted sooner, the death toll could have been half. These are a lot of questions for the u. K. Government, compared to other European Countries that dealt with the lockdown and response to the coronavirus. Just excellent, although i think you are confusing the harvard historian with the british scientists, Niall Ferguson is the historian. We have Great Respect for both of those people. Annmarie hordern, thank you for joining us in what looks like a second wave in the u. S. Coming up, german logistics has acquirednnder its french rival. We get details from the cofounder and managing director, david nothacker. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are 40 minutes into the trading day and looking at the losses on equity indexes across europe and in the u. K. 141 points. N down. X in frank for some big drops across europe. Lets get the Bloomberg Business top corporate stories from the bloomberg terminal. Unilever plans to unify its structure into a single Parent Company. In thetwo legal entities u. K. End the netherlands, but unifying the structure under the u. K. Company will bring significant benefits. It is not planning to move operations or jobs as part of the change. The starbucks expects the pandemic to reduce sales by as billion. 3. 2 the coffee chain sees the recovery stretching into next year and expects an adjusted loss of up to . 70 per share. It also announced it is exploring new store formats in a bid to stimulate demand. Amazon is putting a oneyear pause on police use of its facial recognition software. It is a major course change for a company that has been a big defender of the controversial technology. Amazon plans to give lawmakers time to regular the software. The move comes amid protests against Police Brutality after the killing of unarmed black man, george floyd. Startup,gistics sennder, has acquired french rival, the deal will create one of the largest digital platforms in europe. The company aims to reach revenues of a billion euros by 2024. Both platforms connect Large Companies with small trucking firms, making it possible to have a diversified fleet to deliver their products. On the phone with us is david nothacker, ceo, sennder. Does thisof growth acquisition and able you to achieve . David thank you for having me. We are reactive in germany and italy before this acquisition. We have the ambitious goal of hitting one billion in revenue by 2024. This acquisitionmerger allows us to get closer to that target. Is it more opportunity for consolidation in the european trucking market . David absolutely. Huge and highly fomented. Trucks you see on european roads are run by companies that have fewer than 10 trucks. We definitely believe there is a consolidation opportunity here, and also with our platform and technology we are able to be significantly more efficient. Believe bringing whotechnology to players have operated without this technology can offer a winwin situation. Lockdownssume the were a difficult time for checking. Shipments were often allowed through borders, but it must have been more difficult. Does this reduced target prices . Is there anything else on your list that you may want to buy . David absolutely. The covid19 situation had a major impact on our logistics. The average number of kilometers driven dropped 35 . Gave theaw this opportunity to digitalized faster. A lot of offices closed down. We have a fully remote friendly approach and can continue operating remotely in a significantly more efficient way traditionally in the office , and struggled to move into this position. It has allowed us to grow through this time. Anna you connect shippers and carriers, do you think of business . S a tech david with the just also have to be operating and not just providing technology. , we are ablenology to be more efficient. We bring significantly more transparency to the market. Large enterprise shippers such with a small familyowned Trucking Companies that i mentioned earlier, and ,herefore cut out the middlemen and provide for the first time some basics such as gps tracking. It is a standard in many other industries, and something completely new in the Freight Logistics space. Matt i wonder what it is like to be a tech company in germany where Everyone Wants a paper copy of all your documents in andfic it triplicate, they just want cash. Is that changing more quickly do to this crisis . Maybe due to some stimulus out of berlin . David there are a lot of challenges we face to become digital and the end end toend. A lot of paperwork has to be submitted to us and our customers. But definitely this crisis helps speed up and increase awareness. A lot of inefficiencies have become more evident. That is why i think the digital effort will continue to push. Egislators to move difficult was it to do Due Diligence around this deal . It during theis lockdown when you cannot travel . David it is a very interesting experience. Through video calls and phone calls we were able to meet. Better than anticipated. There was strong engagement by the entire team. What surprised me most is we were able to build a personal relationship through this entire process, and having trust in this relationship is extremely important for the integration process. Therefore i am surprised how well this worked, and hopefully the right place to integrate and bring companies together. Position, you work with small and medium enterprises. Do you think the stimulus helpeds out of berlin Save Companies from bankruptcy, or are you seeing more than you have expected . David i think we have seen fewer bankruptcies than anticipated. It is a mix the good news is that markets and logistics are picking up. If you look at the past few weve seeing growth 5 we come week in terms of and trying tod, correct quickly. Quicker thanving we anticipated. Nowgs were quite slow, and they are going faster. We are increasing the size of the team and hiring strongly to fill this growth. Matt thank you so much for joining us, david nothacker, ceo, sennder, talking to us about the Logistics Company that looking upompany businesses and truckers. Up next, what is the best opportunity after fed day . We will put that question to laura cooper, our mliv macro strategist. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Upminutes into a beaten European Equity session. Ow by 2. 4 on the stoxx 600 a few of the movers, unilever combining into one entity. That is up by 1. 5 . 5 ,l is down by more than taking most of the points off of the stoxx 600. Underlying prices are off by 4 . Travel and leisure stocks, lufthansa falling by more than 8 right now. It is under pressure because of a report out conversation around what we are seeing in the equity market and how we are week for risk assets. Laura cooper is with us. What is your assessment on what is driving this lower, it fears from a second wave . One of our guests said the fed was no more gloomy about the u. S. Economy than his base case. Laura it is the combination of all that you mentioned. To what extent it could be seen as profittaking. We have seen indexes outperform over the past month. We are seeing a rising number of cases in major u. S. Cities that are starting to reopen like texas and florida. It does come down to the fed, and markets are disappointed in the sense that we are not getting more clarity in terms of details on the Forward Guidance going forward. I would expect this is more of a pause in equities than an inflection point. The fed is telling us stimulus will be in place indefinitely. This should embolden bondholders out there. Ripeonditions are right in equities as well. Matt what about the socalled second wave . We are seeing cases pick up in florida, texas, and others that recently lifted lockdowns. Potentially beld the key risk ahead for the equity rally to be sustained. Caution calling it a second wave, but where we are seeing infection rates climb is these areas that were struggling initially to contain the virus. If we look more to the new york and new jersey cases, they are keeping infection rates contained. Beyondo see that spread throughout the country, it could be a sign we will see a recovery, but ultimately the path of the pandemic will be crucial in determining the capacity of the equity rally to be sustained. That is something the fed alluded to. Thank you very much, laura cooper, our macro strategist. Stay with bloomberg for surveillance. Risk off across European Equity markets. This is bloomberg. Francine markets sink as the second wave of covid19 hits america. Cases top 2 million in the u. S. , as the number of cases rise in texas, florida, and elsewhere. Zero raise are here to stay. Managing expectations about the u. S. Recovery. And take away takeovers. Is buying grubhub in a 73 billion deal