In houston. Test the shares rise after hours as Quarterly Earnings beat the streets. Profitability meets the criteria for inclusion in the s p 500. We got a report earlier today that china is moving to close a u. S. Consulate, not being seen by some commentators at as some sit as serious as hong kong. Saying that asian would likely respond to the forced closure of that beijing would likely respond to the forced closure of its consulate. The possibility of potential cuts to its larger hong kong mission. He said cutting the Mission Staff in hong kong to 100 or 200 people is an option. China has pledged to respond to the u. S. Closing its houston consulate. Will come back to that and the Market Reaction in a moment. We are of course into earnings season. Lets get some of the lines from daimler. Considerable Global Economic outlook decline in 2020. In terms of other lines, it sees a bit to be positive in 2020 but lower than the prior year. Considerable it sees a considerable decline in global profitability. It also says that the 2020 view assumes a secondhalf recovery and no new virus wave. That is the assumption. To intensify its efficiency and capacity measures. Roche,alf core eps for comes in at 10. 44 swiss franc 10. 72. The estimate was the first half core operating profit is 11. 77 logan swiss franc. That comes in a little light as well. They expect to increase the dividend in swiss francs further. The outlook for 2020 is confirmed. Those are the main headlines coming through. Got to tell you that we are going to be speaking to the after 9 00 a. M. London time. Read headline from st micro. It sees thirdquarter net at a beat. It is interesting because we also had numbers coming through from texas instruments, also in the chipmaker space. It was positive on the outlook but it did give a strong forecast but urge caution. A little bit of a mixed outlook. Micro, Third Quarter net revenue coming in at a beat. So that was a5. 7, beat as well. In terms of resilience in markets, i am not seeing much of that in china. The csi 300 and the red, on performing underperforming asia more broadly. That is also reflected in u. S. Futures. A saw the s p 500 hit fivemonth high yesterday. Today, you are not seeing a lot of movement in terms of futures. European futures come after we saw europe close in the red yesterday. Europe in the red yesterday, the u. S. In the green. The dollar, march low, fifth day of declines. Futures trading on treasuries. The market closed with japan being closed. Gold mary nine year high. Gold near a nine year high. Injury brazil, and and india accounting for nearly half. The Trump Administration announcing a shortterm extension of unemployment insurance. While it seems unlikely they will reach a broader stimulus deal, they did agree on a portion of the rescue plan. It paves the way for Mitch Mcconnell to unveil the stimulus plan is soonest today. Goldman sachs ceo David Solomon urged more spending. And it though it is hard is expensive, we are better to blunt the impact in the shortterm by spending more than allow it to get worse and deal with the consequences of it getting worse. The hour,ning us for the head of fx and macro strategy and barclays. Great to have you with us as always. The dollar trading near its weakest since march. Yesterday, it had broken a decadelong uptrend. When do you see the dollar we this turning around, and what is going to be the catalyst . Marvin we think that the dollar is likely to start to turn towards the end of the year. Ultimately, it is about growth differentials and risk tolerance. One of the key reasons the dollar had come off, it was coming off a significant high. Everyone had a flight into dollars when everyone was so scared in march. We have just come back to basically the levels we were at in march. Different than the Euro Dollar Exchange rate. But otherwise, actually the dollar is up versus the rest of the e. M. Complex and roughly where it was versus the rest of the g10. I dont see the big downtrend people are talking about. About growthlk differentials being the big reason for your outlook on the dollar. The outlook for the u. S. Largely dependent on what we get out of these stimulus talks. Do you need to see something specific out of the stimulus talks . For example, a cut to the payroll tax . To confirm your dollar view. Marvin i dont think at this stage it is really about specific details. I think it is about making sure we dont have a significant disruption. Has been recovering quite well. Significantly more so than almost any other economy, which is sort of the point as to why we want growth to continue to support the dollar. It is not about any specific item within the stimulus package. It is about making sure we dont have any significant disruption. Nejra what would you see as a significant disruption to your mediumterm outlook for the dollar . Marvin i think one of the key disruptions is if we didnt get to some sort of stimulus deal. Then you have a lot of benefits that are stopping right away. That will have an Immediate Impact on spending. Seriousany sort of deterioration in consumer confidence, Business Confidence the u. S. , associated either with the fiscal package or we have seen a rise in cases. The death rate in the United States has been much lower than many other countries, so it has not seemed to have affected confidence as much yet. Does the change in Consumer Behavior in terms of higher savings rate in the u. S. , coupled with the flow of money into market funds, does that have any implications for the dollar at this point . Marvin i dont think it is a big factor for the dollar but i think it is an important point. For the next 612 months, whatever case that is at, whether it is vshaped, you state ushaped, or otherwise. The only reason they were able to fall the way they were was amidst a massive dissavings by government around the world, was that private savings went through the roof and investment came down. As the economy starts to recover Company Private savings will start to be bit down, firms will start to invest again. But governments are not likely to pull back their spending very quickly. They ult, nejra marvin barth stays with us. President donald trump is sending federal Law Enforcement to several more u. S. Cities, setting up a showdown with democratic leaders. Joining us from or is isombergs four more bloombergs annmarie hordern. President donald trump announcing yesterday a surge of federal agents he will be sending. Oft this is is an expansion operation legend, which he announced earlier in the month, worked alongside the police department. President trump was trying to draw a line and said really the tone of the message was law order. Many are questioning, is this really about policing or Law Enforcement or more about his reelection bid . In november, he wants to be seen as the candidate of law order. He has his eye on the cities of chicago and albuquerque in new mexico. Nejra thank you so much. Lets get to the first word news. Deficit isas budget set to hit a postworld war ii record. The shortfall for the 12 months next june will be around 132 billion u. S. Dollars, more than double what was for the last year. That is according to the governments economic and physical update. It comes amid a sign in spending. Global coronavirus cases have topped 15 million. The u. S. , brazil, and india are the three worst hit countries and account for almost half of all confirmed infections and nearly 40 of all fatalities. Pressure on hospitals seems to have leveled off in some major metro areas in the u. S. Including houston. Test last managed to stay tesla has managed to stay profitable in the midst of a global pandemic. Possible paving the way for the stock to join the s p 500 index. Chief executive elon musk still wants to grow the company, announcing they will build a new plant in texas. 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. Laura wright, nike so much. After the closure of the houston consulate, trump says it is possible to close more chinese diplomatic sites. We discuss, next. This is bloomberg. Nejra this is bloomberg daybreak europe. U. S. China tensions are escalating further. According to the south China Morning post, china is looking to close the american consulate in chengdu. That comes after the u. S. Closed one of chinas u. S. Consulates. Protectd it was done to intellectual property. Trump as far as closing additional embassies, it is always possible. You see what is going on. We thought there was a fire in the one that we did close. I guess they were burning documents or burning papers. I wonder what that is all about. As globals comes times editorinchief said that asian would likely respond said that beijing would likely respond to the forced closing of the embassy, including potential cuts to its larger hong kong mission. Barclays is from still with us. We are still in the early stages of the tensions escalating over the consulate closures. At what point would you expect a significant reaction in fx markets . Marvin i think it has to be something more significant than standard cold war tactics. Conflict some sort of in the south china sea. Issue inwas more of an the golan valley, things like that. This is a tale risk, and certainly one that i think is important and people should be cognizant of, especially the way risk assets are priced, where they are priced only for the good outcome and not necessarily the tail risks. Classicis as pretty cold war titfortat that happened all the time. Im not particularly worried about it now. Nejra we dont seem to see a lot of concern in the yuan. What kind of targets do you have cny . Llar cnh or marvin we do have both going up to about 7. 15 by the middle of next year. That is in renminbi per dollar terms. That is largely reflected in that stronger dollar view we have coming through mostly for the first half of next year. Remember that the chinese basically try to keep the index versus a basket of currencies stable. It kind of puts upward pressure on dollar renminbi there. Nejra do you see the latest escalation and we have not yet seen what most people would see as a more worstcase scenario here, which would be gay closure of the hong kong consulate. Do you see this spat escalating . Nyway into further tariffs marvin i think that president and i think a deal, they will look at that deal as a success. Idea is also been just a to segregate business deals from all of the human rights and. Ther issues i think there is a clear detente on the trade front. That does not mean it could not open again especially postelection, if either side wants to renegotiate and get more from a trade perspective. But i think both sides have an incentive to dlink the two issues right now. Nejra interesting. The environment for Retail Investing has been good for several years, according to the nasdaq ceo, spoke to us about investments in the u. S. Could change in the near future. Adena for Retail Investing has really been pretty great over the last 10 years, frankly. I think that the fees that theil has had to pay, democratization of the markets over the last 1020 years has really been a key trend that has driven the u. S. Markets. I do think that is a longer term trend. Certainly it has driven more demand. Is it a free lunch . This goes back to our relationship with Arthur Levitt and his respect for the individual investor 30 years ago. Schwab says it is free. Td ameritrade says it is free. Is it a free month free lunch . Adena first of all, it really is free for retail. I was at nasdaq with Arthur Levitts during his tenure. He was on a mission to make it so we democratize access to the capital markets. Online brokers have done an in us amount to create services that really do benefit retail. The spreads in our markets are extremely narrow, which means they are getting good executions, and they are now not having to pay commissions to those retail brokers to gain access. For them, it really is free access. The spreads might be narrow. Is there sufficient protections against lawsuits with companies, say, in china, not operating with the same kind of oversight . Adena that is something we have been in active dialogue with the sec about. We encouraged them to have a roundtable recently. The lawyers comedy sec itself, the nasdaq. Rightk to create the disclosure regime for companies coming to the u. S. There are disclosure obligations that companies have coming from china, as well as some reduced thesight the sec has from Accounting Firms. I think the sec is also focused on it. That requires some diplomacy between the United States and china. That is something we have been encouraging them to focus on. You have been proactive about all of this. Can you walk us through what you have done specifically . We have had some concern that we want to make sure we can play our role in addressing. We have increased our oversight of the Accounting Firms used by the chinese companies. We normally rely on the sec for that. But we want to have some old some oversight. We are requiring one member of the Management Team or a consultant to the Management Team to have some u. S. Company experience. All of those things are things that we can achieve. But it is really a broader ecosystem issue where we are trying to make sure the government is working with the Chinese Government to address. The backdrop is important. Alibaba, the grand cayman silent, etc. But then you have the recent wirecard train wreck in germany as well. This is really important to you and your other markets. Do you feel the sec is abrogating its duty . Adena i think the sec has an enormous amount of responsibility and they take it seriously in terms of companies that choose to list in the United States. Companies being very proactive, it is a huge part of their role. Coming up, unity in the u. K. Prime minister Boris Johnson is in scotland to push staying together. This is bloomberg. Of breaking news this hour. Lets recap some of the top lines. According to the south China Morning post, china may close its u. S. Consulate in chengdu. This is in retaliation to the forced closure of the houston consulate in the u. S. China could consider consulate cuts. Anhave also heard expectation of an operating profit this year from daimler. Core eps coming in a little bit softer than expected. This is bloomberg. Nejra good morning from london. These are todays top stories. Stocks for direction as investors weigh the prospect of more stimulus in the u. S. With political tension. Mitch mcconnell could unveil a gop plan today. China is reportedly moving to close the u. S. Consulate in chengdu. Beijing had found retaliation after the shuttering of its mission in houston. This comes as Chinese State tv blacks out the premier league. Confirms 2020 guidance with its pharma and diagnostics unit driving growth. We speak to the ceo. A busy morning for breaking news, both on the corporate front and in terms of an escalation in u. S. China templates. Overall, the msci index treading water. Japan is closed. We saw the s p 500 hit a five high yesterday. Europe closed lower yesterday. Futures are positive. A little bit of a struggling for direction in terms of equity markets with some confusing signals out there. Market weaker for a 30 day. Treasury yield not doing anything because cash markets are closed with japan closed. Ever so pulling back slightly after moving toward a nine year high. 70anged at the moment at per ounce. China is moving to close the american consulate in chengdu. This comes after the u. S. Forced the closure of its houston consulate. Here is what some of our earlier guests had to say about the decision. The breakdown in relationship with china is obviously not a good thing. It is certainly it certainly fits within the fabric of a structural deterioration. We have moved from a period of strategic cooperation with china took a period of strategic competition. It looks at the moment as though china is in the process of losing his most important external relationship, if it has not lost it already. We will have to see what happens with the president ial elections in the United States in november. Trumps administration has been stronger then an administration in a number of years with china. It is important to be demonstrated. Thinks this is going to change china behavior, he is greatly mistaken. Moves like this very much we can the hands of reformers in chuck weaken the hands of reformers in china. The priority we should have as americans is to make sure that our own house is in order. We have been naive in terms of how we have protected ourselves. Nejra one of the things the market has to digest, the consulate fight is showing that hardliners are in charge. Another thing we want to update you on, the global times editorinchief said there could be potential cuts to the larger hong kong mission. You could see the Mission Staff cut to 100 or 200 people. China has pledged to respond to the u. S. Closing the houston consulate. Also increased tensions with the u. K. , bringing in the lucrative world of soccer. Outese state tv is blacking English Premier League football matches. Talk us through why this is happening. We have just been getting the details on this. This is basically going to bring the lucrative world of professional soccer increasingly into this fraud relations between beijing and the u. K. Rights toina has the broadcast premier league matches. It will not show the remainder of the current competition round according to someone familiar. The match between liverpool fc and chelsea fc was not aired last night. A final round of matches is supposed to play this weekend but it is not on the schedule. This would not be the first time that competitive sports has been brought into spats with china. Last year, we saw cctv dropping coverage of National Basketball u. S. Games after an official made some comments in support of the protesters in hong kong. Nejra and what other ways has the relationship between china and the u. K. Been unraveling in recent weeks . This have really seen deteriorate on several fronts. Boris johnsons government , opposed to the security law in hong kong. We have seen it in other ways. There has been this extradition treaty that has been canceled with hong kong. We are really seeing this on a number of fronts. The u. K. Band arms sales. We have seen china accuse the u. K. Of being a catspaw for the Trump Administration and telling reporters this week that london should halt the wrong words and actions. So this ongoing war of words is not just the u. S. And china, but now the u. K. And china. Nejra thank you so much. Lets get to the first word news. Targeting 25 billion euros of extra spending to rescue the economy hit by the coronavirus pandemic. A senior official says the government has approved the plan. The extra money will be used to provide subsidies to local authorities. Solomonsachs david spoke on a webinar, the comments coming as congressional leaders remained deadlocked on a new stimulus deal. He also warned spending now will meet a bigger burden in the future. Softbank recently approached apple in bidding for the chip firm pharma. But, the iphone maker is not going to make an offer, as it would fit poorly with the hardware focused model. No comment from softbank or apple. 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. Ecb president Christine Lagarde says the print says the mix of grants and loans in the rescue package could have been better. Similar concerns among members, arguing that more debt would be difficult for some states. Italys government approved a proposal for extra spending combat the impact. Rth from her glaze is still with us. How much more upside does the u. S. Have to the end of the year based on this deal . According to our forecast, not much. We are almost there right now. But i do think there are clearly risks. We have seen some followthrough momentum after the deal, a deal that was largely anticipated. There is certainly the potential we could go higher from here. But i dont think this establishes a new trend higher. I think this is really a local high. Important, this is an step toward fiscal union but this is not fiscal union. What you would need to see for a material move higher in the euro . Marvin absolutely. Or a significant deterioration in u. S. Growth performance. I think this is one of the interesting things about the euro, the massive expansion of debt in the eu, particularly for the already indebted southern members, is really only going to put pressure on the monetary union. Euis going to push the toward one direction or the other. Different very potential outcomes for the euro over the course of the next several years. Union, achieve fiscal there is a lot of upside to the euro. Ofthey dont, there is a lot downside. Nejra which sort of explains why it might stay relatively range bound at the moment. I want to come back to some comments from blackrock where they basically said that european equities are the best way to play rebound rather than emerging markets. Would you agree with that statement, that a better way to play a cyclical recovery is through the euro rather than emerging markets . Marvin i am not sure i would agree that it is euro specifically. E. M. Would say g10 versus is absolutely an top performer. We wrote a significant piece of Research Last year, highlighting that emerging markets are in trend decline. The decline has been happening for seven years and we dont see an end to end. All of these effects of the pandemic. We just wrote another great annualup piece, in the barclays equity guild study, trendighlight that that is likely to continue because covid really is much more negative for emerging markets the the events economies advanced economies. Nejra i do want people to read that study. We will have to get you back next time and talk about that. U. K. Prime minister Boris Johnson is expected to stress the value of the u. K. In a visit to scotland today. While you have got that rolling support for Scottish Independence of their been called from scotland up until as recently as last month to actually delay the brexit negotiations. Callsou have those two from scotland, how can that potentially impact the pound . Can it be that when there are more growing calls for independence, markets might start to price in a potential delay to sort of appease scotland . Marvin i think that last part is highly unlikely. I think that the government ministers are very clear that they want to get this done and out of the way as quickly as possible. They want this to be a long forgotten memory by the time they get to their next election in 2024. The other thing is that, while brexit seemed like such a huge, disruptive event six months ago, now when you have seen u. K. Gdp quarter, its in a seems like a much smaller event. I do think the scottish issue will grow and increase in markets concerns. Will supporthat the pound and keep it from dropping too much further, one, it is already cheap. This cameast time around, we did a report analyzing what an independent scotland would look like and there is just no way it is feasible. Nejra the other great thing i saw in your work is you talk about a lot of uncertainty after covid generally and if you have sistently high volatility from barclays, thank you so much. At 11 00 a. M. U. K. Time, update on corporate sentiment in the u. K. With the Business Optimism survey. At midday, we are looking out for a Rate Decision with turkeys central bank. And, we will get an update of the u. S. Labor market. Germanys Prime Minister has a meeting with his counterpart. Bill ackerman is on the lookout for a megamerger. This is bloomberg. Nejra this is bloomberg daybreak europe. The u. S. Should have completely shut down the country according to bill iver according to billionaire investor bill ackman. Bloombergs vonnie quinn. If we mishandle this crisis, i. E. We do nothing, we said inlet the virus run around the world, we end up in a very dark place, every business goes bust. We should shut down the country, that was basically my argument. I have made a pretty bullish case that had we taken a hard shutdown, we could have had a better outcome both economically and from a virus perspective. There is going to be a vaccine. It is a reasonably high probability event. We are on the cusp hopefully. I heard from a trusted colleague come on the board of a company, called a chinese vip who is on the board of one of the state owned enterprises in china. He was recently vaccined along with 40,000 other chinese vips. The Chinese Government is 40,000 mosttheir highprofile citizens, they are clearly pretty far along in developing a safe and effective vaccine. Letter to investors in march, you had said thousand people had become very sick. You said, we must learn lessons from this. I was going to mention, you called it, in many ways, obviously that quote, hell is coming, it did, for many people. Can i ask you some questions about the environment now . Are you thinking about relations with china and does that concern you . Bill of course. A globally connected world is a better world and a bigger pie for all to share. A breakdown in relationship with china is not a good thing. At the same time, i do respect the administrations china has been pretty aggressive on issues of intellectual property, for example. I dont know specific details returning the concerning the houston consulate. But you here in the press about document destruction. It does not look good for china. I have a norms respect for the chinese. I think they have built an incredible country, economy. But like us, they are not perfect. The trumpet ministration has been stronger with china than any other Previous Administration in many years and i think that strength is in many cases very important to be demonstrated. I do want to ask you about reports that circulated that the administration is very concerned about hammering the hong kong peg. Do Something Like that happen in our lifetimes . Bill i really have no idea. Nejra ackman also spoke about his newly listed blank check company, a special Purpose Acquisition Company that raised 4 billion yesterday in an ipo. The plan is to create a megamerger with a Durable Private company. How would it work and what sort of company is he targeting . It is called a special Purpose Acquisition Company. He creates sort of a blank check. Raised 4this case billion. It goes out to buy a new company in about 12 years. Once it eyes the company, the company once it buys a , the target automatically becomes public. He hopes he buys a company that is 10 billion or larger in value. He says only about a third of companies that meet the bill meet his quality threshold. He is looking for a company that is cash flow generative, simple, predictive. Some of the names he has floated include spacex, airbnb, palantir. One of the things he is looking for is something that would survive the coronavirus pandemic. He said he does not want Something Like an Energy Company that will go bankrupt. He wants the next big growth company. Nejra how big is the vehicle . They used to have a bad reputation. They were a way to go public and avoid scrutiny that comes with filing for an ipo. Virgin galactic went public this way. This year, the popularity has really taken off. About 20 billion has been raised. It beats the prior record. What we are seeing is the ipo market has come almost to a standstill. So you have these companies that want to raise money. Attractive iny that way because you are not susceptible to the ups and downs. The people raising this money see the recession as an opportunity to buy. Have coming, tesla may soared more than 200 in the last year, but elon musk is still in further expansion still eyeing further expansion. This is bloomberg. Nejra this is bloomberg daybreak europe. Tesla has managed to stay profitable, even in the midst of the global pandemic. For more, we are joined by ed ludlow in san francisco. How did they pull it off . Elon and the rest of the management really pulled on the levers available to them. Regulatory credit played a big role. That definitely boosted margins and kind of warded off the effects of the pandemic. Beyond that, it is really about execution. Thea managed to get around supply chain issues and managed in china and elsewhere. People have a short memory when it comes to tesla but it was only a few months ago that elon was openly defying the authorities in california and keeping the factory open when he was ordered to close it. We know that elon sent out that memo a few weeks ago, and he was quick to thank his employees on the Earnings Call for the work they did to pull off i guess not a surprise profit a profit that the street was hoping for. Nejra great to have you with us. Ed ludlow in san francisco. We have lots of breaking news this hour. Daimler expected to make an operating profit this year. Roche, it is about confirming guidance to raise the dividend. We had from the south China Morning post that china may close its u. S. Consulate in chengdu. The global times editorinchief saying china could consider u. S. Hong kong consulate cuts. U. S. Futures flat after the s p 500 hit a fivemonth high yesterday. That is it for bloomberg daybreak europe. This is bloomberg. Nejra good morning, welcome to bloomberg markets. I am anna edwards live in london alongside matt miller. Today the markets so dont think about it too hard, global stocks shaking off a wall of earnings. . E dark clouds on the horizon the cash trade is an hour away. But no now the terminal, beijin