Economists expect a bond buying to exceed 3 trillion euros this year and the next. Twitter shares fall after hours on when unprecedented hack of the accounts of prominent u. S. Figures, including elon musk and bill gates. Ceo jack dorsey calls it a tough day. Welcome to the program. A tough day for jack dorsey. We will get into that story a little bit later on. Just under an hour to go until the start of cash equity trading on this thursday morning. Lets look at European Equity market futures, u. S. Futures. All of that pointing a little bit negatively. It seems some of the optimism around vaccines that dominated trading yesterday, some of that has waned just a little. Replaced by a mixed picture signals on geopolitics and the chinese data. Lets get to some breaking news. We have european Passenger Car sales dropping by 24 in june. European car sales, the slump slowly eases, believe it or not with a 24 jump. The recovery has been taking place now for a second straight month, leaving manufacturers and dealers hoping that state subsidies will help spur a stronger rebound. We do seize state subsidies concerned with cars in some parts of europe, but certainly not all. Some parts jumping in with those green measures, sector specific measures. Other parts of the european economy not doing so. Lets talk about another part of the european economy and that is the u. K. U. K. Jobless claims. A host of u. K. Data breaking this morning. We have the may Unemployment Rate. Some of this data is for may and some for june. May Unemployment Rate is 3. 9 . The estimate was 4. 2 . That on the face of it looks better than expected. Bloomberg economics was talking about 4. 1 . For the march to may period. That is the may ilo Unemployment Rate, a little better than anticipated. U. K. Jobless claims falling by 28,000 in the month of june. 125,000 in the three months ending may. And we get the three month waiver excluding bonuses rising by 0. 7 . That is a threemonth figure even if that had come in a little bit higher than estimate. Let me give you one line on what is going on at heineken. Breaking news coming through from the beer maker in amsterdam. First half preliminary beer volumes coming through. We saw some fairly gloomy predictions from numbers in this sector. Carlsberg, i think it was. Heineken declining by 11. 5 . Operating profit down organically by 52. 5 . That is the stock specific story this morning. Better news out of the chip sector. Tsmc numbers. The tech sector once again and focus. Lets get to the gmm. Things to look fairly mixed. The philippines doing its own thing yesterday. Doing its own thing today. Elsewhere in asia, we do have weakness. China down by 2. 5 . Chinese gdp did it was only part of the story. It was positive, showing the rebound. Still underwater when it comes to comparisons with 2019. The retail sale story looks a little bit more difficult to stimulate. Money coming out of emergingmarket fx. The dollar is actually fairly flat this morning. Lets wrap all that together with mark cudmore, are bloomberg mliv manager to joins us now from singapore. I will just dive into some of the u. K. Data. Some better than on unemployment. This does remain a big fear for investors, that in some of the developed markets that we have seen effective schemes put in place to stop unemployment spiking very quickly, that that could have just delayed things. That is something we are watching in the u. K. , parts of europe, and the u. S. Mark absolutely. We are seeing this theme with the data generally globally. We are seeing this globally for everyone. If you are bullish, you say, the collapse wasnt as sharp as expected. This has been more sharp the other side of the atlantic. That is because expectations have been cut so negative, we are slightly beating them. It is not as bad as feared. Working, that justifies the rebound in assets. Bearish outlook goes, we are still getting a large Economic Outlook and construction. What happens when the stimulus stops . I think the conversation is going to be particularly hard over the next couple of weeks. This employment insurance that is expected to inspire, i think , thee are going to go stimulus has kept economies from completely collapsing. They really need to keep on going. Anna you are right, a lot of focus on the u. S. Let me ask you about the chinese data. It seems to be a fairly mixed bag. Sales side. How difficult it is to stimulate retail sales. Also how difficult it is for manufacturing economies, like china, to push economy back up previous levels when the rest of the Global Economy is suffering. Mark yes, i think you are absolutely right on the two themes. Retail sales and the whole china pickup after they ended their shut down a few months back has been about the Factory Production has picked up quicker than expected, but the retail markets, the two markets lagged behind. That is because the pandemic is constrained. They are worried about health concerns. That is an ongoing theme around the world. This is important. The market we saw going into the pandemic was billed on the resilience to consumers. People including myself doubted the strength of the bull market. The consumer kept on spending. Now we have a crisis where the consumer is physically stopped from spending in many parts of the world. Even when they are not, they are worried to go out. We are seeing that in the mobility trends. Is tryingat the theme to emphasize that story. This has been a very, sharp negative reaction in chinese stocks. It didnt feel like it was about the data. It is just that the data didnt save the day. People were saying china stocks moved so far, so fast, now we have the slight negativity, we break through that previous high. Then we got the twitter hack. There was a little bit of negativity going into the data. Out a end, the data came bit meaningless and no real direction from it, therefore we went back to the slightly riskaverse theme in china stocks. Meh ishe data coming out not going to counter high expectations. I want to ask you about the ecb. They are going to be meeting. I will combine it with the question of the day, how far will the euro rise with eu stimulus . Whether that is coming from the ecb, probably not today, or the fiscal side every it mark i think it really is much more about the eu summit. Everyone ignoring the ecb. If they kind of make clear progress on a deal this say look a they compromise has been reached, it does not matter what kind of deal it is. I think the longterm picture for the euro is it can rise an awful long way. I thought we would see a deal in the next couple years. We have already seen a 5 rise in that time. Even if we get the compromise next week, we probably will get some more legs and keep rising again. It will never be in a Straight Line with anything to do with europe. On the flipside, if we do get a no setback, if there is initial sign of compromise, it will not mean the deal is dead, it will be a big setback in the shortterm. Thank you so much. Mark cudmore, mliv managing editor. If you want to get involved in our question of the day, what do you think are the upper limits of the euro . You can get in touch with us on tv on your bloomberg. We are going to speak to morris kramer, we will speak to him around 8 00 u. K. Time. He has interesting thoughts on the fiscal stimulus side of things here in europe. Up next, chinas economy returns to growth, but consumer demand comes in weaker than expected. We get further discussion on that chinese data flow next. This is bloomberg. Anna welcome back to the European Market open. The cash equity trading day looks as if it will be way down by a murky picture of geopolitical weighed down by a murky picture of geopolitical tension and we seem to have calmed down from the excitement about vaccinations yesterday. Lets get an update on the bloomberg first word news for you now. Some of the top stories we are covering. Coronavirus cases continue to search with california reporting you record cases and fatalities. The worlds biggest retailer is going to require customers to wear masks at its u. S. Stores. Walmart joints starbucks, costco, and best buy in the move. In asia, tokyo has raised its coronavirus alert to its highest level with the daily Record Number of cases set to be recorded today. The bank of of england has told conservative lawmakers u. K. Interest rates are likely to stay low for a long time. According to people present at the closed meeting, he also said the banks will do everything they can to support the economy. Separately, a survey by the british chambers of commerce settle to third of businesses in the u. K. Expect to cut jobs in the next month. Fewer than one in eight said they plan to increase. President trump is indicated to aid to doesnt want to escalate tensions with beijing, ruling more sanctions. Says the law violates International Legislation and is a gross interference in its internal affairs. Global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Lets get further into the chinese growth story. The chinese economy bouncing back. Secondquarter gdp expanding 3. 2 in the three months to june. More than economists were forecasting. Retail sales up by 1. 8 percent defying estimates for modest growth. With get some analysis now our guest from state street. Thank you for joining us on the European Market open. Lets get to the chinese story. The data better than expected on gdp, but still stocks fall. I suppose there was a lot of expectation built into the big rally we have seen of late. Yes, that is definitely true. The chinese data the way i would read chinese data, it is probably very hard to expect anything other than that. It is very hard, we are in the midst of a pandemic, is it expect reasonable to expect a smooth glide through . They probably deserve some pat on the back for showing a recovery, the first economy to give us a flavor for the vshaped economy. , its you said, it is uneven is driven by policy support. We still need to see more in consumption side. I probably would not be selling chinese stocks on that news. Indeed. What about the picture painted by the retail sales data . The read across to people in other parts of the world. It really goes to underline that even if shops are open, even if people are able to go out, they dont necessarily want to go out and enjoy Retail Therapy the way they did previously. Marija yes, absolutely. That is absolutely true. The shops that are open, im not necessarily sure they are making a lot of money. It often feels like there are more shopkeepers than customers in the shops. With all to comply health and safety regulations, it is probably quite expensive, so i wouldnt be surprised that shops that are open are probably lower margin. Anna just briefly, we got numbers from tsmc, the taiwanese Semi Conductor manufacturer. They are very positive on their guidance. In the last 15 minutes or so saying they are raising their 20 sales growth outlook, sales to sector above the tech is where it has been since march or just before march. I suppose it wont surprise you as somebody who likes the tech sector at this point, it wont surprise you we are seeing strong guidance come through from the sector. Marija absolutely. Tech has been our favorite sector. Before the virus, during the virus, and right now. I hate to pandemic say the words benefited from the virus, but it has found its place at the center of our lives. We all leave work, entertain ourselves online. Inis helped highest Technology Sector. What we see increasingly is that Technology Companies are not of the life,enter but when you about company fundamentals, the fundamentals are quite strong. Before the crisis, they had strong cash flow generation, they have low debt. Those factors are actually something that investors are clambering for now. The safety and stability that is very rare. The Technology Sector is offering Something Like that. So that is attractive. Tsmc also raising their 2020 capex estimates. Really interesting to see where we are going to see capex spend this year, Sony Companies not having the confidence to do that, so maybe tech is the answer. Marija veitmane stays with us, senior multiasset strategist at state street. We will talk about europe. We will talk about how the European Central bank is meeting today with most watchers expecting they will keep the stimulus open for the summer at least. This is bloomberg. We have been saying for a symmetric,hat it is which means we should overshoot. We are having a difficult time doing that, like all developed economies. Im supportive of the idea of letting inflation get above 2 before we take any action with regard to the fed funds rate. Anna that was the Philadelphia Fed president Patrick Harker with his thoughts on rate hikes and inflation in the United States. Meanwhile, ecb policy are widely expected to keep stimulus steady, but president Christine Lagarde will face questions over whether current monetary and fiscal pledges will prove sufficient to boost to the recovery. Most economists expect the central bank to do more by december with total bond buying seen exceeding 2 trillion euros this year and next. Marija veitmane, senior multiasset strategist at state street, is still with us. What matters more to you . What the ecb does by the end of the year or is it what european leaders do by the end of this week . It is a verynk nice way to frame the question. Done is givenas the European Commission a fiscal space to spend. It has put the ball in their fiscalo kind of open policy more. What is about to happen and i hope it does happen this weekend is actually quite historical and monumental and very significant. If it works, it would be significant and really important for better functioning of European Union. Anna it is paramount what happens. We will be keeping our eye on all of that. How much higher can the euro go . We have been asking this question of the day on our markets live blog. What kind of boost to the euro will fiscal stimulus provide . Marija yes, thats an interesting question. Upuspect europe has gone quite a lot already the market somewhat expects a successful passage of european rescue package from the weekend. I suspect a lot of euro strength is potentially in the price. Europe probably will rally, but maybe not as much as what we are seeing. Wea ok, so not as much as have already seen. Is there risk to the downside . Marija not risk downside, but i mean given the site of the move we have already seen. Maybe a little bit higher, but not too much higher is what im trying to say. Anna ok, so we will limit our expectations. What about the earnings season . We talked about what you think of technology. We see tsmc today. Asml yesterday. What are you seeing in the earnings season . I notice you picked up on something that my colleague act up on earlier this week, which is that actually earnings revisions in the u. S. Have not been that active over the past two months. Therefore, perhaps there is some reason to expect outperformance. Marija yes, that for me is quite interesting. What we have seen in economic surprise data that since about may, we have seen quite a substantial positive surprise. We have seen some signs of positivity in alternative data. There is this idea that the economy maybe not as bad. Int has not happened at all earnings numbers. We are looking for some positivity. Maybe for less negative earnings. Bad,numbers will be quite but maybe not as bad as what people are hearing. Anna yes, maybe not as bad as estimates. What about the u. K. . I see from your notes that you are long some u. K. Assets. Is probably one of the areas we definitely do not like. Us isk u. K. Concern for that the economy is slowing. We talked about some positive surprises. U. S. Actually more in the in the u. K. , we ceded to disappointment and earnings estimates are quite low. What is interesting, and a lot of countries current forecast, earnings forecast, even the ones we talked about that are not very active, but still Analysts Expect earnings to recover next year. Precovid levels. That is not expected in the u. K. In the u. K. , we see weak economic data, week earnings expectations, very hard for us to get excited about u. K. Anna ok. I stand entirely corrected. Marija veitmane, senior multiasset strategist at state street, thank you. We will get an update on the virus latest infection figures next. 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. More voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music 30 minutes until the start of the trading day. Gone seems to be the enthusiasm for immunizations we sought dominating market thinking yesterday. And theeopolitics rising infection rates. More on that the new moment. Lets look at some events that should be shipping your day. Could shake your day shape your day. The decision by the eus top court could have major implications for thousands of companies. This afternoon, it is more u. S. Bank earnings. Today it is bank of america. 1 30 p. M. U. K. Time Christine Lagarde will hold a Virtual Press conference after the ecb meeting. Will she be asked about whether there will be further stimulus from the ecb later on this year . Will she be asked about how the extraordinary measures are reversed . We will talk more about that later in the program. Second waves of the coronavirus are spreading around the world. Tokyo and victoria has posted record cases with a surge continuing in the accident in california. Some are concerns around possible vaccine side effects. We will wait for details perhaps in the coming days. Joining us now is reachers director at bloomberg. All theou are across talk on a vaccine. Your thoughts a day after the market was transfixed by mode dharna by moderna. What are your thoughts after seeing the latest reporting around vaccines . Good morning. If you could see my face it would be one of those agog faces wondering why people are getting so excited about a 45 patient trial which, albeit positive for what it is, was not tested in elderly patients. None had any comorbidities. They are majority white, which is not the case with the virus. So many, many questions unanswered. And we did not even know whether an antibody response is enough. Whether it is longstanding. Thewhether you need immunity this vaccine so far has not been able to dos. So it is a large amount of something weor still have many outstanding and important questions to answer. Anna would be important if we find out that antibodies are produced and there is a vaccine that can produce the antibodies that linger for 12 months . Would that be important or would that not meet the bar for a viable vaccine . Say ie many people would would pay for something to protect me for 12 months. Sam we do that with the flu vaccine. I do not have a problem with something that gives you a 12 month cover. At the end of the day sorry this,really hard about but it is perhaps better for the companies if you come at it from a hardnosed commercial perspective. But 12 months is fine. The problem is there are many unknowns. As soon as you go into the comorbidity, the people who really suffer from the disease, as soon as you go into them, how effective is the vaccine there . Let me step back. It is enough to get 80 of the population immune so they did not pass on the virus. As long as the virus infection is prevented, not just the disease is prevented. There are so many questions to answer still, which i do not think is really in line with what the markets have been doing. Hope forwe have more the trial . It seems like it may be is ahead of others. They are testing points about the small number in the mode dharna trial and the fact in the moderna trial. The other one is taking place in different parts of the world. When you vaccinate 30,000 people with the Moderna Vaccine there will be a broader population. I am not beating them up for this because it was a small trial and it is what it is. What i am saying is there are lots of unanswered questions. Data before inod animal models. Is it is a vaccine smaller ive you unfortunately the kind of vaccine will probably not be able to redose more than once or twice. Maybe the world will end up ng a johnson childs and Johnson Johnson style vaccine filed by several boosters of the moderna type vaccine. Anna that is interesting. Space for all shapes and sizes of vaccines. Sam, thank you very much. Thank you for bringing us an update on the latest of the virus. Lets get to another big story. Goldman sachs has delivered its best trading results in years joining the lights of jp morgan. Morgan stanley and bank of america report next. Heres a preview. From j. P. Morgan and citi, really strong results in trading. Those likely to see continue with Morgan Stanley and bank of america. Exposure tomore consumers publicly saw in prior results, consumers, credit card delinquencies were not as bad as we assumed. It is clear what the fed has done with stimulus supporting the market has been a big boon to these banks and their earnings. One of the more jarring things we heard came from the ceo, a Consultancy Firm saying the results for goldman were so good, almost indecent. After the results this quarter, it is likely the focus will turn to the fed saying what you did injecting trillions of dollars into the system seems to have just been benefiting investment banks. So what can we do for main street . You. Thank we will keep an eye on the story. To replace theon next head of the wto at the most turbulent time in the organizations 25 year history. We speak next to one of the front runners. This is bloomberg. Is bloomberg. Welcome back. We are 20 minutes away from the European Equity trading session. European futures down. Says heim global ceo expects Monetary Policy will remain loose enough to drive risk assets higher. He adds it is probably best for investors to remain long to maximize return. With major banks reporting this see, we will continue to more provisions for the rest of the year. Will ultimately take some sort of severe set back, a surge in default. That is one way to get down. I would like to remind people that the strongest economic expansion on record was between 1933 and 1936. To we never recovered back the levels of 1929. Ultimately there was a second setback that resulted in what we call the great depression. So this artificial stimulus being created by the government, by Monetary Policy, in the near term is listing asset prices. But when you look at main street, you look at small businesses, these are where the majority of american jobs reside. The real economy is not improving at a pace that would support a continuation or cash flow gross which could support these companies. Whether that is tomorrow the chickens come home to roost or whether it is three years from now, the day of reckoning will come. Policy will remain loose enough to continue to drive reset sets higher. When when it comes to the wave of default, we have heard from banks to set aside a combined money 5 million. I want to get your read on these provisions. Are these carefully considered amounts or are there in the dark as to what the potential damage could be . I think they are stabs in the dark. At the end of the first quarter, when we had pretty good visibility at the end of march in how severe the downturn was, the banks did not turn take high reserves that all. Now they are taking reserves, a lot of reserves, and that is telling me they are behind the curve. And that they are in a game of catch up. I do not think it is adequate in terms of what ultimately will be needed. So i think we will probably continue to see lots of loan loss reserve provisions Going Forward for the rest of the year. Surpass the numbers in the great financial crisis. On the flipside you had Trading Operations which have done very well. One analyst called goldmans earnings almost indecent and could create a political backlash. I think in this environment that is a very real risk. The banks have targets on their backs from the financial crisis. Are constantly being identified as the winners every time we have a bailout. Theeasy Monetary Policy, bond purchase program, which has stimulated a huge amount of demand into issued bonds and buy bonds, is resulting in extraordinary trading profits. The large profits in these Financial Institutions are a target, especially by certain members of congress, the more liberal members. So i think the reality is that there is going to be a backlash for the banks, and especially if there is a dem it a democratic administration. That was the guggenheim global ceo speaking exclusively to bloomberg. Now to something a little different, the wto. The campaign to leave the wto during the most turbulent period in years is underway. Playing out against a backed up of a pandemic, will guard recession, the u. S. Battle for trade supremacy, and the u. S. President ial election. There is a lot at stake. Eight candidates are vying for the top job. Our next guest is one of the front runners. By the formernow nigerian finance minister, currently in geneva. Actually interviewing for the role. Ngozi, thank you for speaking to us. What do you think is the most pressing issue at the heart of the wtos problems right now . Ngozi two things. Wto tothe need for the update its rulebook to the 21st century. Getting out of the slowdown and paralysis it has been in for some time. Becausevery important, trade is still going to be important. That is one thing. Another is the dispute Settlement System that has been paralyzed for some time. And that needs to be reformed and reinvigorated. Because you cannot have a rulesbased system without a form in which you can have the rules, any dispute about the rules. I think those two things are why it is important. I think a third one is to make theres good outcomes to some of the multilateral negotiations that are ongoing. So we need some good outcomes. Let me go through a few of those. 21st century rulebook. What is missing from the current rulebook that means it is not fit for the 21st century . Ngozi there are things happening with ecommerce and digital trade, to do with a Green Economy, and so making rules, it isding critically important. Theres also good discussions going on with trade. These are issues that make the world trade more inclusive and those are very interesting issues. The rulebook needs to be updated to reflect those issues. The Green Economy is vital. Digital economy is vital. You need to bridge the digital divide, so that people in developing countries who are not connected can also be part of the digitalization of trade. Anna and how would you fix the stalemate we see in the dispute settlement arena . How would you reform that . Tozi theres a need understand why the stalemate is there. What is in contention . One of the big members, the United States has issues with the way the appellate body has been functioning in i rulingsts. The kind of judgments it reaches, overreach outside of its mandate. So there are a number of issues that had to be sorted out so all members can come to agreement about having the appellate body function in a way that will further the interest of all members. So those issues that have been tabled, some work has already begun among the members to try and deal with those issues and it has to continue so those problems are solved. Anna if many countries want to put their interests first, ngozi , do you worry maybe there is no role for a multinational body like the wto . Ngozi i think the world has had a multilateral trading system underpinned by the wto help to improve hundreds of millions of lives, partly because there has been a trading system that is stable, predictable, and fair. That system is still needed. If you want to avoid trade wars, then do not have a wto. The wto is still vital. It does need to have its challenges solved, but i believe it is relevant and should be there to focus on 21st century issues. To trynd what we you do and help alleviate tensions on trade between the u. S. And china . Ngozi those are very big issues, and i think it goes beyond the trade. There are other political issues that involves. With respect to trade, it has to be pointed out that both the u. S. And china have benefited multilateralthe trading system has to offer, from what the wto has. And still reminding them that this is important to the world, that it can still be a win. And trying to find areas of common interest from which one can bridge that gap on the issue of trade, i think that will be a key area. I mean, if we can get the u. S. And china around the dispute Settlement System, that could be the beginning. Anna thank you so much for former us today, ngozi, nigerian finance minister. Thank you for speaking to us here. Minutes to go until the start of the trading sector. We see stocks expected to move to the downside about. 9 . A number of stock specific stories including heineken plunging, as lockdowns decimate sales. This is bloomberg. Anna welcome back. Thursdays session is seven minutes away. Lets get a look at some stocks we are watching this morning. Heres a breakdown. I am looking at they have been a darling during this crisis as more and more people are using online only services. The main takeaway is they are lifting guidance for 2020. Estimates oning that take and they see revenue up 15 to 20 . Originally they were thinking 10 . This is good news for the company. On the other side we have the luxury space which we know more people when they shop luxury they want to go into physical stores. Shares indicating 3 lower. Sales fell 47 . Digitre seeing double sales declines across all regions. We have been talking about retail the entire week. We saw a pickup from a number of retailers across china and other arts of asia. Richemont has a glimmer of hope. They jumped almost 50 as consumers in china shopped more on home turf, as many are forgoing international travel. The big question is if other markets will have similar rebounds. We got retail data from china today. The top line was a decline. But if you look at sectors, interesting to see the breakdown. Cosmetics increasing. Jewelry declining. People are avoiding bigticket items. Heineken down as much as 10 with profit plunging. 42 decline as lockdowns continue to hurt sales to bars and restaurants. So much of heineken is exposed to america which is still dealing with covid19. Anna yeah. Certainly beer and watches feeling the pain of the pandemic lockdown. That seems to be a theme this morning. Coming up, the market open. Futures pointing down. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Anna a minute to go to the start of thursdays cash equity trade. Here are your headlines. A group of World Leaders apology. A group of World Leaders calling for solidarity on the coronavirus as localized outbreaks spread from tokyo to texas. Demands come in weaker than expected. The e. C. B. Is said to keep stimulus steady today. Economists expect bond buying to exceed 3 trillion euros this year and the next. Twitter shares fall over hours after hacks on prominent u. S. Figures including elon musk and bill gates. They called it a tough day. Lets get to the start of the European Equity trading day. It could be a tough day. European equity markets expected to be under pressure today. A few crosswinds in term ovs geopolitics between the u. S. And china and we have sort of recovered from our overenthusiasm about vaccines yesterday. The stoxx 600 opening to the downside. He ftse 100 down by. 2 . We have some weakness at the start of the European Equity trading day. Some of the companies lerting us to ahead. Heineken opening down. E see some weakness there. Stumbling there morning, down around 3 . Numbers coming through. Numbers looking dire for these luxury companies. Very interesting to get the narrative around their outlook were it possible to keep one. All of those other masses. Keeping an eye on what is going on on chip companies. We dont see a lot of movement. Just moving really with the markets. European equity market move there you go the downside. Policy makers are widely expected to keep the stimulus open. The president will face questions whether the current monetary pledge is sufficient to reduce the recovery. Bond buying is boosting by the end of the year. Moyers, really good to speak to you. Im ill ask you about e. C. B. , it is on the agenda and ill ask you about the Recovery Funds. What kind of expectations do you have . When do you expect the e. C. B. To make its next move . Good morning, anna. I am in the consensus. I expect nothing and i think that is what we will get. In june, the e. C. B. Really did overperform on the expectations billion. Another 600 in the last week of june, the purchasing of the program has gone down a little bit and we dont expect anything because some of the Economic Activity data is cominging in a little better than expected. Some of the governing Council Members pretty much said at the end of last week for example. I think there will be nothing this week. With this session. Then of course the e. C. B. Will not meet the next time will be in september. By that time the e. C. B. Should have a much better view on the shape of the recovery and they will also have a much better view with the fiscal response you just mentioneded. Actually coming forward at the european level. That summit is happening tomorrow. The timing is a bit awkward for the e. C. B. But i think there is no reason for them to move. They have been successful easing credit conditions, if you look at the italian 10year bond. The yield has gone down, it is at 1. 2. That is pretty satisfactory. The stock market is money is up. There is no reason for the e. C. B. To move right now. Actually what some analystings are to discuss is whether not only more needs to be done but whether the whole envelope of 1. 35 trillion will be use at all. That of course depends on the speed of the recovery and whether it will have a second wave or not. Anna you also suggested a good thing to ask Christine Lagarde, how the e. C. B. Will normalize its operations . Is that a question for today or the future . Well, if i were a journal history in the room, that would be my favorite question. Because i look at it this way. An essential bank, youre not successful if you implement a big program like that. Youre actually successful if you implement it and exit it. It is like going to the market for the first time and well, i issued my first bond. I was successful. No, youre only successful once you paid it back. For the e. C. B. , this seems to be a real challenge to move out of this stance and we have seen some of the kneejerk reaction vs markets when lagarde let it slip in the march meeting that they are not there to police the yield spreads of italian bonds. The markets are sensitive. They are independent on the e. C. B. Stimulus. In that sense the e. C. B. Is independent of politics but im not so sure it is independent of markets. If they try to start to normalize, might get what used to be called a tantrum and that might create a real stress in some part of the credit market, especially in southern european government bonds which might force e. C. B. Back in. How they will get out of that, that is still an open question. Never been tried but that is a question worth asking ms. Lagarde today. Anna interesting. You say the e. C. B. Is independent of politics . It will be easier to pay the debt back. Do you think that goes through minds of Interest Rate setters and those who come up with the q. E. Programs and other special programs at the e. C. B. . Well, i dont think so. I would not expect that when they sit together today that they think well, we need to help this government or that government keeping the funding costs low. The e. C. B. Or any central bank, what they do, they can provide liquidity relief. They cannot provide relief. Greece, for example, lower Interest Rates in 20112012. Think the incidence independence is intact. Im worried about the dependence on market expectations. That is probably to have e. C. B. s own making. They have created this culture where they think there is a e. C. B. Put like the old greenspan put or the power put now. The e. C. B. Will be there to support the markets if there is a selloff. So that is the real challenge for them. Politics, i think they have had an opportunity are the Constitutional Court ruling in germany redemonstrate that they will not be holden by governance in the eurozone or elsewhere. Anna thank you very much. Stay with us. Moyers from credit suisse. Well talk about what is going on in the u. K. Jobless claims fall for the first time in five months as the governments income support scheme keeps millions in work. Is there more to come in the unemployment story in the u. K. And elsewhere . Well discuss that next. This is bloomberg. Anna welcome back to the European Market open. 10 minutes into thursdays trading session. Down by. 6 . Some of the top corporate stories we focused on here at bloomberg. Twitter shares fell in late trade after some had their accounts hacked. Bill gates, elon musk and warren buffett. The address went to an apparent scam. They suddenly lost the ability to post new tweets. Twitter says most are now working again. Has exceeded analyst estimates by the widest margin in six years. Apples iphone chip maker also beat estimates. By ings are being boosted u. S. Cuts on huawei. American Airlines Says 27,000 people could lose their jobs. That is just under 1 3 to have total workforce with the airline blaming the coronavirus which is still hurting the industry. It depends how many workers take n early out or leave option. That is your Bloomberg Business flash. Moyers. Back to want moyers. Morris. How will the Ratings Agency given your experience for so long, how will they treat this, this vehicle which unlike the e. S. M. Has this has a promise of part of e. U. Budget. How would you go about raising this . Very good. Hanks, anna. Insight into what the rating agencies are about the e. U. s own rating as an issuer. The point that you mentioned i think is an important one. Many european institutions and European Investment bank and theessf, the first and now defunct mechanism. The e. S. M. Of course and the e. U. They all had some sort of credit e. S. M. Capital the has capital paid in. Theessf has a very strong has a the essf very strong guarantee. This is the biggest Super National International Issue organization in the world by some margin. It is remarkable that given that the e. U. Doesnt have any revenue, doesnt have some 500 billion of that will be given out in grants so there is no cash flow coming back. Of course the governments are probably committing to make those to make the e. U. Good in the future all the way to 2058 making the traditional transfer in the future but frankly, what do we know of what the political situation is in 20 30, 2040, 2050. There was a poll last year before the european elections where about half of the population in france, italy and germany said they think the e. U. Could collapse in the next decade or two. I think this is well overdone. If you want to rate this triplea and it is flying solely on promises to the future to contribute to the budget, decades in the future, i would think this should raise a few questions when you analyze that credit. That is not an enforceable promise. You cannot go and take the government to court. The government will short that off. Anna will you be looking this weekend for some words around that, for some commitment, some details . Otherwise the market could just est have vehicle by pushing up on it i suppose it. Overweigh it. Try to attack the unity over the e. U. I would advise governance to give some additional bells and whistles to this issuance program. You cannot stress it enough how big it is. It is the biggest ever and has the weakness financial support. I dont think there is a problem in the shortterm though. Look at the current funding conditions. I think investors will buy it in the belief and the correct belief i think that the e. C. B. Will be very keen to buy it. This is sort of a good paper for the e. C. B. To buy and the a. P. P. That gives them the but this is now. Were looking into the future. Like five, 10, 15, 20 years from now and the next big european crisis. What do those commitments look like . Imagine le pen becoming Prime Minister in trance. What does that look like then . Are they triplea solid or should we provide additional credit support to the e. U. . I think the e. U. Deserves better. Anna really interesting point. Have to leave the conversation there. Morris, thank you so much. Thank you for your thoughts this morning. Coming up on the program, what is going on legally in the e. U. Apples sweet victory. They wane courts fight over an irish tax bill. That is next. This is bloomberg. Anna welcome back to the European Market open. They are down by. 6. U. S. Futures boosted it to the downside. Lets look at the economic challenges the e. U. Has had and the victory we have seen for apple essentially. 1. 6 billion a irish tax bill. Lets look at what the irish finance minister had to say. I always believed such an outcome was possible and ireland has been very clear now over many years that we do not make tax agreements with any company, big, small, here in our country and all tax payers are treated equally. Revalue the relationship that we have with apple like we value the relationship we have with and we do not do special deals for them and this here is a reck nigse in addition of that. You have lived this with t. G years ago. I want you to explain to those in Continental Europe and those of you worldwide that appropriate tax policy for multinationals is not theft from the general taxpayer. Well, i believe it is absolutely imperative that Big Companies are taxed and they are taxeded fairly. I also believe for very big to goies, how were going in the future is also going to change. What is so important about this particular issue is an allegation was made that we were some way treating apple differently to other taxpayers in ireland. It has been settled in way that but the message for me as a finance minister here in europe is that companies whether they are from europe, america or anywhere else in the world have to be taxed effectively and fairly. And this was a really important issue for our tax code. Anna taxing to spending. There is a question. You are the head of a group of 19 finance ministers wholl all get together this weekend for that European Commission meeting where they are going to speak about that frillon euro budget as well as the 758 billion euro plan that has been proposed. How much pushback are you hearing from the frugal four and what has been proposed on bringing this stimulus down . There is the diversity of debate in relation to this particular project within europe and within the European Union. Broadly the point i would make for all to have your viewers across the world, it is a signature example of europe deepening its economic architecture and deepening and making stronger the foundations of the euro. To our e doing that economies in europe to respond to and because this is such a i project, of course but do believe within the European Union, well Reach Agreement on the matter. Some countries, regarding the scale of the bonds and how this money could be used effectively and transparently. Maybe we can find a way to reach an agreement. What does it mean for brussels to see this victory by you today . Well, actually i believe in the building of sovereignty and the sharing of sovereignty and the passionate support of the european project and the deep believer in the process that we have and we need to look at how we can in the future. I would actually regularly make the case in ireland and across europe and the world that the european project economically and politically is an extraordinary achievement the my point of view politically, i want to protect and secure and grow within the future and the commissioner is a commissioner that i have huge respect for who i look forward to working with again in the future. That said, there are always a number of particular areas in terms of how decisions are made and then how they are implemented that are always going to matter to individual nation states and from our point of view, the reason is so create t is that it inference that we use our national sovereignty. That wasnt the case. Recognized by the ruling this morning. I make that argument in the context of somebody who is a european politician believes in the European Union and is sharing the sovereignty. Inside that architect, countries still have roles and duties and their responsibilities and thats why this hearing was so important. Anna the irish finance minister talking progress made in the product Recovery Fund in the days or maybe the weeks ahead. Speaking of course to bloombergs tom keene. Lets take a look at some of the tocks on the move. This is a retailer, online retailer rks heineken, this stock price to is down by 4 for the beer maker. Lockdowns decimated sales. No matter how much people were drinking at home, it doesnt enough to make up for that shortfall. 2 the virus lockdown weighs on demand in the luxury space. Coming up on the program, it is ng up to be a bummer umper quarter for big banks. Well get details on the banking earnings reporting season. Morgan stanley and bank of america report earnings today. Well get an update from dani burger. This is bloomberg. Anna welcome back to the European Market open. Thursday session. 30 minutes down into thursdays session. This is what we have across European Equity markets. He ftse 100, the dak, down etween. 6 to. 8 . The stoxx 600, you can see the biggest losing sector is food and beverage. Heineken, the way that it was not able to offset the lack of demand in pubs and restaurants. Food and beverages the biggest falling sector today. Down 4 . Lets go to bloomberg first news for an update. Coronavirus cases continue to surge in the u. S. California reporting near record cases and fatalities. The worlds biggest retailer is to require customers to wear masks at its stores. Walmart joins starbucks and costco and best buy in the move. A daily Record Number of cases in tokyo. President trump indicated he does not want to further escalate tensions with beijing ruling out additional sanctions for the time being. The decision came before he signed the hong kong autonomy ct on tuesday. China said the law debates International Legislation. President trump has ousted his campaign manager. We have less than four months until voting begins. The white house political director will take the job. Global news 24 hours a day, on air and powered by more than 2700 journalists and analysts in more than 120 countries. Lets talk about the u. S. Banking sector. We have learned a lot. Still more to come. Lets gets the latest on the story. Goldman sachs. Joining the likes of Jpmorgan Morgan and citigroup in smashing estimates. Joining us to discuss dani burger. Good morning again. Are they going to keep rolling in with the two lenders set to report today . That is what were expecting and these big trading numbers from goldman and Jpmorgan Morgan should continue. What we saw in prior results, consumer results, things like credit card delinquency were not as bad. That really is the key to continuing to see these numbers continue to look good. The fed really supporting wall street here. Thats when we get into this question of politics. I think the quote of the quarter comes from the c. E. O. Goldman was too good and that is almost indecent are the words he used. This might have people turn to the fed saying ok. The trillions you enjected into the market seem to have benefited wall street. What say you of what we will do to fix main street when corporate earnings are expected to look grim this quarter . Anna interesting to think about what the politics could do here. Banks industrial targets on their backs going back 12 dwrures or so. 12 years or so. It is going to be really difficult to know, to see these banks beat what they have already done. Goldan 139 increase in fixed trading. Jpmorgan morgan. 120 . These are numbers that are difficult to sustain, especially when you think about what the market has done. It rebounded in march and april and since then it has been a slow slog. If we continue to have the sideways movement, it is hard to see the numbers repeating the results. Really how much more can they give to help support these banks and the revenue they see at them . We have gotten commentary, Jpmorgan Morgan, jamie dimon for example. The trading revenue might be cut in half. Anna thanks very much. Dani burger with the latest on the banking sector. Lets talk about the tech ector. Prominent u. S. Political leaders in a bitcoin scam. They sent out tweets promising to double the money if anyone sentence out funds via bitcoin within 30 minutes. How did this play out then alex . It did it happened across a number of prominent accounts at the same time. It seemed to come not because of their own lack of security but via twitter itself. Yeah. We dont quite know for certain how the hackers did this but the suspicion is and i think twitter alluded to this there was some sort of weakness within the employees. Somehow they got access to one f their employees. Anna we seem to be having some trouble with the lines. I apologize for that. We need to get that connection. Alex, if you can hear us, thank you very much. Well try get that back. We talked about twitter and the twitter hack. Well try to get back to alex on more of that in just a moment. Now what is going on in markets. We lost the enthusiasm around the vaccine that dominated the trade yesterday. Were down. 8 . This is bloomberg. Anna welcome back to the European Market open. The European Equity session moving a little bit lower this morning. Lets get back to our conversation with alex about the twitter hack. I think we reestablished communication. You were just telling us that what had driven the hack or how it had been enacted. It seems that the hackers gained access to one or more of the employees computers or accounts and useded that to post tweets to the twit r accounts of elon en, barack obama, musk. They promised them to double money with bitcoin. It seemed as though they gained aybe 100,000 from doing this. Twitters is response . They shut down every single erified twitter account. Shows that it is definitely the person you think it is tweeting from the account. They shut all of the accounts down. I think they are scrambling to figure out exactly what has happened. As we head into the election cycle, it would mean so much of the debate happens on twitter. It is unclear exactly if that, these conversations, if we know who is actually behind them. Anna thanks very much. Thanks for assisting with this. We have on update on that twitter story. Lets move on to other stories. The Swiss Stock Exchange became he Third Largest operator. They took over b. N. E. Were joined by the c. E. O. Of the Swiss Stock Exchange. Very good to speak to you. Thanks for joining us. Are you happy with the progress and the outcome of the b. M. E. Deal so far . Thanks for having me. Yes, im extremely happy. As we all know, it is not easy to do an m a transaction. Especially of this size. Were happy that we have been able to all the stake holders in spain and switzerland. This is a really good for the industry. And for the exans. Companies. Anna do you think there is a future in further m a with the sktor . Sector . The Exchange Business is a business where the ability to invest, so we continue to be able to invest. In services. Many of the businesses are based. I cant imagine there would be more conservation Going Forward. Many people are looking into this. The biggest transaction. We will focus on materializing and getting the benefits and new revenues and products and services to our customers. Anna let me ask you about your footprint and the fact that you have these operations within the e. U. Not long ago you lost access to e. U. Because of disagreements between brussels and does it change that . Would it be important to you to get a footprint, to get a hold of assets with within the uropean union. Having access is extremely important. It has been solved by a specific measure that the government has taken. The swiss market has gone deeper. We are benefiting from having more market share than ever in ur exchange. We have been in different jurisdictions. We have lots of opportunities and abilities the glow our business within the e. Grow our business within the e. U. Anna what kind of opportunities do you see then having this european operation . What does that enable you to grow . We see of course that one europe, within the e. U. , there is more competition between global exchanges. We think the combination can really attract more European Business and of course continue to have a stronghold in spain and switzerland. Maybe around derivatives. Attracting i. P. O. S. Not only in but it was a data business. We see big opportunities to roll that out into the e. U. And we do lot of and deb it card processing, billing. Mobile payments. That is a big opportunity for us. There are many opportunities. Anna you have been working on taking yes. Many opportunities. I understand you have been working on taking over some of e processes of the swiss banks. We continue the discussion not only with the big banks but the medium and smaller sized banks to make sure we are ready to help them. They are existing in processes where they are not driving and competitive. They want to focus more and more n the customers. For them to be more competitive. A no, sir the international arena. Cybersecurity. Here are many initiatives. Anna do you see banks looking into doing this more because of pressure created by covid . Yes. I think the pressure is increasing. I think so more and more banks are really focusing on the the customers. And want to do less themselves. If there are others that can do better, they are definitely looking more into that. We are the Financial Market infrastructure in europe, in switzerland, in spain who can help the Financial Institutions be more efficient and make some investments in technology instead of having to do that in multiple places for sure. Anna just i want to ask you about Retail Investors. What is your experience of a boom or not in Retail Investors being interested in trading . It seems to be a phenomenon in u. S. And in other places. Yeah. I think with the leaving your money in a savings account. That is not so attractive for many investors. They are looking for opportunities. Wealth management. Of course we also see that more ople are having access or banks. I think that is a phenomenon that will move more into europe. Something that we are preparing for. Also for the Retail Investors. Anna thanks very much. The c. E. O. Of the Swiss Stock Exchange. Thank you very much for joining us. A bit of breaking news coming through on the bloomberg. The e. U. Court has banned the Privacy Shield Data Transfer pabt but the e. U. Court cleared the data clauses. The court gives a binding ruling on the validity of Data Transfers. This has to do with the flow of data out of the e. U. I believe this started with a case involving facebook but has broadened out and has broader implications to do with the flow of data. Well get some analysis what all of that means. It has been a busy couple of days in terms of legal rulings within the e. U. Yesterday the apple ruling and today this one. The Privacy Shield Data Transfer pact. Well get more details on that. Up next, how far will the euro rise with e. U. Film is luis . Ell get to the markets. This is bloomberg. More than economists are forecasting. However retail sales dropped 1. 8 in june. American airlines is telling 25,000 staff they could lose their jobs once government aid expires at the end of september. That is under 1 3 of the total workforce with the carrier blaming the coronavirus which is still affecting the travel industry. The final number will depend on a number of factors. That is your Bloomberg Business flash. Lets gets into the markets now. Our markets live macro strategist. It could impact tech. Well keep an eye on what that does to tech stock. Is it a mixed bag of data from china . Is it the mixed geopolitical flow of news that were seeing . Hat is it do you think that is weighing us down today . The trend that were seeing in markets. The action to the upside and then the downside. Yesterday we had promises of a vaccine. And then overnight we had a firm chinese g. D. P. And then that is being offset by the potentially signs of consumer slowing in china and the twitter hacks. Now just markets early, unsure what where to take their direction from. The e. Sumbings about the e. C. B. Heading into that clear recovery discussion this weekend. I think marks are a little bit waiting to see what happens here specifically in europe. Anna what about what is going on in the euro . People talk about how optimistic they are about burden sharing in the eurozone and looking ahead to the weekend. That is going to be a crurekt factor with the european leaders meeting i think it is the markets are pricing for some variation of the European Commission proposed plan. What macron proposed back in mid may, the euro against the dollar is up about 5 . I think a lot of good news is priced in. It is unlikely that well see some kind of consensus over the weekend given the fact there are restrictions along the actual composition of the plan, grant versus loans. If there is some paths forward the euro is likely to hold on to these things at current levels and some modest upside testing. More importantly, the fact that we are seeing this rotation into european equities away from the u. S. This is largely predicated on this Game Changing fiscal backdrop. What you mentioned, the neutralizeation path even if there is a partial agreement in coming months, it is going to be moving forward and were likely to see this optimism about the european recovery and the backdrop continues to support these underlying trends. Nna thanks very much. For joining with us the latest on the markets. The e. U. Banning the Data Transfer pact that was set up by the e. U. , u. S. And swiss u. S. Privacy framework. It was design bid the u. S. Department of commerce and the European Commission to provide companieses with a mechanism for data protection. Now it seems the e. U. Is not happy with the way the u. S. Is using that data. They criticized the lack of u. S. Surveillance safeguards. This is bloomberg. The e. C. B. Is set to keep stimulus steady today it is a coronavirus tries to economists say bonds to 2 trillion euros. Chinas economy expects a growth. An important milestone. And twitter faces an unprecedented hack on the account ovs prom Nations Capital u. S. Figures including bill den, elon musk and gates. A Swift Response from lawmakers. Welcome
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