Come to a deal. We will have more on that, but still a super solid bid. We will break down all of this for you coming up. Coming up we will be talking to richard horton, and also mike wirth, the chevron chairman on the latest takeover. Leaders reconvene in about one hour for stimulus negotiations in brussels. Here with more is michael mckee. There is so many details within this. I guess the bigger question is, is this actually good . Michael that depends on your definition of good and the timing. Timing is the issue with getting the deal. They have been negotiating for quite some time. Everybody is focused on these negotiation. They talked through the night recessing at 6 00 in the morning. They should be Getting Started any with the new idea on the table. The big fight is over how much of the package is going to be in grants and how much in loans and have conditions attached. The frugal for countries led by luxembourg and austria and the danes have said they do not want most of this to go as grants. The head of the European Council billion would390 be in the form of grants, the rest in loans, and that seems to both sides closer to a deal because it is less than originally proposed by germany and france, but more than the frugal four want. There is a feeling they might be able to come to an agreement. That has had the euro bouncing. We will see where it settles today and we see the headlines. It is kind of a light week of data here in the u. S. And in europe. We have stimulus talks starting in washington, but that will be a long process. U. S. , buts go to the i want to get back to what you were saying about the summit. We see the spread between the german and the italians narrowing, but is anyone looking at what italy doesnt terms of reforms . Will this be a trucker style surveillance . Michael that is what we are waiting to see, under what conditions will this loan part be made to these countries. Most of this money is not going to be going out until 2022 or two thousand 23. 023. This is longerterm recovery money, so there is plenty of time to negotiate how to spend it, whatever you get. The question is how much are you going to have to prove to others for what you are doing. Wait really appreciate hearing from you. We turn to another big story in the takeover word, chevron agreeing to bite noble, the biggest transaction since the coronavirus triggered the slump in shale. Joining us now is mike wirth. I really appreciate you taking the time today. I listen to your conference call. The question i have is why now with noble when you could make the argument there is a lot more stuff that will go on sale in the next few months . This is a deal that builds on our strengths, high quality assets at a fair price, a good deal for the shareholders of both companies. It shows why we are different than many others in our second your. This is not just about the permit basin. Noble has a impressive position in the Eastern Mediterranean and west africa, in colorado, so this is a diversified company with assets that fit our capabilities well. There shareholders now have access to a stronger balance sheet, a stronger dividend and they retain upside exposure to eventual recovery in the economy. Alix it seems like the takeover was opportunistic which leads me to believe this is not the start of a chevron buying spree. Is that the correct interpretation . Ike to i think week we are always looking. We have to see a good portfolio fit. There are screens that we look at for any transaction could we have a high bar for these things and we have to believe these are assets that will compete for strength longterm and help us increase drinks longterm. Strength longterm. It has Strong Financial attributes and these are assets we expect to be in our portfolio for a long time to come. We think the time is right for both companies to engage in this combination. Little paperhad a with names scribbled on it, are there any more names on that sheet for possible takeovers . Mike we always have a long sheet of names that we look at, but there is also a strict set of criteria that we apply. We have a high bar and we look to create synergies here and improve returns. This is in line with our strategy, and so we are focused on this transaction paid we think it is a good one for the shareholders of both companies. That is really the focus today. Alix something that was interesting, i wonder what the bigger driver was for you, the International Assets, or was it conventional . Me, whereonal, excuse do you see the biggest appeal . Mike it is all of the above. I think they have been so successful in the Eastern Mediterranean that it does bring geopolitical of complexities that are pretty meaningful. Portfolio,iversified exposure to many different governments and geographies, and many decades of experience i think that is a very nice fit. Their position in the permian is good, but it is not the same scale as ours. I think youve got scale, efficiencies, and their position in colorado, we like unconventionals paid we have unconventionals in canada and in the u. S. In texas and new mexico. This gives us exposure to another basin that is highquality. The portfolio is a nice fit. Alix lets take the unconventional, you mentioned on the call this basin was more advanced. Is the right way to interpret that is when the market opens to sell that might be top on the list to sell . Mark i do not want to say that. What i was saying was we have multiple unconventional , and in thes i said eastern colorado unconventional basin, it is further along in the cycle so the risks are lower than they would be in argentina or canada. The geology is proven. Permianre can to the then the emerging unconventionals and some of the other countries. Sellinglking about assets, now is a really bad time to be a seller. You have any idea of what that price would be . Transactions most are not done based on the price of the day, but on the future. Right now we are in a time where there is uncertainty about the Health Situation of the world, the Economic Situation of the world, and people are somewhat conservative in terms of what theyre willing to do in these type transactions. I think is this is clarified, people will have an opinion on commodity price that begins to allow some of this transaction activity. It is less about the price of the day and more about seeing into the future. Alix we mentioned the International Assets and noble has a position in cyprus. Can you give me a sense of how you view that project based on priceepressed natural gas we are seeing . Mark mike right now oil and gas are in excess of demand so prices reflect that. This field is a nice resource opportunity. There are complexities in the building that field that need to be sorted. It could go into a Natural Gas Market and also into piped gas into a number of markets for that is all part of how a project like this is evaluated , the logistics in investments in the risks. We will work with the partners on that project over time to clarify those alternatives and come up with the right answer. Alix seems like that is a good template, sort of you need the international and the unconventional at the same time. Is that what i will be looking at forward for the industry . Mike certainly for a company like ours, we will not just be a permian player or an unconventional player. We have great strengths in offshore, onshore and across a wide variety of asset. That is important to meet different needs and to be able to develop different types of resources. For us i think you will look for , you know, we want to add quality assets. We have the technology and experience, and a Large Company like ours has capability. We have a broad aperture when we look at these kinds of opportunities. Alix focusing on the u. S. , from when you made your bid for anadarko, we are in a totally different world heading into the elections. Did the possibility of president ,iden coming into play at all whether it is on federal or nonfederal land, can you give me an insight on how that filter went . Mike we view this to the longterm value lens. These assets have a lifecycle that will outlast any individual u. S. Administration and will outlast multiple administrations. These considerations are certainly in the near term important to us as we look at how we run our business and engage with people in washington on matters of policy. The longerterm decisions are not driven by an election in any particular country, but a long view on the stability of the drivers of the economy and the quality of the resources for us to bring it to market and meet the customer needs in a way that is responsible. The Political Considerations are not the first ones we look at. Alix obviously it has to be synergistic, but with the energy plan, the story at of that was that oil industry is in a real trouble if biden gets elected president. How do you think about that as you look at Development Plans and how to allocate capital as drilling starts to come back. Engage with one, we administrations from both sides of the aisle. We try to engage and advocate for things that are good for the economy, good for the environment and good for the country. We have worked with democratic and republican administrations for decades to advocate for sound policies for the country. That is what we will do irrespective of the outcome of the election in november. The second thing, we have geopolitical risks in virtually every country we operate in print that is one of the reasons diversifiedhaving a portfolio is important. As you go through time with political challenges in any part of the world, they tend not to pile up at the same time everywhere. We manage these through good local relations and delivering on what we commit, but we also manage risk by having a broad no wonderrtfolio so region is critical to our future that a nearterm political challenge begins to threaten the enterprise. Question, at technical point, noble had one rig going as of may come and have oil prices around 40. How quickly might you ramp up your Unconventional Oil production here . Mike it is a little bit early for us to come up with any guidance on that. We had 20 rigs running last year, and we are down to a number lower than that right now. As we look through our planning processes into 2021 and beyond, we will make decisions about allocation of capital and activity based on how we see markets unfolding. It is early for me to speculate on how many breaks we might be running next year. Alix i really appreciate your time today as always. I know it has been a long morning. Posing a risk to the broader market, according to sean darby, and we will break that down next. This is bloomberg. Coronavirus vaccine being developed by the university of oxford, at astrazeneca has shown promising. Target the virus, and it was published today, and the sident and republics and republicans in congress have one more chance to keep the economy from getting worse. The four countries that have been holding up the e. U. Rescue package are set to sign off on a key proposal, the countries are fund beingith the made available. The rest will be in the form of low interest loans and the leaders will meet again to work out the remaining issues. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Francine joining us is sean darby. When you look at that leader summit, it seems that it has already make dan price into the markets paid what more can european stimulus take on too push up the equities . I think european equities are trending below that normal , so underperforming since like march on the global indices. Number two, a great deal of optimism is around the fact that this is the first time weve had some form of common issues, something very similar, and i think that takes a lot of the skepticism over the future. The other thing to bear in mind is that the money will be spent next year, sink for the equity markets that is a nice 2021,lity for going into so a lot of the money will be pushed into these economies and also it is being done via sectors or industries rather than necessarily just by a regional country basis. There is a lot of subtly to the european package rather than just the headline numbers in terms of amounts being spent. Alix with the exception of u. S. Tech, the european equities have been outperforming u. S. Equities over the past month. You think that that will continue . That the good news is looking at the unwinding of global and u. S. Money market funds, it seems that at least equities are getting a strong bid now after months of relatively an orphan class i think the good news for europe is that the base effects are probably less baked in been in the united states, a lot more optimism potentially for share prices and earnings to revive. I think in the u. S. Case the high concentration of ownership in tech is a concern because 22 of the s p 500 concentrated in just five stocks makes it a sort of fragile rally in some respects, at least something that European Forces do not necessarily share, that correlation of stocks or the high correlation to each other is not something present in europe and perhaps is the main drawback for the u. S. Equities at the moment. Francine we expect a lot of Earnings Report later in the week. What will you look out for . It is difficult to know what happens to lockdown, whether we go back to partial lockdown or for lockdown and what that means. Sean it is quite an interesting time. I think the good news is the weakness of the dollar over the last three months is going to give the S P Companies a big tailwind. As we are speaking, that will continue to allow analysts to be relatively optimistic despite some of the domestic issues on covid. And the work that we have done is that the markets are already and theinto 2021 now, current trough is nowhere near as important as what the markets are baking in for the next 12 months. Necessarilyis not as important as 2021 expected to be. I think the third is about diffidence, the reality is that forecast on the dividends we feel that that could be a disappointment for u. S. Companies given the fact that therell be a lot more concentration on restoring the balance sheet, particular if we the number of new covid cases rising globally. I think the dividend story is more challenging indices in. Alix what i am trying to understand, we saw what happened falls, butn netflix what risk are we in if Technology Actually rolls over, and what is the tradeoff . Sean that is a good point. Are bearish onwe the actual Business Models in any way, nor indeed the Balance Sheets. The fact that these companies have good Balance Sheets and good dividends and good visibility in earnings particularly during the Second Quarter has actually allowed those stocks to run hard. Relativealways a earnings gain, and a lot of sectors are beginning to revive the work that we have done suggest that energy and materials looking into 2021 will show better relative Profit Growth and some of the tech companies. It is really when that market decides to look at that come and we think we are coming close to it. I really appreciate at. I note you have been up for like a million hours. Think you very much. The u. S. Congress returns to work this week, the next with libby relief cantrill, coming up, on you on a day where you see the nasdaq outperform, as we inch closer to a europe group deal. This is bloomberg. Live from new york, i am steel. Some states are weighing to impose stayathome orders. President trump many of those cases are young people that would heal in a day had they have the sniffles and we put it down as a test. Percent,t is like 99. 7 people are going to get better. In many cases they get better quickly. Alix this comes as talks on the joiningef bill starts us now is Libby Cantrill read it is back to work for congress, and the question, when do they a deal, what will that what will be in it . Think the question around the stimulus has gone from if there would be a bill to now how big that bill is going to be, and to your point, kind somethingo we expect relatively quickly, and likely going to be bigger than even we have. We were sort of expecting that congress would likely pass something kind of 1 trillion size. That looks more like closer to 2 trillion. Congress breaks for their august earch dice reeses dice recess, so we expect this to be really a question of when not if and likely going to be quite large in size. Where will the second stemless package be spent . Will it hit the right places for the economy and the people need it most . B eco libby that is a great question. This is being called phase four, which is confusing, but this is a phase for bill that will likely include a pretty familiar mix of policies. We expect there to be an extension of the federal Unemployment Insurance, which expires at the end of july that will likely be a lower benefit than the current 600 a week but likely will be included in the bill at some level. We also expect increased state and local funding. If you remember, all of this money, the state and localities have only got 150 billion, so we expect more support for state cities, and also Liability Protection for this is something that is really important and we expect that in the bill as well. Ratchets up in terms of the price tag. Seen at have already red lines. The president s redline, and thennells redline, democrats, state and local, if we have all of these red lines you seem optimistic. I do not see how this can happen. Ibby i am optimistic because think basically almost everything is included. There has been the lines in the sand drawn, but you see some pretty flexible language coming both from the speaker and the majority leader. I think the payroll tax cut does not have a big bid on capitol hill on either side of the aisle. Republicans complain it is too expensive. Democrats complain it only helps people who have jobs. I think im more skeptical that that would be included, but at the end of the day, we think all of these red lines will likely soften. Something will come together. I amf the reasons optimistic is because the , and then of it course political expediency will rule the day. Members of Congress Want to get reelected in november. There is more downside to not passing the stimulus and certainly upside. Francine what would you put in it . We talk about unemployment benefits, Liability Protection, funding for schools and states. What would be your priorities . The u. S. You talk to economy its, certainly the Unemployment Insurance has really helped in terms of bolstering the economy, so some sort of extension of that. I think we could talk about the design of that, does that have a hard stop, expiration, or does he get phased out based on where the and appointment rate is paid i think we would prefer the latter. The state and local funding, i think that the municipalities are in dire need so that would be a party. The Liability Protection, just because for businesses to intart and restart safely, addition to schools, schools have also said that is a priority. Any of the things in the bill are probably the things that most Market Participants are also essential. Alix i am curious as to how you think politicians look at the data that we have seen. Theave a chart showing compensation versus the unappointment rate. If you look at the things like u. S. Retail sales, things are awesome. If you look at the jobless, things look better, but it is because of help from the government. Politicians well think about this and understand ,he dynamics in that good data we need stimulus also. Libby there is a growing realization of that. Members look at all of the data that we see as well. I think that is also a broad understanding that even domain not use the language, that the fiscal multipliers are higher in economic downturn. If you are going to spend money and stimulant, you should do it in an economic downturn. That is exactly what we are seeing in terms of the data. There ist some point more partisan handwringing around this because a few states were more negatively impacted by covid. We have seen that change dramatically, and i think it has increased the chances that we will see additional stimulus. I think the bottom line is they are absolute looking at this, and even if it is reluctant there is a broad understanding that the support has helped. Would President Trump be the winner in the next stimulus package because it helps him in the elections in november . That is an interesting question. House realizeste the importance of the additional stimulus and there will always be some election lands that you are looking through. It is unclear to know where we will be in november. I think there is more downside for President Trump if there is an additional stimulus bit i think he realizes that. Is he the winner . Maybe. Would he be that loser if there is no additional stimulus . Absolutely. I think that is easier to say. Thank you. In the meantime we are keeping an eye on what is happening here. We understand the foreign secretary will set out further measures in response to the imposition of a new National Security law on hong kong, so we will watch what is happening with the house of commons. We will see whether dominic raab says anything on extradition. Coming up, the vaccine being by astrazeneca showing promising results. We will speak with the editor of the lancet, coming up shortly this is bloomberg. Bloomberg. Alix this is bloomberg markets. Here in the u. S. , covid cases are rising, but we also have finalization of the u. K. And the hong kong relationship right now. Francine we have dominic rob talking to the house of commons saying they were extending the arms embargo to hong kong, and the u. K. Has no suspended the extradition packed, so basically authorities in hong kong were looking after someone, the u. K. Would have to send them back for trial in their home country and that has now been suspended. That means there is escalation in the tensions between china and the u. K. , the foreign secretary is setting up for the measures in response to the imposition of a new National Security law on hong kong and we see whether china takes any retaliatory measures against the u. K. Alix a really interesting development. Now it is time for the stock of the hour. As i mentioned, florida cases rising by about 3 . Abigail doolittle has more. Bit of a roller coaster for this stock. For the news itself, positive results on this study by the university of oxford and astrazeneca, a dual sponsor. Abidingsave an coming out and t cells, sue have a defensive reaction and an offense of reaction from the vaccine. Initially but stock popping higher, and it is up a little bit more relative to where it had been the reason it is off the highs, it is earlystage, so more data needed, especially a larger study on human beings. If you look back in history, the fastest vaccine to be developed is ebola which took five years. We have a vaccine in a year, that would be pretty incredible. We do have a number of other in shouldping higher say relative to one of the companies in england as well. Company, and they have shown a drug that lowers the need for a ventilator. These shares are up 3100 this year. This is still a small company, but soaring. Pfizer has had positive results with some of their partners. The u. K. Has promised or taken on 90 million doses of their vaccine along with some of the astrazeneca doses only from a preventative standpoint should they actually come to market. The hope is that montana arerna, and if their rivals doing so well, it might not be so great for them preview can see lots moving all in hopes for the race for the vaccine. Francine thank you. To talk more about this covid vaccine, we are joined by richard horton, editor of the lancet. I feel like we have all become overall adjusts over the last few months, so we are speaking to an expert to understand what this dual response means. De of antibodies enough and the trial inyou have antibodies enough this trial to make sure you do not have the virus again . This shows that that vaccine was safe and well tolerated. This was a important part of the study. The second part is to make sure there is a strong immune reaction and indeed there is. Both parts of the immune system that need to be provoked need to be kicked into action and they have indeed been kicked into action. One part is producing antibodies and the other is this t cell response that is also strongly provoked by the vaccine. We are in a great position to go forward into phase three studies. Alix what happens in phase three . Then we need to make sure this vaccine can actually protect against infections. We need to be doing the studies in places where there is a lot of virus around, so these trials have been conducted in brazil and south africa as well as the united kingdom. You take two groups of people, and one group gets the vaccine and the other gets a control. Then you see whether the vaccine has protected people from the infection. There is a level of disappointment in the market that astrazeneca was up as soon were people was in, expecting this trial to go better than it has . Do not to be fair, i think this study, which was a phase onetwo study, i do not think this study could have gone better. It showed exactly what we were safely,t would show that it stimulated the immune response. It could not do more than that, to have expected more wouldve been totally unreasonable bid now what we need are these phase three studies and testing the vaccine and those people who are at greatest risk of covid19, people who are older or with chronic disease and so on. Alix lets say phase three goes according to plan. What is the trajectory . How soon could i get this . Could slightly disagree with one of your previous commentators, the fastest vaccine that has been produced recently was actually for the zika virus, and that was produced over about 18 months. We know we can do vaccines quickly. In this particular case, if we can get the phase three trials completed at the end of this year and if everything goes well, and then we can press the button forgetting production ramped up around the world, we could have a vaccine in the first six month of 20 21. Aancine is this going to be vaccine like the flu, even if you have a vaccination, you can still catch it because there are various strains, or could it be Something Like chickenpox, where you are done and you never catch it again . Richard you are asking that 100 mahon dollar question. We are only six months into this pandemic, and remember we did not even know it existed six months ago, and we do not actually know what are the oferminants of protection, immune protection. We do not know that. Dark aboutl in the what protects us we do not know how we are protected, to what extent we are protected, how quickly we might get reinfected with this virus. There is a lot we still have to find out. I think we should be hopeful, optimistic, but we need to be cautious. We have to manage expectations of the public because theres still a long way to go. Alix markets do not like that. There is a narrative that says if you need two shots for that kind of immunity, it will take longer to have immunization for the public, which means they push the timeline out. What is the difference . We published the second study at the same time today from a group of chinese scientists looking at their vaccine, and in older people the immune response was not as good as in younger people, and they are going to have to get a second dose of the vaccine to boost the response. That can be done soon after the first dose. That doesnt mean to say you have to wait a long time. We have to know the right dose of the vaccine to produce the right level of immune response. We are right in the middle of figuring that out at the moment. I think the markets should be gratified that we have several vaccine candidates that are making good progress. Francine we also have synergy in, a company here in the u. K. That talked about a drug that could prevent people from going into intensive care. Is that moving more quickly than the vaccine . Are we able to treat it better now . Richard i want to be cautious. It is very exciting what is been reported about this drug. Formulation, very exciting but preliminary. Evidence have clear that this drug is effective. This evidence is not good enough to change clinical practice today. Gotmight remember we evidence that dexamethasone reduced mortality for patients in the intensive care unit, and was 100 clear, and the new evidence is definitely not at this stage yet. We made we need more convincing studies before we can say we have a treatment. Alix thank you. This is bloomberg. Im ritika gupta. The region online marketplace is in agreement to buy this advertising unit, the price about 9 billion and the deal will give ebay a Minority Stake in this company. This billionaire will seek a valuation of more than 200 billion when it goes public. Ais company will pursue simultaneous listing in hong kong and likely to be one of the largest debuts in years. In there revive talks that is your Bloomberg Business flash. Here in new york city, we are looking at phase four reopening, but it is sort of contained. I didnt know if you saw this weekend in queens it was like a block party, everyone drinking and not wearing masks. The governor is not happy about it and now is threatening to shut down bars. Francine it sounds like london actually. Here it is different because we have entered phase two, but a lot of kids went back to school, so it is a little different in terms of reopening. We have various countries in the you and all of them and at different speeds. Dealingngs me to the with the countries that were hit hard by the stimulus. Leaders will reconvene in about four or minutes to talk about whether they can find a deal. The deal has been watered down, and it is a less big deal than we thought we would have heard we are hoping to have something signed later on. It be enough . We will break that down. This is bloomberg. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Live from new york, guy johnson is off today. Were counting down to the european closes. Francine, i feel we are both on similar stories. Its like you have european stimulus, it u. S. Stimulus, when will we get them . The europeans have political favor because of acrimonious negotiations. You see the Franco German alliance no longer holding. It will be interesting to talk about that. A lot of the proposals we were given five or six weeks ago have been watered down when it comes to loan guarantees. Alix does it actually help . Break thatdown down through the next hour. Optimism within the european region, outperforming the u. S. Tech has done well in the u. S. Today. You can look at btp as an example of how americans are feeling about a european deal. You have a solid bid coming