The s p is up. The pmi data driving the euro higher. You are seeing a little bit of a market, buthe bond its not a big one. Its not really reacting in the same way that the rest of the market is. We have some great guests lined up. Hour, up later on in the the former secretarygeneral of nato and former Prime Minister of denmark. We will get his take on whether europe is capable of standing up to china. He wrote an interesting piece today. We will get more on that. Alix to start focusing in on europe and the optimism from the positive pmi, mike mckee joins us now to dig through the details. Mike, what are the highlights . The question would be why better ko not doing is why is france not doing better . Measure howxes Companies Think this month is compared to last month. It doesnt tell us anything about the level of activity, but it does tell us there has been some sort of rebound, particularly in france. The french manufacturing numbers are over 50. The Service Numbers are over 50. And there you have the composite data. Germany is only at 45. 8. The u. K. Composite number, 47. 6, but they are manufacturing but there1 manufacturing number is 50. 1. Is how doestion this last . Do we see continued rebound . The first 20 is easier to get to them the last 20 of the recovery. Germanys council of economic angela advises merkel. They expect to contract 6. 5 in 2020 and only rebound 4. 9 next year. They will leave the Economic Activity below the level they went into this year. ,f you look at the second half a lot depends on whether people feel safe and if we see a rebound in covid cases. We saw that in the United States. We had our pmi out today. It is still in the 40s. We are not over the hump. We have another question about whether people will go out shopping or to restaurants. Guy thank you. Mckee on whatke is happening in europe more broadly with the data around the world. Lets get more analysis on what is happening here as we continue to think about this data. A Market Strategist joins us now. Lets talk about the data. Mike brings up the point that the market seems to be generating stronger data, but in some ways, its not very logical. Useful are these data sets at this point in terms of giving us a real idea of what is happening with the economy . From the european point of view, data is probably secondary right now. As long as recovery continues without too many more widespread second wave lockdowns, they should be all right. The question now is, is europe taking concrete steps toward greater investments, and how can that grow . Are Equity Investors in particular looking beyond shortterm data to the long term . Is there a Sustainable Growth story . I think this is starting to happen. A great point, and we will get to the spending in a moment, but just to focus on av. E we are, it will not be are we actually in az that will only be accelerated a will only be accelerated . Its too early to say right now. I would go back to what the bank of canada said. V is not sustainable. Not everyone who lost their job will be able to get their jobs back. When that permanent displacement is clear, you will see the bounceback flatten a bit. It is not a w right now. That has markets confident. They are trying to slow that line and get that labor market back up to speed. Vs not going to be a natural. Can the government turn it into a v . That is the challenge. Is pressure to reopen the economy. Early on, we heard from the Prime Minister and his latest announcement when it comes to reopening british parliament. Johnson we will also reopen restaurants and pubs. Hallelujah. Johnson atrom boris 5 p. M. London time tonight. Jeff, just kind of walk me through what kind of impact you think this will have on the british economy. The british economy is something ofa laggard, but the bank england seemed willing to act earlier than just about any other bank on the planet. About comment yesterday forhaving a Balance Sheet the longer term is in discussion right now as global Balance Sheets are expanding. About taxring increases. Tighteningt physical going on. Austerity is not happening tightening going on. Austerity is not happening. Boris johnson has been clear. But that is something to consider up ahead. Was there is one argument i talking to somebody about last night that the british are being very cunning. They know if the ecb is going to continue to deliver policy like , the at the moment gravitational effects of that. Ill keep gilt yields low there will also be a positive effect when it comes to cheaper currency and its likely to make the same argument about the fiscal side. There will be a lot of leakage out of europe and a lot of that money will end up in the u. K. Is the u. K. Hoping for a free ride on the coattails of what is happening in the eu . It actually does work both ways. For a lot of economies in europe such as germany and holland, there will be fiscal slippage. Argument also make the that fiscal stimulus doesnt work in the u. K. In the pocketsy of u. K. Households, they will spend it on holidays in the mediterranean. Investment and leveling up the country is still on the agenda. Perspective, it hasnt really been effective lt perspective, it hasnt really been effective. International funding is still coming into the u. K. So, there is a delicate balance here. Can you even go to a pub outside . Is that a thing . Guy soon. Really soon. Thats a really big deal. Open4 is when they will the pubs, it looks like. Alix is it a pub if youre outside . Does that make it work . Guy yes. Alix ok, it counts. Ahead, wirecards ceo arrested after 2. 1 million goes missing. We will have the latest. This is bloomberg. I would say i have been most surprised by the lack of panic. The scenario you go through in , people are looking to put money in assets where they dont need them on a daily basis. They are ready and have enough liquidity that should we see something else, the smarter money is really ready to take advantage of that. That was mary erdos a j. P. Morgan chase. Wealth management ceo. Geoff, i was really interested in her take. No panic, cash on the sidelines. I was wondering if other factors like Retail Investors pushing equity higher if there would be some kind of capitulation here . A lot will depend on what the markets choose to respond to. I think overnight, the reaction to the trade deal between the u. S. And china shows you that this story is still very strong, even with the covid impact. The other risks to the market are still out there. I think we are still a long way from people taking cash from the sidelines. I think for now, volatility will to protectntrol, but longterm factors, i think is far too early. And a lot will depend on the election. That will be another factor as well. I read a lot of stuff this morning about how fragile markets are in how last night as an example of that and how last night is an example of that. Thehe same time, i look at states with hospitalizations rising. Over the data all shop. There are plenty of factors that could frighten the markets at the moment, but equity markets are driving higher. Is sentiment really that fragile at the moment . Seems soment, everyone scared of missing out on the rally and there seems to be plenty of money on the sidelines. I think theres powerful asymmetry with cash on the. Idelines right now its more show me a reason not to be in the markets than the other way around. I respect that. Pandemic, there are so many unknowns to factor into the models. There could be a lot of issues coming through on the fiscal geopolitics. People want to stay invested. I think we should watch, are people paying more for options . Insurancee bid for policies will be higher than we are used to and that will affect allocation as well. Thats compared to globally synchronized growth in full on response. Where does the dollar fit into that . Is the dollar a hedging tool or not . The dollar is a hedging tool and markets are in a quote unquote fear of missing out mode. At where europe is in the g10, look at , thatlia, for example could be another way. Oil and currencies. That something people are going to be looking at. The dollar will perhaps revert back to a funder. To be the. Starts leader in growth, that could turn around. The u. S. Is already heavily positioned in cash and equities. Guy thank you for joining us. We appreciate your time. , we are going to look at what is happening with buyer reports. The company has done a deal. By over 6 . Up we will have the details next. It is time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Up during theze pandemic shutdown, but record rates are pulling buyers back in. Sprint is merging with tmobile and plans to sell a 5 share of its Japanese Wild list wireless business. The internet giant rose almost 5 in hong kong. It meets alibaba as asias most valuable company. That is your Bloomberg Business flash. Guy thank you indeed. Asres in bayer jumping today the Company Announced it has resolved litigation over roundup weed killer. The phone tow on discuss this is tim lowe, who covers bayer for bloomberg. Is the Market Reaction and the stocks up by 6 today a reflection of this being a lower number than the market was anticipating or simply relief that it is finally happening, that these cases are being settled . I would say its more of the latter. The numbers have been out there in our reporting and elsewhere for a number of months. This is kind of the neighborhood that we are zooming in on. Risk that itl the spills over that number. That has been Holding Investors back is every time there is a new story saying progress is being made, progress is being made, people want to see it happen. Is more evidence that we are getting close to the finish line on this story. Alix where that money be used for every case ever out there, or is there a possibility that more cases are going to crop up, and what kind of money are we looking at for that . There are two groups of cases to be considered. There are the existing cases right now, and its not clear that bayer will have a resolution for all of those cases. In fact, we are reporting that there are still holdouts that need to be addressed. There are potential future cases, people who have used roundup products already but not developed cancer, and they may move down the line. 8 bayer is trying to put billion in the pot for existing cases and 2 billion for future cases. If they can resolve all of this ,or 10 billion combined investors are going to be relieved, i would say. Just a bit of history here, has monsanto now cost bayer . Well, the acquisition was 63 billion dollars to acquire the company, so then you have, if you want to tally up the total cost, you have to add on another potential 10 billion on top of that for all of this litigation. Are other loose ends out there. There are a bunch of lawsuits. There are some other hidden. Osts people at the time thought bayer was overpaying from monsanto. Smartinsists it was a acquisition and they are happy with it, but a lot of people have been upset with the price. Absolutely. And i guess you have to take the share price dropping into account as well. Like we may be getting close to a deal being signed on roundup. Back to what we are seeing in terms of the European Market today, we are seeing a decent story developing. Highs, but nevertheless, after the pmi data earlier on in some of the idiosyncratic stories out there, we do have a market. Wirecard is bouncing back today. We will talk about that a little later. Those are the kinds of things driving the data points today. European closes next. This is bloomberg. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Guy 30 seconds to go and we are nearly done in europe with regular trading. These are the final numbers. Morninged sharply this out of the pmi data, which was stronger than anticipated, and certainly shows europe delivering on a vshaped recovery, but something close to it. Are not necessarily that useful. Probably are useful for comparisons between regions within europe, but because we saw a big drop, we wouldve anticipated a bounceback. Things are not great, but maybe they are more or less great than they were previously, if that makes sense. Lets talk about what is happening in terms of the numbers. This was the session that developed. As ite are looking at started strongly and then faded. Lets take a look at the individual markets around europe. Outperformance in germany. Part of that is wirecard. You are seeing decent numbers. The car sector as well is quite strong. In terms of the sector breakdown , the car sector has done well. The Banking Sector has done well. In terms of the individual stocks, there are the sector breakdowns. You can see cars doing reasonably well. Wirecard is doing well. It has been battered over the last couple of days. Bayereve seen today is doing reasonably well. We have also seen the Real Estate Companies in the u. K. Under a little bit of pressure. We are getting breaking headlines out of larry kudlow. Alix larry kudlow speaking to foxbusiness news interview the direct mail checks are still on the table. Heard something similar from President Trump according to the Washington Post around 6 00 this from rescue to move to economic incentive and maybe the tax rebate will be part of that. Datant on to say no virus will require an economic shut down and Still Standing by the vshaped recovery. It seems to rule out another economic shut down, and talking forward, more stimulus checks of some kind. Equities on the highs of the session, and i have to wonder how much of this is after President Trump spat weekend President Trumps bad weekend and how they are trying to reset the narrative as we move forward to the election. Guy absolutely. Getting more and more interesting it still feels like an awfully long way away. Lets talk about one of the stocks i was discussing when is talking about the close, that is wirecard. The company is up a little bit today in terms of the share price, but down in so many ways. ,he former boss being arrested released on bail this morning, there are all kinds of questions still swirling. Advisory business for german stock owners joins us now. Thank you very much for your time today. What we are all trying to work wirecard a solvent company, and if it is not a solvent company from an equity point of view, that is what investors are fearing. That is a good question, what youre asking right now. We had asked to the prosecutors. They are investigating the country, they are in the company as well as the federal banking authority. It is also investigating the company cared whether the company is solvent, nobody can tell right now. Isseems to be the company some sort of solvent, but definitely they are missing 1. 9. Illion euros goo that is not a small amount. That is 25 of their Balance Sheet. This is a significant number and t. Have to wait the situation of the company is fragile. Ceo, the previous ceo turned himself in, was arrested, he posted bail. The first shoe to drop, i have to wonder in these situations, how many more people get wrapped up into Something Like this . It is difficult to judge right now. Is the counts in the philippines are not existing. The Company Discovered they are missing 1. 9 billion euros. It may be the company is the victim of a crime, of a large crime against the company, that somebody on the philippines defrauded the company. We are talking about a criminal case of balance manipulation. These are all the questions. Once again, the prosecutors are working. They are researching everything. Answers will be within the next two weeks. Shareholders you think shareholders will be able to gain much advantage if this is an insolvent company we do not know that yet is there much point and delivering cases against the business if we are to see the plug being pulled because it is insolvent . Klaus my law firm is already advising a bunch of institutional and private shareholders trying to claim damages. Situation asilar we had an volkswagen and other companies in germany. Enterprise drop down dramatically and the question is whether the company has cleared all of its publication duties under german law. And weinvestigating this are trying to come to a conclusion, whether the shareholders may claim damages or not, either against wirecard accountantgainst the who has testified all of the annual statements with the exception of 2019, the annual Balance Sheet before shareholders trusted in the work , therefore they also bought the shares and maybe they have damage claims on the terminal. Alix it was great to get that perspective. Laus nieding. We want to bring you headlines. A 7. 4 magnitude earthquake in mexico. We are trying to get more more updates as they cross. Guy we are seeing a reaction in the market. We are seeing a move lower in the mexican peso. Details on a clear. A large quake. We do not have any details at this point as to where was. Cannot extrapolate further in terms of the damage. Alix will keep our eyes on the headlines. For now we want to give you an update on what is making headlines outside the business world. Here is ritika gupta. Ritika a warning from dr. Fauci and other top health officials. For e preparing complicated by the coronavirus pandemic. They do not expect the blue to be mitigated by the vaccine anytime soon. The cdc has delta test can check for both viruses at the same time. Restaurants and theaters will open their doors from july 4. President trump has taken a recruit from is poorly attended rally in oklahoma. The president is visiting arizona and will focus on the issue that was a winner for him and 2016, border security. Arizona was once reliable trumpican state, but now trails joe biden. Diplomats in the u. S. Issued a proposal with members of the security council. The current ban on arms deals expires in october. 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. I am ritika gupta. This is bloomberg. Guy thank you very much, indeed. We were just talking about what is happening with wirecard. The german financial regulator coming out with new news, admitting an additional report saying it suspects wirecard reported incorrect revenues and assets. Paying attention on the missing 1. 9 billion euros. Also suspecting wirecard violated market manipulation band. That coming through within the last few minutes. Wirecard bouncing back but shares under similar pressure over last days. We are through the auction process in your. Opean equity markets art the auction process in europe. European equity markets are closed. Wirecard up. Wirecard at the time remains a member. We also saw bayer surging higher 6 . Boris johnson will be levering a press conference, we think it could be the last press conference in terms of the Daily Press Conferences and the u. K. From 10 downing street. Boris johnson will be speaking about what is happening in the u. K. And the lifting of the lockdown rules. Well cover that on the cable at the top of the hour on dab Digital Radio and on the bloomberg terminal. This is bloomberg. Guy welcome back. Live from london, i am guy johnson with alix steel in new york. We are continuing to monitor what is happening in mexico after a 7. 7 magnitude earthquake has hit the country. We will continue to bring you details as we get them. In the meantime, lets talk about what is happening in the global relations between the eu and china and the United States. The eu and china sparring over Video Conference yesterday, with the eu criticizing china over a multitude of things, including hong kong human rights, and in terms of how it has dealt with the coronavirus. The chinese president xi saying the two regions should speed up talks on an Investment Agreement. The Eu Commission president ursula von der leyen highlighting the need for progress in remarks after the summit. Continue to have an unbalanced trade and investment relationship. We have not made the progress we him for in the last years we aim for in the last years statement addressing Market Access barriers. We need to follow up on this commitment urgently. To discuss what is happening between the eu and china and what is happening more rasmussen,anders rasmusson global ceo. He is the former danish Prime Minister. Thank you for your time. We greatly appreciate it. A simple question. Is the eu capable of standing up to china . Anders i think so. Europe has been too naive for too long. I think theummit, eu is more realistic, and in my opinion, the eu should be very clear in its message to china. It will be no Investment Agreement until three conditions are fulfilled. Reciprocity. That means we will demand the same access on all companies to your market as we grant your companies to our market. Secondly, we demand a level playing field. That is, we will not accept subsidies from state owned Chinese Companies to compete with our companies, and finally we would demand better protection of our intellectual property rights. No stealing our technology. Great, but ats the end of the day, europe still need investment and they investment from china and they do sell their stuff to china. How do they draw those redlines . Anders you are right. Many European Countries need capital, need investment, and we saw that in the wake of the financial crisis. The chinese were ready to take strategically important european companies. This would not happen this time. The european commission, as well as National Member states are comparing screening mechanisms to avoid the chinese taking over strategically important businesses and infrastructure. Yes, europe needs capital. Europe is less naive than in the past. If europe will have to pick sides, if you think back in terms of history and what happened after world war ii in terms of containing the ussr, we had spheres of influence. The United States and europe acted in harmony and term of the approach taken largely in harmony. You think europe will have to side with United States . Yes. S ultimately, europe has no alternative. Europe must take sides. Europe must choose freedom and democracy. I saw the statement from the eu after yesterdays summit. Criticism of the chinese oppression in hong kong. Criticism of chinese oppression of minorities within china and tibet. Should benk the eu much stronger in defense of and support for taiwan. Europe must lose must choose in a fight between democracy and dictatorship. You must of course choose democracy. Alix when you put it in those terms, it is more stark. When you put it in terms they have to choose between the u. S. And china, i feel like he gets more money. There are tariffs thrown about between the u. S. And china comes to airbus and boeing. We have also seen u. S. Troops pulling out of germany. What is the incentive to choose the u. S. . Incentive is lyrical is political. If the west is divided, if there is a split between the u. S. And europe, then we are too weak. The autocrats respond to strength. They will exploit weakness and division, and this is the reason why for political purposes we need to stand together. When you go into the details, you always find something where there can be disputes. During the trump presidency, a lot of issues have been , but overall, if you look at this from a helicopter perspective, the u. S. And europe must fight together to ensure that International Norms and standards are set by the worlds democracies and not by the autocracies. See a trade war between europe and the United States . Do you see other areas of conflict between washington and brussels . Alix listed a load of them. Can weight be on the same page when it comes to security and Security Architecture and geopolitics if we are not of the same page when it comes to trade. Increasingly, these two things are intertwined. Anders i side with the americans when it comes to the dispute with china. I think it would be wise by the United States to cooperate with europe instead of opening a new. Rade war with Europe Europe has exactly the same interests as the u. S. When it comes to china. Lets join efforts. Lets put a maximum of pressure on the communists in beijing instead of starting a fight between the u. S. And europe. I think it is as simple as that. Alix what appetite do you feel for that . Do we have to wait to see that for november 4 of 2020 or do you think that can be managed with those in power today . Of course President Trump is a challenge. There is no reason to hide that. Autocratsthe worlds cross their fingers were a Trump Victory in the election because toolsee trump as a useful for their ends. What they want is to undermine the rulesbased world order and they see President Trump as useful tool because he is eroding the free world order from within. Obviously he is a challenge. We do not know the outcome of , butlection in the u. S. An alliance of democracies in the world where the u. S. And europe Work Together and reach out to australia, japan, south korea and other strong democracies. India. Thank you so much. It was wonderful to get your perspective today. Lots to work through as we head towards the election. , former natosen secretarygeneral. Thank you very much. A couple of things breaking right here. The former wirecard ceo apparently sold 141 Million Euros in wirecard shares. That broke over the weekend, but that seems to be a substantial margin call. Guy yes. That does sound like it. It seems like some this may have been used as collateral. Maybe theres a squaring of the books coming through. It may also be part of what we are seeing in terms of him being arrested earlier on and how we can post bail. That may be part and parcel to some of this. Maybe the timeline does not fit together. We also have the fauci headlines, worth paying attention to. Talking about the next two weeks being critical to address the covid spikes. Never been told to slow the testing. We will be doing more, he says. The coronavirus in the u. S. Is currently an mixed bag. That is probably a fair way of assessing it. Certain states have numbers north of 1, which means the virus is expanding. Testimony being delivered right now. Alix not what you want to see, the r number ticking up. This is at the house energy and commerce committee. The third piece of news is we are tracking an earthquake that was reported in mexico. There seems to be a few potential earthquakes, there may be ripple effects. We do not know. Headlines are indicating 7. 4 magnitude earthquake near santa maria. Another 1, 7 point seven in different areas of mexico. Some information coming out. Those are substantial strong earthquakes. Guy absolutely. We are also getting commentary from larry kudlow indicating china has been picking up its game. The trade deal is apparently on. Plenty of news to carry on the conversation with. Balance of power is coming up next. On the cable, well be taking Boris Johnsons press conference. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. David from new york to rtv and radiant audience worldwide, welcome to balance of power where the world of politics meets a world of business. A risk on appeal. Abigail doolittle explains how much is driven by tech. Abigail there is the risk on tone, the bulls back out. Last week stocks were higher. Over the last two weeks, basically in a range, especially the nasdaq. The nasdaq another record high, up 1. 4 on tech strength. Ironic about the take strength the tech strength. This year it is a defensive sector. , it ist tech is leading bullish and it is risk on. On the other hand there defensive tones underneath, apple and amazon hitting alltime highs. They stay at home presence is there. Interesting we talked about how apple is reclosing some of their stores