On a couple of data out of the euro zone. Markets also moving on the number of infections rising. Overall, the markets and european stocks edging up as the new quarter starts. Bonds are dipping. I am looking at European Equity futures. The one thing i wanted to show you was a golden earring nearing per ounce. Showed confidence amongst large manufacturers in japan. We will have plenty more on some of this data out in the euro zone. Lets get straight to the bloomberg first word news. The u. S. Is going in the wrong direction when it comes to the coronavirus. Thats a warning of Infectious Disease expert Anthony Fauci. He says daily case counts could more than double to 100,000 if behaviors dont change. He added clearly, we are not in total control right now. He declined to estimate the number of potential virus deaths, but said the total would be very disturbing. And the u. K. , Prime Minister Boris Johnson has unveiled his plan for the u. K. To build its way back to prosperity. The package it ran into immediate criticism. Opponents claim it offers no new money and falls well short of the roosevelt style new deal the government had touted the night before. The chancellor will set out more details of the Recovery Plan on july it. Almost 90 of americans are dissatisfied with the state of the country, according to a new study from the pew research center. The unhappiness is hitting the perception of president donald trump. He is 10 Percentage Points behind joe biden. According to the survey, 54 of registered voters back biting. 44 biden. 44 support trump. Thata holding a referendum could potentially tighten president Vladimir Putins grip on power. It would allow him to extend his presidency to more than 16 years despite his approval rate being at an alltime low as pressure reels from the coronavirus. The proposal is expected to pass. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Francine lets start with the latest from hong kong. Police in the city have made their first arrest after the new security law less than 24 hours after chinese lawmakers handed it down. China marking 23 years since the british hand over. Lets go live to hong kong and get more with Sophie Kamaruddin. What do we know about this arrest . Arrests that were made so far, we see two individuals arrested under the new security bill. Both of them Holding Signs displaying hong kong independence. This type of rhetoric comes under a new security bill, an offense perhaps given that 4 offenses were specified in this new bill, subversion of state power, terrorism and collusion with state forces foreign forces. 30 arrest have been madea, including for illegal assembly. Anna francine what are the specifics of this law . Does it give us an indication of how hard it will be on the citizens of hong kong and beijing . Sophie speaking first about the nature of the law, over six chapters and 66 articles. It outlines provisions to implement and enforce the punishment for the four offenses, within the most severe cases perhaps seeing life in prison. The Death Penalty was not introduced. What is a concern is the extraterritorial nature of the bill. Hong kong residents in the city and those abroad who fall afoul of the bill could find themselves perhaps targeted by this, as well as nonresidents in hong kong and abroad. That has some complexity when it comes to doing business here as well. Francine what are the implications for businesses . So with the nature of the protests that have happened over the past year, you have had more businesses in the limelight in terms of how they approach their operations here. Hsbc said they support the security bill. There will be a lot of pressure perhaps on falling in line with that. The underlying message would seem with the passage of this bill is to stay out of politics if you want to do business here. Francine what is the mood on the ground . What are we expecting later . Sophie well, it is 4 00 p. M. In causeway bay. Around me, there are hundreds of people who have gathered, largely peaceful. There is a heavy police presence. They set up cordons along the pavement. Big are trying to disperse columns of people from gathering. They have also trotted out some new banners warning people of who might be who might act against the new security bill. So the police here, they certainly have been on high alert. Arreststed earlier, two have been made under the new security bill. We saw pepper spray being used, a water cannon was deployed. We are keeping a close eye on what is happening on the ground. Again, largely peaceful here. Francine Sophie Kamaruddin in hong kong. Faucis warning. Singrns america risks 100,000 new coronavirus cases per day. Details next. This is bloomberg. Economics, finance, politics. This is bloomberg surveillance. Lets get straight to the Bloomberg Business flash. Airbus is planning to cut 15,000 jobs. It is part of the biggest restructuring in its history. About 10,000 will come from its main bases in germany and france. The company says output will be about 40 lower than expected for two years due to a dramatic slump in demand brought on by the pandemic. Fedex shares soared after earnings beat wall street expectations. The carrier courier said it held costs in check with a mix of job cuts and reduced company it is also delaying investments in some projects. Goldman sachs may be nearing a deal to resolve its biggest illegal threat in a decade. The wall Street Lender is hoping to avoid a guilty plea for its role in the 1mdb scandal. Prosecutors allege goldman helped malaysia raise money, some of which ended up being diverted to 1mdb officials and their associates. That is your Bloomberg Business flash. Francine . Francine thank you so much. The u. S. Is going in the wrong direction when it comes to the coronavirus. That is the warning of Infectious Disease expert Anthony Fauci. He told the senate panel that daily cases could more than double to 100,000 if behaviors are not changed. Dr. Fauci i am very concerned about what is going on right now, particularly the in the four states that are accounting for 50 of the new infections, but the other vulnerable states. The numbers speak for themselves. I am very concerned and i am not satisfied with what is going on because we are going in the wrong direction if you look at the curves of the new cases. So we have really got to do something about that and do it quickly. Francine joining us now is Andrea Iannelli, fixed Income Investment director at fidelity investment. When you look at your per folios, where you put your money, how difficult is it to understand the curve that actually a lot of these infections will take . Andrea it is definitely quite challenging. We are no virus experts. Markets have by and large ignored some of the less positive recent developments that we have seen. Have seenmis that we on the macro side have improved. Data and the virus data shows is that we are not out of the woods just yet. However, we have seen markets largely ignore all of the waiver ,riding of the very strong fiscal and monetary stimulus science, wave of the very strong fiscal and monetary stimulus. Francine do we do a correction at some point and what would trigger it, apart from a rise in infections . Andrea given how markets have been reliant on policy, any policy mistake that might come through from central bankers or any sign that the fiscal stimulus that has been predominant until now is coming to an end or is not going to be as pronounced in the future may be a cause of potentially in repricing. What we are seeing, as far as mixed income markets are concerned, fixed income markets are concerned, is that as these Consumer Companies have become more cautious in spending, the stock of savings that has been growing considerably over the last few months, which will continue to offer some sort of support to the market as the savings search for income into the higherquality asset spectrum. Francine when you look at what the ecb has done so far, how much more can they do from this point . Andrea the ecb has clearly deployed a large amount of support, has shown flexibility. They probably are going to have to do more, in terms of qe. It is unlikely that they are going to cut rates, to be honest. They have expressed the view that the qe program is their primary instrument in this environment. Doinghat they have been has been very, very good for the market in terms of support, as we have seen from the performance in peripheral spreads, credit markets in , despite therope challenging fundamentals. They have room to deploy. They can extend purchases, further increase them. They will certainly do so if the economy does not get back on track after and recover as promptly from the covid crisis. Of if there terms is any opportunities, for example, in some of the bonds in some of the european countries, and fragmentation is something tolerate,cb will not where do you see the biggest opportunities . Andrea we see the biggest opportunities in highquality credit at the moment. If you look at a corporate sector and Corporate Bonds and corporate in europe, they have been very careful with their fundamentals. They have not really been increasing leverage, something that actually governments have had to do. Debt to gdp ratios in many countries are going to be much higher in one years time then they were at the beginning of this year, for example. Valuations in financials in europe are still attracted, despite the rebound we have seen since the end of march. One does not have and should not invest into an area of the asue the ecbbec is buying because the ecb is buying and that every of the market. That is an area where we see value. If you think longerterm, we do think that where we find ourselves at the moment is that a case that is not so different in developed markets to where japan was, for example, in the 1990s. High stock of savings, high government spending. If we think about what that implies for markets, it was a rery strong period fo highquality fixedincome. That is likely to replicate itself. Francine Andrea Iannelli stays with us. We are following very closely everything that is happening in hong kong. Legislation passed yesterday by lawmakers in china, signed by president xi jinping, allows for potential life sentences for crime, including some of state power and collusion with foreign forces. We are live on the ground to bring you the latest developments. A conversation with former National Security advisor john bolton. He has written a book, you may have heard about it. That interview coming up after 1 00 p. M. London time. This is bloomberg. Is bloomberg surveillance. We have seen technical difficulties in some markets across europe this morning. Debt officefice postponing a Government Debt auction. The exchange is working to fix the issue. The manufacturing pmi reading for june came in at 47 point four, showing sectors still in contraction in the euro area. Italy preparing a new 20 million 20 billion euros stimulus plan. The spending would push the 2020 budget deficit to around 11. 6 of gdp versus the current 10. 64 goal. Andrea iannelli from Fidelity International is still with us. We are talking a little bit about some of the opportunities we have seen out there and we are talking a little bit about the ecb. If you look at the world worldwide, do you see opportunities for a more vshaped recovery or do you look at other metrics . Andrea i think we dont really think there is going to be a vshaped recovery. Impact of the crisis will still be felt for a while. We are seeing, as you have seen from some of the Largest European Companies like airbus, unemployment, the furlough schemes being in place will not prevent unemployment from rising. That will be a drag on growth. More generally, people, companies will be reluctant to go out and spend the moment that the lockdowns have relaxed. Because there is still an element of caution. There is still an element of precautionary saving taking place. That is going to take some time. Concerned,urope is there is also the argument that we need to think about how much longer the fiscal stimulus will willingness there is going to be going forward, particularly if the number of cases remains low or continues to fall, to continue pursuing fiscal policies. Something that, for example, in the u. S. Is much clearer. What do you do with treasuries right now . Andrea treasuries, we are not too worried. Ultimately, what we are seeing is two things. Treasuries do remain the insurance policy of choice for investors. Whenever there is a selloff in the market, whenever there is volatility, uncertainty, treasuries are the safe haven investors fly towards. Hand, as weother have seen, for example, in the last two or three months, yields in treasuries appeared to be capped by the Federal Reserve. The Federal Reserve is, for all intents and purposes, doing an ,xercise of yield curve control keeping yields in check in the face of rising issuance that the u. S. Government has to do in order to finance the widening fiscal deficit. From our point of view, this is a state of affairs that is likely to continue. As we have seen in the last few months, even in the face of a rising equity market, treasuries remain very well supported. Thecine when you look at Million Dollar question or trillion dollar question, are we renewing inflation because of the centralbank action . If we do, what is the timeframe . Andrea that is the milliondollar question. It is fair to say that in the immediate, what we are seeing and what we are going through in developed markets globally in general is a deflationary shock. The evidence shows that because of that drop in demand that was caused by the covert crisis, and the immediate, it is unlikely that we are going to see a strong pickup in inflation. , yes, but cpi inflation is unlikely. However,longer term, as the vast, unprecedented amount of liquidity has been injected into the system by fiscal and monetary authorities, it may lead to some inflationary revival. Some areas of the market can offer some good insurance. Inflationary bonds at the moment could be a good insurance policy. Francine thank you so much. Andrea iannelli there, the fixed Income Investment director at Fidelity Investments or national. It is the most extensive restructuring and its history. Airbus cuts 15,000 jobs across the world. We will bring you the latest on that story. This is bloomberg. Its pretty inspiring the way families redefined the word school this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. Were providing affordable Internet Access to low income families through our internet essentials program. And this summer, xfinity is creating a Virtual Summer camp for kids at home all on xfinity x1. Were committed to helping all families stay connected. Learn more at xfinity. Com education. Francine economics, finance, politics. This is bloomberg surveillance. Lets get to first word news with leighann gerrans. Leighann good morning. Hong kong police have arrested two people under suspicion of violating the new National Security law. It comes less than 24 hours after chinese lawmakers handed it down. Critics say the law will seriously undermine on kongs autonomy. Carrie lam says it is the most Important Development since the end of british rule in 1987. The u. S. Is going in the wrong direction when it comes to coronavirus according to Anthony Fauci. He says daily case counts could more than double to 100,000 if behaviors dont change. He added, clearly, we are not in total control right now. He declined to estimate the number of potential virus deaths but said the total would be very disturbing. Keeping the coronavirus under control is vital for economic recovery. That is the message of Federal Reserve chairman jerome powell. Testimony to house lawmakers alongside treasury secretary steven mnuchin. He reiterated the administration wants to pass another round of fiscal stimulus by the end of july. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in. Ore than 120 countries, this is bloomberg. Francine . Is embarking on his most extensive restructuring and its countrys history. It tends to move through the crisis brought on by the coronavirus pandemic. Joining us is our managing editor for global business. Benedikt kammel. Where will these cuts fall . Most of the cuts will be in france and germany, about 5000 each. This is important because airbus has always been. Careful to maintain eight an equilibrium of balance. Havelso germany where they made their single aisle planes, and the company has always guarded this valance this balance very carefully. Where then the u. K. Company makes wings for all its aircraft much smaller, only 1700 by comparison. And a couple of more sort of darted around. The global 11 of workforce, primarily in the area of civil aviation. Francine why exactly now, and how has the government reacted to it . Benedikt the ceo is basically decade. At a lost half that is his prognosis. You are looking into 2023, 2025 may be, until the market recovers. Normally what happens is within a decade air traffic doubles. What we are seeing here is in the next five years we will not see any recovery at all. A couple of months ago at the beginning of the pandemic, they already pumped in and a lot of money, extra resources to be financially prepared for this, that this is sort of the next phase. Now they have to adapt the workforce when nobody is buying planes, when a lot of allies are reviewing their fleet requirements. This is where they are realizing they have to make these cuts. The question of the government is an interesting one because only recently the french government in particular had a lot of money in the aerospace sector, and they will be unhappy now to see that as a response the company is still cutting a lot of jobs. We already got reaction out of the finance ministry saying they find it out of proportion. They said we are not at the end yet, and we will probably see some backandforth between the company and the government and representatives. Francine if you put this in context, how much more layoffs are we going to see an airline . We saw some hefty layoffs at easyjet. Benedikt this is the tip of the iceberg and we will see this cascading through the industry across the globe. We saw it recently at qantas. On the other end of the planet and australia. Cuttingt with easyjet, 700 pilot jobs alone. Paid jobs atighest than exec it is. This is something that will other than executives. This is something that we will see over the next couple of months depending on when and how , if havoc returns we will probably see a third round of cuts. Francine lets stick with the travel sector. When cruise ships are allowed to sail again how do you make experience as enjoyable as before and as safe as before . The chief executive of carnival told bloomberg how he is repairing for a return to the seas. Arnold as you point out, our industry has not failed. We have come to a halt when it comes to carrying guests, but we have been extremely busy in repatriatingnths, crewmembers. We have under 10,000 still on our ships at sea that we are trying to get home. So it is unprecedented. We voluntarily paused. Since then the cdc has issued a nosail order. Going beyond that order, our industry in the u. S. Has already extended a voluntary pause into september already in the industry in the u. S. Outside the u. S. , we are more optimistic. We think there is a possibility for some sailings to occur again in europe. Germany is engaged, italy is engaged, spain is engaged, taking a look at the resumption of crews for their domestic travelers at this point. That could occur possibly, but who knows . It is unprecedented. Basically,revenue but we still have to maintain our ships. We still have come as i mentioned, thousands of crew we still have, as i mentioned, thousands of crew attending to the ships so that when we are able to resume we will be ready to resume. But it has been absolutely devastating. Im sure the others would say the same thing. Our highest responsibility, and our top priorities, are always the health, safety, and wellbeing of our guests, the people and the places that we touch. 700 locations around the world. The people in those locations that we touch, their health and wellbeing is the primary cern for us, as of course with that in mind, we are totally focused as a company and as an industry in pursuing the best interest of Public Health as we resume cruising. Where are you repatriating your workers to . Crew of over 90,000 or so, three covid, we had representation from 145 countries. So we repatriate all over the world. Theave concentrations in philippines, in india, in indonesia, but also central europe, the caribbean, and everywhere in the world. Were shut down with limited travel and their issues around who could travel, so it has been a very, very tedious process. Is goingropean union to extend a ban on travelers from the United States for another two weeks, while opening its doors travelers from china and a number of other countries. Arnold, starting with you, how do you look at that announcement . Arnold it is not surprising. The virus itself moves from east to west, so it is natural that recovering east is sooner, and therefore europe is more possible with the spread of the virus east. And obviously here in the west a the u. S. , we are still at peak or we continue to peek in some locations in the u. S. , so it is not surprising. A couple of weeks is not a dramatic amount of time, so we will see what happens over time. Francine that is the carnival chief executive officer, arnold donald. Your liking that youre are looking at life pictures of home you were looking at live pictures of hong kong. That story all morning as we look at it. Live pictures. Coming up, it is a multibilliondollar business that has been hit hard by the coronavirus lockdown. How will the fashion industry recover . With the ceo of roxana. This is bloomberg. Francine this is bloomberg surveillance. Lets get to the Bloomberg Business with leighann gerrans. Leighann good morning. The u. S. Federal Communications Commission says huawei invented eer National Security threats. The move prohibits federal subsidies used to buy their equipment. Both companies have close ties to the communist party and chinas ministry, according to company has claimed the airbus is planning to cut 15,000 jobs as part of the biggest restructuring in its history. About 10,000 of that will come from its mean bases in germany and france. The company says output will be about 40 lower than expected for two years, due to a dramatic slump in demand brought on by the pandemic. Someical difficulties in markets across europe this morning. Denmarks dectalk debt office is postponing a bond auction. Systemece of a trading is also down due to a technical glitch. The issue is hitting a number of markets in central europe. That is the Bloomberg Business flash. Francine lets focus on the future of the fresh is this. My next guest starting his with ain architecture job at deloitte. After working at clients that include luxury good makers, he struck out on his own with a startup in the growing indian bridal market. He was appointed chief executive of fashion brand roxana, where he spent 2020 adapting roksanda, where he spent 2020 adapting to the coronavirus crisis. And he is only 32 years old. We are delighted to have jamie roksanda. Of looking at how coronavirus has changed fashion week and how it will change shows going forward, how will it change the industry forever . Jamie thanks, francine. I think it is definitely a period of reflecting on how we operate, how business has been run before, and how the critical part of this industry works. I think some good has come out of it. I think we will have a slower pace on how the Critical Path forward, with less seasons really and just focusing on two main seasons, a Spring Summer and in autumnwinter. That is what we kind of want to stick with. Industry fashion collective called rewiring fashion, brought together independent ceos and executives to bring about change in this initiative. As well as managing Fashion Shows reimagining Fashion Shows, too. That,ne how difficult is given that people like to touch and see the products . How much of a setback will coronavirus be for 20, but also in the seasons for 2020, but also for the seasons to come . Jamie definitely, i think we have had our last selling period back in january this year, and we were able to meet with buyers see the clothes. It is definitely challenging for line and buy from a not see that movement. We have an additional platform where we will have videos of the ultimately, when our next selling season comes this september, we will be able to meet again and have those provisions in place for covid19 to be able to do appointments without buyers so that we can resume some normality. But, yes, i think it is definitely throwing us all. I can definitely say. But some positives are coming out of this. About, as i mentioned, looking at reflecting on ourselves. We have been able to get into. Ur sustainability manifesto we never really had time to focus on those areas before. Francine jamie, do you think that people will go back to shop like they used to, or are they going to be much more online . And what does that mean for the strategy for roksanda . Jamie yes, i think over the lockdown now and getting into selling, there has been a consumer shift. We cannot deny that people have wns been buying gallons go or evening where and luxury, and it has shifted into more relaxed and transitional pieces, which will definitely coming out going forward. Where our consumers can be at have relaxed pieces that can allow them to transition in that way. A shift in the present in a number of International Department stores, which we are expecting to be softer than it ever has been in before. Has geared us up into expediting our launch of transactional ecommerce, which is something we have never had. It has always been in the pipeline, but now we have to react faster to give our customers an alternative sales channel. Whilst some might feel uncomfortable shopping retail when social distancing remains in place at this time. Francine how were sales affected during lockdown . Is it sales you can get back as the economy slowly reopens, or is it lost stocks . Jamie i think i can speak for us all on luxury goods in the industry. We are all pretty much forecasting a 30 reduction in market share for the industry. For 2020. I think that is challenging when thetill want to retain profitability that we have, and of course it is hard when there are some any Macro Economic barriers, with how this could still cut out potentially further. We are hopeful, but i think coming into 2021, when the cases get to a really low place, and hopefully get to zero, we do see light at the end of the tunnel and people feel comfortable celebrating again, celebrating life and getting out there, and need to buyill be a specifically luxury. Ofhink we are really proud having lasting orders for the years to come. We are really making sure that we get that message quite clear to consumers. But i think, yes, there will be an element for everybody that this last selling this lost selling window, im confident that we can pick back up. Francine what can the luxury and fashion industry do more for diversity and inclusion . Thanks for asking me that. I think i am one of the few lgbtq ceos working in fashion, so diversity and equality is close to my heart. Particularly with the current state of affairs. I think the fashion industry does well in representing models and ad campaigns, and the industry appears quite diverse. However, the reality behind closed doors, that same Community Working with industry, specifically on the operational. Ide where i sit, is very small the community, and other minorities are big consumers of fashion. Withtrying to move forward making us appear not so closed and making it clear for the next generation that fashion is a viable career avenue for all with opportunity. Particularly on the operational side, as i mentioned. And there is a great challenge for individuals out there from all walks of life. It obviously benefits from , forg operationally business and innovation. Rewiring ofn the ashion, we have to step up Community Initiative where we are gathering opinions from the community to really lobby change. I think it is something very close to me and to the roksanda business as well, that we are pushing for. Francine jamie, thank you so much. Jamie gill, the chief executive of roksanda. Coming up, back on the roads. A glimmer of hope for the struggling tourism industry. We will talk about that next, and this is bloomberg. Francine as the e. U. Reassesses his travel ban, residents of countries themselves are getting ready to hit the road. Europeans are preparing for the next holiday, a glimmer of hope for the struggling travel industry. There is dani burger with the latest data. Dani looking at alternative data, always interesting because it can give us a higher frequency measure for what is going on. The picture is quickly improving for europeans. Travel insi looked at different regions, and they saw in the last week of june, the rebound for downloads in the european region were quicker than anybody else in the world. That is the orange line. If you look at the white, which is north america, it was picking up, but we have seen a decline as coronavirus cases emerged. This shows europeans ahead of an important key, august holidays, ready to travel as well francine dani burger with the latest on the travel trends going forward. This is what the markets are doing. The markets are looking at mixed data in europe and they are trying to figure out exactly what that means compared to the infections that we are seeing the rise of infections that we are seeing in the u. S. Bloomberg surveillance continues in the next hour. Tom keene joins me out of new york. Later, a conversation with john bolton. Francine authorities in hong kong make their first arrest less than 24 hours after beijing enacts a sweeping security law. We are live from the city as protests take place. Going in the wrong direction Infectious Disease expert Anthony Fauci says the u. S. Could risk 100,000 coronavirus cases a day if behaviors dont change. And airbus begins the biggest restructuring in its history. It will cut 15,000 jobs with the majority impacting the main bases in germany and france. Good morning, everyone. Good afternoon if you are based out of asia. This is bloomberg surveillance. Im francine lacqua, here in london. In hong kong new york, rather. We are going to hong kong in a second, and my mind is there. At least two arrests after this new security law. I am seeing the markets. Story,is is a movable and asou
comparemela.com © 2020. All Rights Reserved.