Investors are trying to digest the barrage of dats out of china. The conclusion at the moment is it is negative. Were seeing the s p out of many futures. The real standout here is the c. S. I. 300 stock. China sinking to the worst since february 3. Chinese shares really nraveling. 0. 62. Remember we have a heavy european bond supply in the pipeline. No change is expected. It is all going to be about guidance. Demand for eurosterling ahead of the e. C. B. Policy decision according to some of the fx traders we have been speaking to. Coming under pressure down. 6 . We closeded close to four month highs. Limited support from u. S. Crude inventory helping that trade. Lets get some of the other important stories were following for you. Thanks. Coronavirus cases continue to surge in the u. S. With california reporting near reported cases and fatality. The worlds biggest retailer requiring customers to wear masks. Walmart joins starbucks, costco and best buy in the move. The coronavirused a its highest level with a daily Record Number of cases set to be recorded in tokyo later today. President trump has indicated he does not want to further escalate tensions with beijing ruling out additional sanctions for the time being. His decision came before he signed the hong kong autonomy act on tuesday which calls for sanctions for those who underlie the citys autonomy. There is a growth interference in its internal affairs. U. K. Jobless claims fell in june it is a economy lost fewer jobs than expected. As income kept millions of people in work. Meanwhile bloomberg understands the bank of england governors said u. K. Rates are likely to stay low for a long time, separately a survey finds the British Chamber of commerce found almost 1 3 of businesses in the u. K. Expect to cut jobs and that is in the next three months. President trump has outed brad pascal as manager of his Reelection Campaign as he seeks to reverse a decline in the poles with less than four months to go until voting begins. The former white house political director will take that job. A day the news 24 hours on air. Powered by 2700 journalists and analysts. This is bloomberg. Yousef . Thank you very much for that. Ets get to our top story. Chinas economy year over year reversing a 6. 8 plunge in first quarter. Beating the stims. Retail sales contracting in june. Meanwhile sources say President Trump has indicated that he actually doesnt want to further escalate tensions with beijing and has ruled out additional sanctions top officials point out. Joining us is the chief Investment Officer. Welcome to the program. We have this chinese Economic Data that reflects the credit stimulus spending that came about from the authorities. O you expect more to be done from our policy make rssn given that youre seeing patch ovs weakness still . We want to keep confidence high. What we seen in china is the forecast of what is going to happen in europe than the u. S. The hard parts o ever the economy, the industrial activity can rise very rapidly getting back to work but Consumer Confidence and willingness to spend is trailing. You need to really understand the Public Health issues and the risks. They can increase confidence by taking steps that are socially responsible and give people more confidence. What extent is the selloff were seeing in chinese stocks 5 . He tune of what extent, a reminder of the consequences of being too aggressive with the stimulus measures . I dont think it is there is a risk of being too aggressive. There is a really wide range of outcomes. It is natural that we seize on that data point and you extrapolate it into the future. It gives rise to sharp falls in the equity markets. It is premature to extrapolate that data. R retail sales being weak one period, doesnt mean it is going to be a hard road back. If we can get on top of the infection and Public Health issues. It is an overreaction in short. I think well see different data ining months that will reverse it. One of the earnings that caught my eye in last few hours is the heavyweight player in the chip space. They raised their forecast with 2020 revenue and spending raising the wide expectations for the road ahead. This ties back into what you have been seeing in your research. There is reason to be optimistic with this particular sector in asia. Absolutely there is. I think that what youio have seen during the pandemic is an acceleration of trends. Ecommerce and that has anfect on hardware. There is a sense that as we come out of this, the world is going to change in some ways it will be like driving with the brakes on to some extent but some sectors and industries are going to benefit and we could see a more productive economy come out of this crisis in a year or two and the winners are clearly going to be related to tech. Does it still make sense for me to be overweight in gold in a portfolio given the geopolitical tensions that are changing by the hour between the u. S. And china. Nobody appears to be able to ake up their mind. Well, the deescalation of tension. We welcome more free trade. Trade between the major blocks. Anything that reduces tension is favorable. At the risk of sounding like were i think gold is a very important part of our poirl because it does hedge some of the tail risks on the left hand side. The distribution, when things are really turning bad. I think although we like Investment Grade credit, we have gold for the hedging reason. Now there is also strong trending gold which is helpful when youre looking at commodities but it is primarily a risk device. Rick, hold on. We still have a lot to talk about. Rick will stay with us. Still to come on show, well be looking at what the e. C. B. Might come up with today. Expecting they will leave policy unchanged while e. U. Leaders define their fiscal plans. This is bloomberg. Yousef economic finance politics. Lets get the Bloomberg Business flash stories. Thank you, yousef. Twitter shares fell in late trade after some of americas most prominent business and political figures had their accounts hacked. Bill gates, elon mufpk and Warren Buffett were among those. Elon musk. There was a link to an apparent scam. They suddenly lost the ablete ability to post new tweets. Company says most are working again. Semiconductor manufacturing, apples main iphone chip maker reported a growth margin of 53 also beating stims. Estimates. Helping jouf set lost business from its number two customer huawei. 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 to have total workforce. The carrier blaming the coronavirus that is still battling the travel industry. The final number of redundant people will depend on how many workers take an early out and leave options. That is your Bloomberg Business flash. Yousef . Yousef thank you very much. Lets get into the e. C. B. Discussion. Policy makers are widely expected to keep stimulus steady in todays meeting. Christine lagarde will face questions whether it will be sufficient to boost the recovery. They expect the banks to do more by september. Lso still with us is rick from state street global advisors. The financial have stabilized for the most part. Youre not necessarily looking at a very high bar for the e. C. B. To beat but at any point what would you say is important for them in the coming hours . I think the important thing is they show a willingness or readyness to be open to do more and i think as they say whatever it takes. We dont yet know what fiscal stimulus would look like because the Pandemic Recovery found another instrument that has not yet been fully approved. I hope they are because i think tpwhal a real breakfast through politically. The e. C. B. Will need to be prepared in case we have disappointment. It will be very important that the e. C. B. Will take account of ther conditions within europe. Yousef 500 billion Euro Recovery Fund in play. We gained about 5 . The markets team is putting up the question in terms of what kind of we can see on the eurodollar specifically if the Recovery Fund comes through. Perhaps what are the implications for European Assets if a deal is reached . Yeah, i think there is a deal. Europe looks like it is with a recovery in terms of being able to contain infections. Getting people back to work and restore Consumer Confidence. In a way that is more important than some of the nuance. Lets assume that 500 million or so or ahead, a lot of that is going to had a worse pandemic experience. Germany looks like it is recovering quite nicely. If you have a chinagermany combination recovering strongly, i think that will really help the rest of europe to stabilize into 2021. Yousef in terms over the wider poirl management, youre recommending exposure to risk assets. My understanding is you are selling some of your reets in the u. S. That is every other play book out there. Thats why evaluations are where they are today. Risks you mitigate those risks we have some strong investors. They have had challenges. Value there is a to investors if we have a recovery coming out of the pam. But it is tough. Poirl to ld gold in hedge against some of the portfolio to hedge against some of the risks. We may be in a much more productive economic environment. I think many of the things that accelerated, it may be slow to recover jobs and Consumer Confidence may lag but many parts of the economy may do well. Technology not just in hardware but other technologies is an interesting story even when sometimes it looks a little crowded. Yousef and your biggest position is an Investment Grade credit. Run me through your thinking there. Well, you have extremely strong support from Central Banks. It is not just that were in places the Central Banks are buying. That has an impact in terms of momentum. The debt levels are going to rise. There is a determination that the Central Bank Government to really ensure that the economy recovers and that we dont have widespread disstress. And so for that reason, if we think about the rates and recovery rates, we think the reward from the spread is fair. It is not super generous but it is fair in relation to those risks. We really want to avoid the safe havens. Yousef youre right. A closing thought on the u. S. Dollar. I was reading a piece entitled decade of the dollar. That is an imminent risk as the uptrend break looms. I cant stop counting the number of times i have heard the imminent turn in the dollar bull market. You dont subscribe do that do you just yet . Shortterm were bullish on the dollar. I think one has to recognize a little bit with the evaluation and a fair amount of political uncertainties ahead of us. A safe haven attraction. It is also one of the few that the Central Banks the negative Interest Rates as well. You have a little bit of a baseline spread relative to others in addition to that. But we think that if you roll it a little bit further they will be more cautious and negative about the dollar. Yousef thank you very much. Great catching up. The global chief Investment Officer at state street global advisors. Come up. Twitter hack. Sending tweets promising to double the money anyone sending funds via bitcoin. This is bloomberg. Yousef economic finance. This is bloomberg surveillance. Now the story on twitter. The hack of u. S. Political and Business Leaders in a bitcoin scam. Barack obama, joe biden and elon musk among those whose accounts were hacked promising money to anyone sending funds via bitcoin within 20 minutes. Nate, do we have a rough idea yet of the timeline of how this played out given how sophisticated and likely closely coordinated it was . Exactly. Yes. We know the problem began, escalated and was shut down within a few hours yesterday. By twitter. Which took as far as im aware a pretty unprecedented move in blocking the ability of anyone verified twitter account to tweet anything for hours. So this escalateseded quickly partly because over the significance over the individuals and the Companies Whose accounts were compromised. They all have millions of followers each. A massive potential breach and twitter happened to quickly jump in and essentially say all of these accounts need to have their ability to tweet revoked until they can get on top of the issue internally. Yousef that has already been a precarious time for big tech. What has twitters response been . Well, their response has been they are going to verdict internally what happened here. This is likely to be a case of human error or someone who had their system compromised because of the gravity of the individuals that were affected here and the fact that they were all affected at the same time, it points towards an attacker having access to internal Company Systems although twitter has not commented publicly yet would suggest that somebody had their system compromised in order for that access to have been given to an outsider. Were expecting i would imagine day or tomorrow, we will get something more from twitter how to this took place. Yousef thank you very much. Bloombergs tech editor. Quite a bit pove defensiveness coming through in global markets. U. S. Equity futures lower. European stocks negative and chinese stocks negative into the close. This is bloomberg. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Yousef economics, finance, politics. This is bloomberg surveillance. Im yousef gamal eldin in dubai. Lets get to first word news with leighann gerrans. Leighann the e. U. s top court has issued a stinging a key message to transfer data across the atlantic. The decision means facebook and other companies that transfer commercial data across the atlantic risk a turmoil in the day to day activities. In a ruling which cannot be appealed, the court says e. U. Citizens data just isnt safe. Coronavirus cases continue to surge in the u. S. With california reporting near record cases and fatalities. The worlds biggest retailer is requiring customers to wear face coverings at u. S. Stores. Costco,joins starbucks, and best buy in the move. Raising a coronavirus alert to the highest level with a record daily number of cases set to be reported later today in tokyo. President trump wants and escalateant to further the situation with beijing, ruling out at additional sanctions for the time being. Calling for sanctions against those who undermined the citys autonomy. Na says the u. K. Jobless claims fell in june and the economy lost fewer jobs than expected in the three months to may. Kept millions of people at work during the coronavirus lockdown. The bank of england governor told conservative lawmakers u. K. Rates are likely to stay low for a long time. Separately, a survey by the British Chamber of commerce said almost a third of businesses in the u. K. Expected to cut jobs in the next three months. Selected trump has brad part scale as manager of his election campaign. With less than four months to go until voting begins, he formally served as the white house political director and will now take that job. 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, im leighann gerrans. This is bloomberg. Yousef . Much forhank you very that, leighann gerrans. Another federal official says the u. S. Central bank should consider holding Interest Rates near zero until inflation is above the 2 level. We had next was of interview. We have been saying for a long time that the 2 we should not overshoot it. Ofm supportive of the idea letting inflation get above 2 before we take any action with respect to the fed. Rkers comment echo Randy Kroszner joins us now, the anmer fed governor and th economic professor. Is trying tof men get that inflation number back to 2 . The is specifically around u. S. Core pce inflation rate, which remains far away from that level. Give me a sense of where you stand in this debate. Goal of 2 ,set a and once they set that goal, they have not reached it once. That starts to raise questions about credibility on how committed are they and can they actually do it. I think it is very important for them to discuss that they really do think of it is important to try to change expectations and then exactly as i was talking thet, Start Talking about goaltric nature of the since they might be running a little bit above to try to get an average of 2 . I think it is very important for them to maintain credibility to say that they are going to do it and that they are committed to do it, and that it is running a little bit above to get to the average of 2. Thats ok. Yousef in terms of what we got overnight, some of the Downside Risks are highlighted once again. As you look to sort of the potential highlights of the second half of 2020, what could the fed come up with to try and sustain the fragile momentum that has been created in this phase right here, right now . Think they did everything that was the playbook when i was there a decade ago, and a lot of new things. So i think a lot of this is going to depend on Consumer Confidence. Fedsnot directly in the because they cannot directly change fears about going out, fears about the virus, and as we know, there are more flareups in the u. S. , and were seeing flareups around the globe. That is going to make consumers wary of going out and buying. You see the savings rate going up quite a bit, a commitment to low Interest Rates. But that is natural because of the uncertainty. This is the fed does not have that many more tools to keep the economy moving. They can prevent the financial crisis, prevent things from going off the rails, but it is hard for them to push the economy back up without confidence coming back on the health side. Randy, are you worried that inflation is going to come in harder and harder and maybe get out of the realm of control at thee Federal Reserve moment is convincing everybody it has . Randy that is the key. They want to convince people that they are going to get to 2 , maybe a little bit above 2 , but not too much. That is a tough thing for people a tough thing is for people to believe, that it will be at 2 or above 2 . I am next to our campus here in europe. The challenge here is that with demand not being very strong and we saw that in china, that consumption demand is low, i think we will see low consumption in many countries. You too there will be more of the fighting of deflation rather than inflation. Yousef can i get you to weigh in on a story of interest to our clients around the world . The credit roundtable at the group, theinterest it but the the ebitda seen. The impact of the coronavirus on corporate balance sheets, pushing back against that and there should be regulation that prevents that sort of classification. Do you have any view on that . Randy i dont know the specifics of the accounting issue that youre talking about, but i do think it is very important for people to for transparency around things like these kinds of major challenges, and so i think it is invaluable for firms to provide that information to investors because i think that is very helpful in building credibility for the that investors can understand where the risks are, and i think that also helps markets and investors as well as the firms prepare better for the shocks that may be coming, i cannot comment specifically on the accounting issues there. The atlantic with the ecb, are we going to get any potential for surprise and the guidance or the outlook at all . How do they get the message right on this . Randy it is always tough getting the message right because you have to balance these different pieces. We have been hearing Different Things coming out from the ecb, and a few of the decisionmakers have been saying maybe we do not need to do all the asset purchases because the economy is coming back. My guess is that madame lagarde is not going to go in that direction, that she is going to continue with a fairly dovish tone. I think that we see the weak consumption numbers in china, potential challenges in the u. S. And elsewhere. It would be wise for the ecb to continue to provide support, try to make sure we do not get into a deflation situation. Think they are in a wait and see mode to see what is going to happen in terms of the virus and what happens this coming end of the week with the e. U. Summit, whether there will be three quarters of a trillion dollars of a pandemic related fiscal response. Yousef randy, i always enjoy our discussions. Thank you for joining us today. Randy kroszner. Coming up, apple wins its case against the Corporate Tax bill. This is bloomberg. Yousef economics, finance, politics. This is bloomberg surveillance. Im yousef gamal eldin in dubai. Lets get out to leighann gerrans with the Bloomberg Business flash. Leighann twitter shares fell in late trade after some of americas most prominent is this and political figures had their accounts hacked. Bill gates, elon musk, and Warren Buffett were among those who appeared to send identical tweets about bitcoin with an address linked to an apparent scam. As the hack unfolded, verified twitter account lost the ability to tweet. It is working again. The quarterly profit has exceeded estimates by the widest margin in six years. Taiwans semiconductor manufacturing, apple sup of maine chipmaker, reported a also beating estimates. That is the Bloomberg Business flash. Yousef . Yousef thank you very much. Thecompany apple has won case over its 13 billion tax bill. Spokeish finance minister with bloomberg. Take a listen. I always believed such an outcome was possible. Ireland has very clear now over many years that we do not make special tax agreements with any company, big, small, here in our country, and they have duties, and their responsibilities. That is why this area was so important. Yousef a strong clear message from the irish finance minister there, paschal donohoe. Coming up, it is shaping up to be a quarter for big banks and we will run you through the agenda for the rest of the day. Thank earnings we have quite a few in the pipeline. This is bloomberg. Yousef economics, finance, politics. An expose ofou interview with the commissioner of health and food safety to discuss the global race to quickly develop a vaccine and treatment for coronavirus. In the last few months we have seen that the e. U. Is no longer the epicenter of the covid19 pandemic. However, we are seeing numbers globally increase, and since the lifting of containment measures, local seeing similar increases in some of the Member States, so it is very important for us to be aware that none of us are safe until all of us are safe. We need to have a global approach into handling and , a globalovid19 pandemic. Part of this of course, finding and effect an effective and safe vaccine at a timely time, and also looking for Effective Therapeutics. So the e. U. Commission is leaving no stone unturned in terms of both addressing the issue of Effective Therapeutics for covid19 and of course in finding supporting the of a vaccine. Has the European Commission made any purchase agreements with any Drug Companies as of now . Are two different scales i would like to touch on on this. You must be aware that a few weeks ago, we presented the european strategy for vaccines, our efforts are toward finding an effective and safe vaccine accessible to all as quickly as possible. And in this sense, we are proceeding with all Member States being on board, the go with a number of companies to form advance purchase agreements, in a sense 2d risk the initial development of vaccines so that we can move as quickly as possible. Takes 10 to vaccine 15 years, and through using the european the Emergency Support instrument, which is about 2. 4 billion euro, we are going to be advance purchasing from a number of companies in order to move as quickly as possible with the development of the deployment of a vaccine. This is a process still in negotiation, ongoing with Member States as members as well. I would also like to touch upon the therapeutics. I heard previously you mentioned gilead. Yes, i have been in talks with gilead for a number of weeks now. I have said from the beginning that we and i will leave no stone unturned in terms of therapeutics and vaccines for covid19. Know, an agency, following the commission, give market authorization to in a very on july 3 quick procedure showing the agent the urgency that we see. We will be willing to look at joint procurement on behalf of Member States, 16 Member States, and at present we are in discussions with gilead concerning production capacity, and having the necessary doses for the European Union Member States. Commissioner, washington talks about ensuring the fact that you that u. S. Citizens will get access guy commissioner, washington talks about ensuring the fact that u. S. Citizens will get u. S. Advances first. Will europeans get access to european advances first . Advances that are developed go to european citizens first . Stella let me say from the beginning that what has become very obvious in dealing with this pandemic is that we need to isk at this in a way that global and that there is solidarity. No one is safe unless everyone is safe. That was the European Commissioner for elf and food safety. We are a risk off rally is currently underway, or clear risk aversion, getting reflected on the nasdaq 100. The Economic Data from china clearly showing the path to recovery is bumpy. This is bloomberg. Youseftom this morning, the mee of furlough, to lay off, to rightsizing in july. ,ig and Small Business america europe, adjusting to the pandemic. Masks they are here to there and everywhere. From tulsa to timbuktu, the manley cave. More bank earnings. They will trade in any storm. Good morning, everyone. This is bloomberg surveillance on thursday, and im tom in new york. Guy johnson stepping in for Francine Lacqua in london. Jobless claims in america, hugely important Economic Data, but the real economic conversation will be
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