Approaches. But we took we sent a strong signal to europeans and the rest of the world that we share values and that the union is a you get a values and citizens and that it can answer with strength and in a robust area if needed. European stock futures push higher but the euro dips on the news. Global equities already receive a tail as an Oxford University trial shows promising results. We will be watching novartis. The group ceo joins us this morning. Resume buybacks quarter. Intenseur days of negotiations, eu leaders have agreed on a landmark stimulus package that will see the block help 750 billion euros to Member States mitigate the downturn. Maria tadeo is in brussels. Great to have you with us. Take us through the details of the deal. Aria what we know is that the deal came in at 5 30 in the morning. Everyone here is putting a very positive spin on the news. We heard from Angela Merkel, saying this is an historic moment. Emmanuel macron also saying this is a breakthrough moment. Ofyou look at the specifics this deal, 750 billion euro Recovery Fund, the money that would be given out in grants, now 390 billion euros, that was always floated yesterday as a compromise. Deliveredill be through low interest credit to countries badly hit by the coronavirus. Figure hasllion euro been watered down. Italy and spain would still get a windfall. Just a few weeks ago, we were talking about a typical bailout. This is the first time that we are going to see a joint response, collective debt handled by the European Union, the European Commission in the market, then granted out to countries. So it is a breakthrough. Marketin terms of the reaction, european stock futures pushing a little bit higher after the news. The euro bank slightly. I wonder how this final deal compares to what was already priced into the market. Maria that is also a very good question when you looked at the action in particular in the italian debt market, they had been very well anchored on this idea that the European Central bank is going to stay put and that ultimately the European Union leaders would have to agree to a fiscal package. A country like italy and spain would be the guest beneficiaries for those grants. That is to say that money in other parts of the budget has been reduced to make sure that those allocations would not change too much. So you are seeing potentially a windfall here, a compromise the only country that is not going to get more money is germany but Angela Merkel suggested today that that was the price of a compromise. Nejra thank you. Catch up with you a little later in the show. Lets get to breaking corporate news. The two headlines that you want to draw your attention to is that ubs may resume share buybacks as soon as next quarter but it does depend on the outlook in the second half. Credit loss expenses and the second half still elevated but below the first half. They are saying that while credit loss expenses will remain high in the coming months, they will not match the 540 million posted in the first half. Global Wealth Management attracted nine billion dollars of net new money. It was higher than expected net new money. Also, the bank of course indicating that the worst of the costs to cover soured credit are behind it. Those are the headlines coming through. Second quarter low loss provisions, the estimate was 285. 4 million. , well aboveng in 96. 5 million. Those are the numbers coming in from ubs. We will speak to the ceo and bring you more details on the numbers throughout the hour as well. We have also got numbers coming through from novartis. Atond quarter core eps 1. 36. Ever so slightly later. It is narrowing its fullyear net Sales Guidance to the lower end of the view. Headlinesthe two key to draw your attention to. Sales come ar net little bit softer as well. That core operating income is expected to grow in the low double digits. Coming up, we will speak to the novartis ceo. To the markets. We were already seeing asian equities in the green before we get the news coming in on the equity fund. That deal for stimulus, for recovery post coronavirus. In terms of how futures are positioned, we did see momentum given that news. Also gaining a little bit to the upside. Nasdaq futures are leading. Hit a littlesdaq record yesterday. Nasdaq premium, hundred day average reaching a significant high. Comeback at the start of the week. How much further can those tech stocks stretch relative to the average and relative to the s p 500. We were already seeing some dollar weakness. Ther risk on in the session dollar is pretty much unchanged. The euo, going into Recovery Fund negotiations, we start to question how much was priced in. Absolutely steady on a 61 handle. Foring us, chief economist europe and the americas at Standard Chartered. We are talking about this deal from europe. How much more positive momentum can we get, a European Equity market and in the euro from this deal that was already heavily priced. Alreadyu say, it was very heavily priced. The outcome is probably what has been expected. Discussion starting on friday and the grant elements slightly, a compromise in the end. Once we got to sunday, markets had anticipated that leaders would come away from the meeting witht least something i think the loss of the good news on the Recovery Fund has already been priced in. We did see the euro having something of a lift. Now, what happens to the data . On maybe a bit of reflection how long it will take for the funding to be released. These funds will not come through until really the second half of next year. If we do see a second wave of the virus, that would be something of a set act for european assets. Nejra it is a good point you make about the fact that it is not a quick fix and the timing, we will have to wait a little while for that. The other thing that turned out differently to what was initially proposed is the amount of grant. 390 billion euros. Initially, we were talking about 500 billion. Is that a big game changer, the fact that there will be less toey in grants as opposed loans . Sarah you are talking about an outcome that is 75, 80 of what was originally proposed. I think that the outcome overall is a good one. At one point it looked as if the meeting was going to break down and i think there were several potential points of collapse. So the fact that we have got an agreement and that this agreement has come now is positive there was an expectation that the meeting may have to be reconvened again later this month or even that it could drag on with the agreement of the budget. Result, it is a positive and it certainly will give a lot of support to italy, spain, countries that have been particularly badly hit by the coronavirus. Blackrock has said that european equities, the best way to play a rebound in the Global Economy. Do you think that europe globally is most set to benefit from a rebound in the Global Economy if we see a significant one post pandemic. Sarah they have certainly been among the most hardhit. We should see a better picture for next year. Shown,r analysis has less badly hit by the virus than most Major Economies and the likelihood of a fast rebound is much greater in countries in korea, that were not hit so hard by the virus and managed to keep growth going. I think for europe to rebound will certainly be quite substantial and that is starting from a very low base this year. Hewin from Standard Chartered bank stays with us. Now comedy first word news. For lawmakers are looking the u. S. To take a harder line on china. Sources tell us that the mps want Boris Johnson to impose sanctions on chinese officials over human rights abuses. One mb is calling for a strategic overhaul of the relationship with china. In the u. S. , negotiations are starting over the next Coronavirus Relief package. It comes as republicans are still hashing out an agreement amongst themselves. Are experiencing , itbiggest income shock intensifies the pressure on the chancellor. Forecasters are worn are warning on massive job cuts this year. Billion toadded 13 his net worth yesterday, the biggest single jump for any individual since the bloomberg billionaires index was created in 2012. Bezos is up more than 74 dollars this year. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Coming up, the oxford vaccine. Results were not enough to convince the market. We discuss all the latest developments, next. This is bloomberg. Is bloomberg daybreak europe. More promising vaccine results, this time from the university of oxford and astrazeneca. Showedeveloped vaccine neutralizing antibodies and immune t cells. The market looked unconvinced. Astrazeneca rose as much as 10 in london before giving back most of the gains. Reaching theirre limits. Hub has beenancial caught off guard by the sudden infections, half of which are untraceable. There is more than 100 vaccines in development and over the last 24 hours, it is not the astrazeneca vaccine. What is your take away from the vaccine news flow . Is it just that with so many vaccines in development, this can only be good news, or would you be more cautious about the fact that so many of these vaccines would show a double shot . My main takeaway is caution. There is simply some cause for optimism, a recognition that with so many vaccines in production and trials that we may get something over the monthsof the next few that gives us hope. We have to recognize that scaleg out any vaccine in will take quite a while. In the meantime, economies are facing second waves of the virus. Economict it from an perspective, we feel that this year, growth is vulnerable. Of course, if a vaccine can be found and rolled out in scale, than the outlook for next year is significantly different and significantly improved. Of outlooks, the aussie end cad are now the most efficient in terms of carry trade. Basicallycountries, meaning that those two currencies are no longer hinted by positive yields. The risk of this is if we see a faster recovery that might have given more of a lift to those currencies. , do you see the sands shifting in any way based on stimulus that has been implemented around the world . Some some sarah countries have clearly been able to embark on very significant fiscal stimulus and others have been more constrained. I think that is going to be the feature. Substantial, with probably more to come in the coming weeks. Aggressive stance. That should mean that the u. S. Economy, the contraction we are expecting, for example, is not going to be as great from across the euro area where the fiscal support has been more peace feel more piecemeal and will take longer to come through. Nejra sarah hewin from Standard Chartered bank staying with us. Back with more on the virus next, this is bloomberg. Nejra this is bloomberg daybreak europe. The editorinchief of the Lancet Medical Journal says the latest study out of the university is positive news. He told bloomberg that we should be helpful but public expectations need to be managed. And welle is safe tolerated. Part is that there is a strong immune reaction, and indeed there is a strong immune reaction, and the part of the immune system that needs to be provoked needs to be kicked into action has indeed been kicked into action. One part is producing antibodies. The other part is the t cell response, and that is also strongly provoked by this vaccine. We are in a great position to go forward into phase three. What happens in phase three . In phase three, we need to make sure that these facts these vaccines can actually protect against protection. Doing the studies in a place when there is a lot of virus around. These are being conducted in brazil, south africa, the united kingdom. Take two the you groups of people. One group gets the vaccine. The other group gets a control. Then you see whether the vaccine has indeed protected people from the infection. There is a level of disappointment in the markets. 10 as soonwas up as the study was out, now in this up 1. 2 . Poor people expecting this trial to go better than it has . To be really fair to astrazeneca and the oxford team, i dont think that this study could have gone any better than it has gone. It showed exactly what we were andng it showed, safety that it stimulated the immune response. It could not do more than that. Now what we need are the phase three studies and testing the vaccine among people who work at greater risk of the disease, people who are older and have chronic risk and so on. Lets say that phase three goes according to plan. What is the pressure what is the trajectory that . How soon could i get it in my arm . The fastest vaccine that has been produced in recent times was for zika virus. That vaccine was produced over the course of about 18 months. Vaccineshat we can do very quickly. If we can get the phase three trials completed before the end of this year, everything goes well, then we can press the button forgetting production ramped up around the world, that in 2021. Ve a vaccine is this Something Like the flu, where even if you have a vaccine for the flu, you can still catch it . Or can it be Something Like chickenpox where you can vaccinated and that is it . You are asking the 100 million question. We did not even know this virus existed six months ago. Right now, we do not actually determinants the in the protection, what are the determinants in the dark about what detects us . We dont know 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 need to be helpful, optimistic, but we have to be a little cautious and manage expectations of the public. Nejra that was the lancets editor in chief speaking to bloomberg. After four days of tense negotiations, european leaders came to an agreement about the fund to the tune of 750 billion euros. It will give out 90 billion euros of grants, 360 again euros of lowinterest loans. We will discuss that next, get more details, plus whether we can get more gains in european stocks. 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. Nejra good morning from london. This is bloomberg daybreak europe a 750 billionee euro coronavirus recovery package after more than four days of tense negotiations. The eu councile president says the decision sent a concrete. Ignal on europe we sent a strong signal to europeans and the rest of the world that we share values and the union is a union where we share values and that it can answer with strength and in a robust manner when needed. Futuresuropean stock pushed higher on the news but the euro dipped. An Oxford University vaccine trial shows promising results. Onartis trimmed the forecast pandemic disruption. From sergio hear said they mayubs consider buybacks next quarter. Asian equities firmly in the green. We were seeing a little bit of fluctuation in u. S. Futures before the Recovery Fund news came through. European stock futures expanding gains. Nasdaq hitting another record yesterday. High, thee, a 20 year highest since the. Com boom. Is absolutelyeld steady. We were seeing some dollar weakness overnight. What is interesting is, while we are seeing european stock futures gain, the euro is dipping ever so slightly. We are starting to question how much of a lift european stocks can get given what was already priced in. Fromt to get you some news remy cointreau, lifting guidance after a betterthanexpected first quarter. That is the headline, lifting first half guidance. It repeats that the u. S. And china are two drive a stronger recovery and in terms of organic sales, a decline of 33 . Yesterday was a drop of 43 . That is obviously coming in a little bit betterthanexpected. Resume share buybacks in the Fourth Quarter depending on the outlook at the second half. Lets get back to our top story. After four days of tense negotiations, european leaders have agreed on a landmark stimulus package. Statesebt to help member mitigate the economic downturn from the coronavirus. Maria tadeo is in brussels. Run us through the details. Maria we have a deal, it has taken five days. The 5 00 agreed at a. M. Our. It fell short by just 25 minutes of a record. When you look at the actual details, we have a Recovery Fund of 750 billion euros. The components which have been the figure that was floated as a compromise yesterday, and the rest will be handled through low credit to countries badly hit by the coronavirus. We are starting to get more details with the spanish government, that they will get 72 billion euros in grants. We are waiting to get details from italy. Today, the country cap restart its economy with great strength, also suggesting that there is no need to tapin to the esm here. If you look back at where we were standing just a few weeks ago, it seemed we were going to go the bailout way. Now we are going to get the European Commission collective debt in a joint response to countries badly had. In many ways, you could argue that this is a real breakthrough for the European Union. Nejra it will be interesting to see how they react given that italy is expected to be the biggest beneficiary. It is not necessarily going to be a quick fix. Thank you so much, maria tadeo. Across the atlantic, the u. S. Is also talking about its next relief package. Treasury secretary Steve Mnuchin and House Speaker nancy pelosi are set to meet this afternoon. Sarah, continuing with the stimulus conversation, when it urgent ishe how the need for some kind of result . Sarah it is starting to get urgent because a couple of the key support packages that have sustained incomes for unemployed and encourage businesses to retain workers are starting to run out. So, by the end of this month, there needs to be some signal, i think, about what stimulus is likely to come through. The risk is, having had incomes shored up pretty well through this crisis, that the country could face a cliff edge. That could be very damaging. The sentiment, some of the survey data, the bounceback in retail sales that we saw in the last couple of months could also be vulnerable. Kiefer democrats and republicans to come to some sort of agreement on what size it should be and what form it should take. Nejra one of the points of discussion is a payroll tax cut. Would that be a good idea . Sarah i mean, payroll tax cut obviously doesnt mean that people in employment have got more money in their pockets. It encourages employers to keep staff on. So i think in that respect it would be positive for the employment outlook. I think one of the criticisms at the moment is the funds that has gone to support unemployment job than being employed. So i think anything that can underpin employment and i suppose follow on from the Paycheck Protection Program which, to a certain extent, was successful, that is a good way forward. The spike higher in unemployment was greater in the u. S. Than it was in europe where these job protection programs were implemented very comprehensively very early on. Nejra we are in a blackout period right now for the fed. Toasury volatility, fallen near the lowest on record. Is the Market Making the right assumption that we are just going to have lower for longer for a very long time into the future with the fed, or do you expect any sort of surprises coming through this year . I think the only surprise would be if we were just we were to start to see inflation picking up. The assumption, probably rightly, is that given such a huge global recession, that cost pressures are going to stay low. Weak demand will mean that inflation stays below most centralbank targets. So, the anticipation is that Interest Rates will stay low for long. There is that risk that the supply chain disruption, the cost pressures we see from covid, could start to take headline inflation higher, so we end up in a stagflation environment. Riskyould be damaging and for markets. Central banks would not inclined to tighten policy but you may see market rates moving higher. Nejra you expect the u. S. To contract by 5. 4 in 2020. Thanks so much for joining us this hour. Lets get to the first word news with lower right. The increase in u. S. Virus cases is slowing. In new infections hits the victoria state in australia. There are some promising returns from trials but they raise the twoibility that vaccinations may be needed, not just one. Some calling on the u. K. To take a harder line on china. They will use a visit by u. S. Secretary of state mike pompeo. Sources say they want johnson to impose sanctions over human rights abuses. Calling for a strategic overall of the u. K. s relationship with china. Bayer has failed to overturn the over aury verdict weedkiller that caused cancer. The failure to get the verdict overturned may encourage some of the holdouts. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Nejra thank you so much. Coming up, the stayathome train comes roaring back. We will talk tech gains next. This is bloomberg. The biggest knock against big tech, outsized gains leave little room for big messes. Investors may be quick to flee, especially if an improving economy forces a rotation into other sectors. For apple, the pandemic may delay the iphone 12 and leave the Company Unwilling to give a Sales Forecast for this quarter. Amazon revenue likely grew more than 25 but it is also spending a lot. How much will it spend to keep its Delivery Network moving smoothly. Microsoft is benefiting from a shift to the cloud, but is it giving up now by allowing deferred payments on some contracts . And, advertising edges could disappear advertising budgets could disappear, hurting alphabet. It doesnt take a lot to knock you down a peg. Nejra that was scarlet fu, looking at tech search. Ahead of earnings, the maker Cap Companies gained more than 3 on monday, pushing the nasdaq to another record high. Here to walk us through, dani burger. Run us through some of the stats. On a day yesterday when the average stock dropped average s p stock dropped, the nasdaq gained. It surges to the biggest gap ominousthe two since an echo in history. The last time the gap was this large was at the peak of the bubble in march of 2000. No doubt this was led by amazon, surging yesterday thanks to some promising trends in commerce. Faangeek, much of the stocks dropped. That means that volatility has also surged through the nasdaq versus the s p measure. You can see that, relative to nasdaq volatility measure was pretty low. The fear is, and part of the reason that the volatility is taking higher, with the economy looking to get back on track, perhaps value can come back. Perhaps companies can bring earnings into the fore. That would mean that momentum would start to fall. These growth tech stocks cannot maintain their shine. Nejra what is interesting is that it was quite a painful week comparatively for the nasdaq last week. Some people were attributing that to the fact that we had some good news come through from the virus. We had some good news this week from the virus, yet we hit another high on the nasdaq. Does that confirmed that this rally is about momentum as much as fundamentals . The losses last week, part of it might have been that tech was so high that people thought, now is the time to go ahead and take profits. According to bernstein, the best fixedincome trade once again is equities. Where emerge into a week tech is starting to selloff, you want to get back into the index. About 30 , 40 are these tech heavyweights. Perhaps it makes sense to step in and by what is more of a technical trade than a fundamental one. Nejra dani burger, great work. Group is looking to beef up big business. President mike evans spoke earlier with david rubenstein. Respects, isn some a huge Ecommerce Company like amazon. But in almost every other respect, completely different. Its core operations are in china. It has a very large cloud business, very large ecommerce business. Very significant logistics business. It has become the leader in china with more than a trillion overdollars of sales and 700 million consumers. What it does internationally and particularly in the u. S. Is still a mystery to most people because we dont have a platform in the u. S. , so we are not here selling products the same way that an amazon or ebay or other ecommerce platforms would do. What we do is we sell tens of billions of u. S. Dollars of Great American products from brands, retailers, even farmers, to the Chinese Consumer directly. It is a business that continues to grow. Particularly in the covid environment, the Chinese Consumer has become so important to many u. S. Brands and Small Businesses because that is where they see growth and the ability to benefit. Companiesf american say, there are a lot of Chinese Consumers, i would like to sell to them and easiest way is to set up on alibaba . We have multiple platforms, some for cross borders, some for the big brands like starbucks, png, others that are physically resident in the country. Across those many platforms, we provide the access point for thousands and thousands of brands to sell their products to the Chinese Consumer. Today, the market value is roughly 700 billion, Something Like that. And your number of employees is over 100,000 . About 120,000. It,oday, as i understand many people in the United States want to get products like ppe products, and the only source was china. So you sold a lot of products, i assume, to americans to help them with the covid crisis. Is that right . First of all, there are other sources of ppe. Focus was toipal help source and vet countries as opposed to sell all of those products through our platforms. The work i did for Governor Cuomo for new york state was really not to sell new york state products through our platform but to help source some reliable providers and also that the quality of the products before the procurement teams bought it. So Governor Cuomo contacted you, said we are having trouble getting ppe, and can you help us . A little bit the other way around. I called Governor Cuomo and said, i am a canadian i live in new york city and care about my state and my city. It is becoming clear to me that new york is becoming the epicenter of coronavirus in the United States. What can we do, what can i do to help . He said, this is great. Together, with his team, we did a huge amount of vetting and sourcing for the hospitals. Nejra that was Alibaba Group president mike evans, speaking with david rubenstein. Coming up, we take a look at the stocks to watch this morning, including ubs. The swiss bank signals it may resume buybacks as soon as next quarter. This is bloomberg. Nejra this is bloomberg daybreak europe. Lets get your stocks to watch this morning great to have you with us. Europes first indications of expectations for the rest of the year. It seems that the numbers have come through and guidance on loan loss provisions, plus the possibility of share buybacks. Annmarie they are kicking off for this european Banking System expectations season to the upside. With wall street, one market onlooker said, for goldman sachs, almost a decent result. For ubs, the thing that is in store for the second half could be the share buyback. All of this comes as net profit beat by a massive 269 million. Most of it is outperforming. One division to look at is private banking. We look at loan loss provision, something i have been keeping an eye on. Five of the biggest u. S. Banks put together billions of dollars for that. 272 million. Er that was less than expected. There is still that you have doubt about the uncertainty. The banks are still putting some of that money away but it looks like it will be a bumper quarter for banks in europe and the United States. Nejra of course, the trading will be in focus as well as in the u. S. Forecast,rimming the so not quite so positive here. The results were basically in line. They missed on earningspershare by just a penny. The Sales Forecast is what investors will likely be looking at. Novartis some of their key drugs have suffered in the pandemic. They have seen different patterns and hospitalizations for the pandemic. We will see how both of these open in premarket in the next hour. Nejra in reordering, great work. Annmarie hordern, great work. The funds, lower than what was initially tabled. European futures in the green. The european open is up next. This is bloomberg. Good morning. Welcome to Bloomberg Markets european open. I am anna edwards alongside matt miller in berlin. Matt today, the markets say it is a deal. A 700 50ers agree billion euro coronavirus recovery package after more than four days of tense negotiations. European futures point two gains at the open. The cash trade is less than one hour away. Anna . What wets linger on heard from ubs this morning. My colleague, manus cranny, spoke to the ceo of ubs, sergio ermotti. Numbers coming in better than expected. There is even talk of a share back. Well, andrformed very asset gathering businesses were very engaged with clients and i think that is, you know, during of course, there was a mix seeing the fruits of our investment and technology being front to back. Also the value of was very important, so on that side, i would say that the effects to business, rates, and credit business were very strong, more than 100 up year on year in equities, in