If we can bring the board up. Gold up 0. 2 . A lot of Market Participants looking at the Earnings Results and european stocks. Now lets get to the bloomberg first word news. Hi, laura. Thanks. Global coronavirus cases have topped 15 million. The u. S. , india and brazil account for nearly half of all confirmed infections and fatalities. Texas reported its biggest daily number of deaths. Australias budget deficit is set to hit a post world war ii ecord. The deficit will be more than double what it was the past year. It comes amid a surge in spending to mitt gate the impact of the virus on the economy. There are still some challenges times ahead. We continue tonight the decisions to provide support in the economy. We do have to get back into situation revival. The employees on their own income rather than rely on taxpayer support. Francine italy funding to rescue the economy hit by the pandemic. Bloomberg has been told the extra money will be used to help businesses and provide subsidies to local authorities. Powered by more than 2700 journal estes and analysts in more than 120 countries. Francine u. S. China tensions escalate further. China closing the american gdu. Late in shen a breakdown in relationship with china is not a good thing. Whereas this is a surprising move, it certainly fits within the fabric of the relationship. We have moved from a period of strategic cooperation with china to a period of significant strategic competition. Thats on every front. Looks at the moment as though china is in the process external its most relationship if it has not lost it already. Well see to see what happens in the president ial election in november. I think that strength is in certain cases very important to be dellin straited. If pompeo thinks this is going to change chinas behavior, he is gravely mistaken. Statements like his and others very much weaken the hands of reformers this china. The number one priority we should have now as americans is to make sure our own house is in order. We keep pointing the finger at china but have been naive in terms of how we protected ourselves. Francine that was the latest we spoke to some of our guests over the last 24 hours. This happened around this time yesterday. It was pretty surprising to a lot of people. Today the market shifts to a lot of earnings focus. We heard from unilever and roche and daimler. You can see the ftse gained 0. 5 . Once again the focus is on stocks climbing amid a pickup in earnings. The dollar slipping to its owest level since january. Offshore treasuries inching up. Should have completely shut down the country according to billionaire bill ackman. If we mishandle this crisis, if we do nothing and sit and let the virus run around the world, we end up in a very dark place. We cant allow that to happen and we shouldnt. We should shut down the country. That was basically my recommendation. I made a pretty bullish case that had we take an hard shutdown, we would have had a better outcome economically. The good news is were going the get through this. There is going to be a vaccine. There are a number of candidates on the cusp, hopefully. I heard from a trusted colleague on the board with a stateowned of the enterprises in china and he was recently vaccined along with 40,000 other chinese v. I. P. s. F china 40,000 most important high profile since the, they are pretty far along developing a safe and effective vaccine. Francine it was actually going to in march we said 1,000 people had become very sick. At the end of that call you said we must learn a lesson from this. I was going to mention that you alled it in many ways. Can i ask you a few questions about the environment now . Very, very briefly . Were almost out of time. Are you thinking about relations with china and does that concern you . Of course. You know, look, i think globally a connected world is a better world and a more a bigger pie for all to share. I think that, you know, a breakdown in relationships with china is obviously not a good thing. At the same time, i do think i respect the administrations china has been pretty aggressive on issues of intellectual property, for example. I dont know the specific detells a of the issues concerning the houston onsulate but document destruction, burning documents in the courtyard, the consulate, it doesnt look good for china. I have enormous respect for the chinese. I feel they have built an incredible country and economy. Like all of us, they are not perfect and i think the Trump Administration has been strongerer with china than any Previous Administration in many years and i think that strength is very important to be demonstrated. Just because you have a history with hong kong, i do want to ask you about reports that the administration is very concerned about hong kong. Does Something Like that happen in our lifetime . I really have no idea. Joining us to talk more about what is going on in china, derek, thank you so much for joining us. Yesterday you gave us a terrific briefing as it was all unfolding. What is the latest today . China is still not quite saying what it is going to do in retaliation for the u. S. Closing its consulate in houston. There was the South China Morning Post saying that china was going to close the u. S. Consulate in shengdu. There has been a suggestion of the global times that suggested that maybe china could limit the number of u. S. Staff at the consulate in hong kong. Chinas administrative Foreign Affairs asked directly about this in a briefing and just concluded gave no additional would be a at proportionate response. Francine there were records the english would be in the firing line. What do we know about that . Thats right. There are suggestions that hina may do with the English Premier League the same thing that happened with the nba and basketball. Not adcaster in china is going to be showing the final weekend of the English Premier League coming up this weekend, the conclusion of the season was a muchwatched event, according to the a person familiar with the plan. Were going to have to see how this one pulls out. Whether china drops it entirely. Whether it goes down from the main broadcaster to something much smaller like an obscure sports tier or similar to that. The inclusion of sports and in diplomacy is a risk hazard and british football is also something that the brits have used for diplomacy with xi jinping. Anything that touches britains biggest sports franchise, would certainly be quite a step indeed. Francine thanks so much. The very latest from the u. S. And china. Coming up, despite a boost from coronavirus antibody tests, ell discuss it with the roche chief executive. This is bloomberg. Francine economics finance politics. This is bloomberg surveillance. Im Francine Lacqua in london. Sales at roche took a hit from the coronavirus pandemic despite the boost of sales from the antibody test. Sales are now recovering. Joining us now is the chief executive officer of roche. Thank you for giving us a little bit of your busy schedule. I want to talk about antibody testing. Is the worlds Testing Capacity sufficient right now . Demand for covid19 testing is clearly outstripping the supply and the bottleneck is not so much with antibody tests. The actually molecular tests which identify whether you are infected or not. Demand is enormous and therefore it is so important that tests are really allocated to those patients with symptoms. Is patients and any source very important that we do everything, every one of us to help or reduce infection rates by keeping social distance, washing our hands, wearing masks. Otherwise it will be very, very difficult to keep up with demand. Francine do you think in this way, we would get a handle on covid19 . I heard you have to test the public at large because what is really worrying people is the do you think it would be enough to test peoples symptoms . As you said, we need to have a careful use of these tests because they are pretty scarce still . Thats exactly the case. As long as we have the scarcity of supply and as long as we are not yet able to meet demand, i believe we have to be very thoughtful about allocating the test in the right way and it is important that we allocate the tests to those patient who is show signs and symptoms over the disease. Francine can we sufficiently est, our capacity, significantly increase the capacity to test in the next three to four months when there is also winter and fall coming n the northern hem spear where hemisphere where we could see a second wave . It has put action capacity over the last four months so im extremely proud of how organization, all of the people who are working day and night, 24 7 over holidays to, you many molecular tests as possible. But it will still take time until we can meet demands. So for the time being, i would strongly advise to allocate molecular tests to those patients most in need and with signs and symptoms. Francine is roche expecting a big second wave of the virus in europe and asia and elsewhere in the coming months . Thats very difficult to predict. It will actually depend on all of us. Whether we keep distance. Whether we keep washing our hands. Whether we keep wearing masks. Where this is appropriate. That is really the only way to keep this virus under control until a vaccine and antiviral medicines. Francine who what should policy makers be doing now to prepare for that . Make sure the population stays as they have been or getting the message across or does it have something to do with medicine . It is about so we stay all vigilant buts the also important to carefully track the disease, to see how it is evolving. Where are the hot spots and then quickly react and intervene accordingly. Part of that is also testing. Take very t is specific measures whenever we see infection rates going up. That is absolutely key before e have medicine and vaccines available. Francine when do you think well have vaccines . Will we have a treatment that works way before a vaccine . There is a number of Companies Working on vaccines. There are tom promising results. We see that there are some promising results. We see people that have been vaccinated developing neutralizing antibodies. There is hope these antibodies will keep the virus in check. Means big that, it Clinical Trials to show the safety. I personally believe it will still take some time until this kind of vaccine will be broadly available to the population. Francine do you think anti bodies, in people that have had covid19, the anti bodies fade quite quickly. Is it different for vaccine . Do we know yet and if not, when will we no . There is a lot Research Going on. We have only known this virus for a couple of months. There is evidence that if you have been infected you are for a certain period of time immune. Even if your antibodies are decreasing again, there is a certain memory function of your immune system. So that if you get reinfected a second time after having gone through a first infection already, you will quickly respond even if you dont have antibodies in your system anymore at this point. Again, there is a lot of Research Going on. We still need to better understand this virus and as we continue to learn, as the science continues to evolve, we will increasingly being b in a position to keep this virus in check. Francine looking at your 15 plunge in revenue in may. What happened specifically in may . That was at the height to have lockdown when letterly Healthcare Systems closed down except for covid19related cases. Healthcare systems were focusing all of their resources simply 19 and patients couldnt visit the doctor or go to the hospital. And of course that meant that there was much less diagnostic testing and there was also a delay of treatment. E good news is since june, the systems have found a new equilibrium. They are able again to treat patients with other severe diseases. We have seen this recovery reflected in our numbers as well. Francine thank you so much for joining us. The chief executive officer of roche with some interesting comments of antibodies and our fight against this pandemic. Coming up, some of europes Biggest Companies are surprising to the upside. Well round up todays earnings update next. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. This is what the markets are looking at. A lot of earnings out of europe and there will be a lot more out in the u. S. The focus is on the spat between the u. S. And china. We are expecting the china consulate fight to go on and we are expecting some sort of retaliation from the chinese side. If you look at dollars, slipping to its lowest level since january. Gold up for a fifth day and the yuan strengthening offshore. Treasuries inching up. There are further tensions between the Worlds Largest economies but i think what they are looking at is some of the numbers out of companies. Coming up, a conversation with mark from u. B. S. Wealth management. That is next and this is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets get straight to the bloomberg first word news with laura wright. Laura china is threatening to retaliate with the u. S. , ordering its closure of the consulate in houston. Newspaper times tweeted the chinese response will cause the u. S. Real pain. South China Morning post reports china may close the u. S. Consulate in chengdu. Closingump as far as additional embassies, it is always possible. You see whats going on. We thought there was a fire in the one we just closed. I guess they were burning documents or burning papers, and i wonder what thats all about. David Goldman Sachs chief solomon is calling for more spending to help revise the economy. The comments coming as congressional leaders remained deadlocked on the new stimulus deal. Solomon also warned spending will mean a weaker economic burden in the future, saying, there is no free lunch. Even though its hard and its expensive, we are better to blunt the Economic Impact in the shortterm by spending more than to allow it to get worse and deal with the consequences of it being worse. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in this isn 120 countries, bloomberg. Francine . Francine thank you so much. Lets go to the markets, a busy day for earnings. Joining us now is mark fla arc fla. Thank you so much mark haefele. The rally that we have seen over the last several weeks, is there a mismatch between the fundamentals or equities right to rally . Mark so far the rally has been pretty narrow. We expect that the rally can do see out and that we upside for stocks in the second half of the year, and that is based on several factors, including the sentiment that we see amongst our investors and Business Owners as we survey them. About half of them call themselves in wait and see mode, but as you have highlighted, there is more fiscal stimulus coming. We have very High Consumer savings rates, and large asset allocators. When we look across, there are very few alternatives to equities right now. Francine so where do you see those alternatives as bringing good value . That movingi think away from, say, some of the u. S. Indices, and looking more broadly in global equities, is a good first step for many investors. We also like u. K. Equities because we see them as a better value, and also being more leveraged as we get further economic improvement from here. Is there anything that feels like it is in a bubble, or because there is centralbank support, even if things are in a bubble, we dont have to worry about it for now . Calling bubbles is very difficult. I think that when you look at what is going on with some of the elements of the tech sector, the nasdaq, and these longduration plays, even the action in the 10 year and concerns or hopes, depending on how you look at it, that the theral reserve may anchor Interest Rate curve, that has given a lot of fuel to the longduration tech names, which also benefited from the stayathome trade. But some of that we think can reverse if we get better Economic Data continuing to come through. Atncine mark, when you look some of the things around the world, how much more stimulus will we actually get . Is it the one thing that should, i guess, support some of the risk assets . Well, i think this news in europe has been very encouraging , perhaps even historic, and that kind of additional fiscal the Global Economy matters. Now we will see what happens in the United States. There is some reason to believe with 3 democrats came billion in a proposal, and the republicans are at 1 trillion, lets meet in the middle. I think thats a possibility. Near term there is going to be some noise as this package gets negotiated. But we do have an election coming up in the United States, and both sides are incentivized to provide voters with something at a critical juncture as we come into the runup to the election. We see more stimulus on the way, and that extra stimulus into markets typically does have the impact of raising the kinds of valuations that you can see. Francine when you look at the composition, a lot of economies ending lockdown and the gradual reopening, or in certain cases the reopening, our markets thinking that this is going to be a tap on, tap off in terms of lockdown, or is that where we could have a dislocation, that we go into full lockdown again and that takes the markets by supplies by surprise . Mark we surveyed our Business Owners, and within half of them are concerned with another lockdown. We really think that we have learned a lot about the virus, and policymakers have much Better Options and going back to these National Lockdowns. We have learned a lot about how ,any people were in the society infected with the virus but asymptomatic, and that is important because now we understand better that it is not as infectious as we originally thought. So we are seeing not a perfect but some combination of mask wearing and social distancing, and also the fact that many people in some societies come in some cities, 20 of the population has the disease. That is reducing hospitalization rates, and we know hospitals are better protected now, have more capacity. We think that the National Lockdowns are very unlikely. Francine what would you do with gold right now . Variety like gold for a of reasons. First of all, we see reasons that the u. S. Dollar can weaken with this stimulus and perhaps concerns coming into the election, and some investors will choose to move to gold as an option. Secondly, in this low Interest Rate world where there are negative real yields, that is an environment that can support gold as well. When you look at regional disparities, you talked about the arrests about the u. S. We have asia, given what is happening with u. S. And china, do you break it down and regional performances as well . What looks attractive right now . Mark well, the Consumer Discretionary in asia looks very attractive to us, as well as some of the Tech Infrastructure in asia. Because china being the first in, there consumers are the first with certainly what we are seeing our Investor Watch survey much more positive sentiment in asia come or increased positive sentiment in asia, and that may lead to some of this pent up consumer savings being unleashed in asia first. I think you are right to hit on u. S. China tensions as being a key theme of the second half of the year because it is certainly going to be one of the election issues that we have to deal with. However, i think for the current administration, they have talked about continuing with the phase one trade deal. I dont think they want to pursue that in a way that meaningfully impacts the u. S. Recovery at this point. Francine we also have a question of the day, and this is being discussed in our live blog. We are trying to figure out whether record savings, slow growth do you worry about people saving more . That as we begin to get a bit more clarity around virus rates peaking in some of these hot spots, and a better sense that lockdowns, large lockdowns are not going to continue, should continue to unleash some of this pent up saving. Francine mark, thank you so much, always, for make us for making us smarter on the markets. Coming up, stockpiling success, sales at consumer goods giant unilever drops more than expected. Chief executive is next. Chief executive alan jope is next. This is bloomberg. Francine this is bloomberg surveillance. Unilever shares at one of the biggest gainers in the stoxx 600 this morning after the consumer goods giant estimates for a slump and Second Quarter sales. Alaner, chief executive jope told Annmarie Hordern how the Company Handled the coronavirus pandemic. N i think what weve seen in the last quarter is the true strength of unilever. The breadth of our portfolio gives us good resilience. We have shown good agility and how to respond to the circumstances, and meanwhile we have been working on the strategic future of the company. We are well past the stock filing phase the stockpiling phase in north america. And there are big shifts with surface hygiene, growing very quickly, and much of our growth in home america is meals as people eat at home. Restaurants hand, are struggling in the current circumstances. Surprised by were how well ice cream like ben jerrys did in north america, given the fact that a lot of tourist concessions had to be shut down. Do you think ice cream and other businesses that you supplied to restaurants, are they going to recover in the second half as more cities begin to reopen . Alan you know, there is a number of Consumer Behavior changes that we are seeing through this pandemic. People communing at home as a safe space, people worried about value. One of the things we are observing is where all shopping online, paying online, browsing online, consuming media online. And can you believe it, our ice cream has managed to pivot from selling out of home, on the go ice cream to take advantage of the boom in home deliveries. See inthe growth that we ice cream is people enjoying ice cream at the and of a meal as part of our Home Delivery service. That is a trend we expect to continue. I also want to make the point that we sit as we sit in western europe and in our america, it ish getting a grip and africa, latin america, having a devastating impact on south asia. We need to be conscious that people are suffering around the world. Annmarie of course, that is a very good point, and a lot of humility you need to ring when youre discussing the impact and changing the behavior. When you look at those changes of behavior, is there anything you can harness to maybe create new brands for more stayathome meals . Is there anything that this pandemic means that you are going to have to look at other brands that you potentially acquire . How does this change your portfolio Going Forward . Alan one of the things that we have seen is that big brands, traditional brands, are doing very well indeed in the current circumstances. Now is a time when people are feeling insecure, and the trust that they have in big, wellknown brands is of even greater importance. We will of course be continuing tolook for opportunities acquire. In this quarter we completed the largest acquisition unilever has done in quite some time, acquiring into Healthy Nutrition with the with brands inside of asia. We will continue to engage in the acquisition process, but at the moment the real news is the strength of the well trusted big, familiar brands. Annmarie you also talked about your key business in the latest report. You are keeping some of the big key empire inhouse, and what other m a do you think is potential this year . Can thendustry industry do more m a in this kind of crisis environment . Alan i would say our position on m a has not changed over the last six months. We are disciplined looking at strategy, price, and timing, and if good opportunities emerge, we are in a strong position with error very healthy Balance Sheet , and taking advantage of that. The other thing we have been working on in the last quarter, we have announced our intention to unify the company, simplify the legal structure of unilever, and further down the road that could give us opportunities to look at more transformational acquisition. That was unilever chief executive alan jope speaking with Annmarie Hordern. Coming up, we will continue the conversation on earnings season. This is bloomberg. I think the environment for Retail Investing has been pretty great over the last 10 years, frankly. Retail has had to pay to be able to enter the markets, the democratization of the markets, to allow them to have direct access to the markets has been a key trend that has driven the u. S. Markets. So i do think that is a longer term trend. The fact that commissions have gone to free has even more demand within the retail environment and with Retail Investors come into the markets this year. Tom is it a free lunch . Our back to this with relationship with Arthur Levitt and his relationship with the investor 30 years ago. Td ameritrade says it is free, you can trade nasdaq shares and it is free. Is it a free lunch . Dena i was with Arthur Levitt during his tenure at nasdaq, and he was on a mission to democratize capital markets. He went a long way in that regard. Online brokers did a lot to create services, and they are getting a good experience. 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 to the markets. It them it really risen really is reactive. Are there sufficient protections against losses in countries like china that are filing for ipo supper here and trading without the same oversight that u. S. Companies face . A that is something we have been in dialogue with the sec about. Whether the underwriters at Accounting Firms, the lawyers, the sec itself and nasdaq and all the exchanges, we play a big role together in trying to make sure we create the right disclosure regime for companies coming to the u. S. , including companies from china. There are some differences in terms of the disclosure obligations that companies have coming from china, as well as some reduced oversight that the sec has on the Accounting Firms that support these companies. So that is an area that we are focused on and trying to create positive change. I think the sec is also focused on it. But that requires some diplomacy between the United States and china, and it is something we have been encouraging them to focus on. Been incredibly proactive about all of this. Can you walk us through what you have done specifically . Adena we have definitely had some concern that we want to make sure we can play our role in addressing, so we have increased our oversight of the Accounting Firms that are being used by the chinese companies. We normally really rely on the sec for that, but at the same time we want to make sure that we have oversight on the quality of the Accounting Firms being used. The second thing were the second thing is we are requiring one member of the Management Team or a consultant with the Management Team to have experience, and we are requiring flow requirements from Companies Like china. It is a broader ecosystem issue that we are trying to make sure that the government is working with the Chinese Government to address. This,he backdrop for folks, is really important here. Alibaba, the uproar over the grand cayman islands, but then you have the recent wire card train wreck in germany as well. This is really important. Do you and your other markets feel the sec is abrogating its duty . Adena i think that the sec has an enormous amount of responsibility and they take extremely seriously in terms of disclosure obligations. They do an excellent job, frankly, of managing the disclosure obligations and reviewing the companies, being very proactive, and writing back questions and comments to companies with their filings, and it is a huge part of their role. Gifcine that was nasdaq executive adena friedman. Has been a busy day for earnings. Running us through some of the numbers is dani burger. Dani i want to start with one number that annemarie hoarder and spoke to earlier. Earnings beat expectations, the loss was not extreme as we thought, in large part thanks to sales in north america, is like hand sanitizer. Because this is usually a weak point for unilever, the Company Announcing they will not sell their tea business in india and asia despite interest from equity firms. Another big gainer because of earnings is dime. Aimler. R is d they see a better environment for 2020 and they will post a profit. It will be less than last year, prepreviously they saw a seeing in they are the first signs of recovery. However, the outlook is assuming that the economy continues its upward path and that we also do not see another outbreak of the virus. Finally, the biggest gainer today is publicist, 16 biggest gains since 2002, avoiding a cliff edge in the u. S. Thanks to some new clients it got for its ad business. Businesses are advertising less, so they have had to make cost cuts, including a hiring freeze in april. Francine thank you so much. Dani burger with the latest on some of the earnings figures. This is what the markets are focusing on. There is a bit of a move when it comes to gold, and also a bit of a move when it comes to treasury and renminbi. You can see the u. S. Tenyear at tom keene joins me out of new york and we will have more of the pandemic situation and stimulus. Our conversation with e. U. Budget commissioner. This is bloomberg. Francine beijing hits back. The consulate spat continues. There are reports that xi jinping may shut the u. S. Consulate in chengdu. Stimulus breakthrough. The white house and republicans reach an agreement on spending measures, easing the way for opening discussions with democrats. And the electric carmaker finally meets the criteria to join the s p 500 as after 12 months of recording profitability. This is bloomberg surveillance. Tom and francine from london and new york. We try to get down to we look of course at the u. S. China spat and the flaring up that we saw yesterday. We expect retaliation from the u. S. , and then we look at the markets. Tom we are going to china in a moment, it is really front and center here. It is all about stimulus. What i would say, francine, is look at the markets, and the markets are speaking this morning. You have further dollar ne