The markets tell a story of what is going on in investor mood and fear. Projections that should be out very shortly. Overall, the focus is on gold. Ever higher, piercing a record as the dollar is sinking. European stocks open lower in general, but the focus is on the treasuries edging up. If itt figure, let me see is out already. It is a good indication on the back of pmi figures better than expected. Index, 90. 5 and a bit better than expected. Lets get to the first word news with leighann gerrans. Good morning. Spain is criticizing the uks returnerso quarantine amid a surge. They say spain is a safe country and working hard to keep infections under control. Alsosh airways and easyjet hit out at the decision, saying it adds to more uncertainty for british travelers and their industry. Europes economy is set to outpace the u. S. Thanks to very different responses to the coronavirus crisis. Surging cases in america are putting the brakes on its rebound, but in europe, many former hotspots have managed to reopen without a similar spike in infections. This relative success may encourage people to spend more and businesses to invest. Is still poised for a Third Quarter rebound according to white house economic adviser larry kudlow speaking to cnn. He said the impact from hotspots in the sun belt is likely limited as he sees a vshaped recovery. Larry kudlow says he thinks the growth rate in the third and fourth quarters is going to be around 20 . The finance industry gender gap looks to be widening as the number of female candidates for top jobs has taken a dip, according to a survey. Up 1 5 of women made applications for Senior Management roles. Last year, the number was around a quarter. Highlighting sluggish efforts to make the industry more diverse. 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 leighann gerrans. This is bloomberg. Francine thank you so much. U. S. China diplomatic tensions continue to simmer, beijing criticizing forced entry into its consulate in houston. According to authorities authorities broke into the complex friday. The u. S. Says it has closed its consulate in chengdu. The closings mark an escalation in tensing in tensions and ray dalio said it could hassle escalate into a capital war. Rate if you say by law, dont invest in china or even possibly withholding the payment of bonds that the United States goes owes payments on in china, these things are possibilities and they have big implications, such as for the value of the dollar. Joining us, peter dixon at commerzbank. The morning to you. What is your take on this u. S. China spat. Or aftereescalation the closing of consulates, is it going to appease itself . Like ait all sounds very bit of titfortat, Embassy Closures and things moved on. This time, things are a little bit more scary. We have a president who is trying to appear hawkish ahead of a president ial election and it is possible things could get a little hotter in the course of the next few months ahead of the election to send a signal. I think investors will want to be cautious about where this could head. Im hopeful however it is not something which we will necessarily see continue into 2021. Francine is the asset most at risk the dollar, for could also be equities . Peter the dollar is clearly in the firing line at the moment. It has weakened quite a moment over the course over recent sessions. Im sure there will be some concerns. It appears at the moment to be a sense many investors are already favoring europe over the United States. So i would expect if tensions ratchet up, you would start to see the u. S. Equity market underperforming. Francine where do you see the most value . Geography . Erms of i would say at the moment you probably want a bit of exposure to the european markets because in addition to the fact that the economy seems to be getting back, the positive environment is a bit more secure, youll also get a bit of Holding Equities with covid rising as well. Europe at the moment seems a good place to be but you know how markets change very quickly. You would want to continue to look at this honor monthly and weekly basis to make sure the factors hold. Thecine when you look at kind of equities that you actually like, i dont know whether expensive is best because they feel safer or theres a bubble brewing in certain equities or frothiness. Peter thats a good question and one many of us are trying to wrestle with. I think during times of difficulty such as weve experienced, the tendency is to go for safe havens despite the fact that valuations are a little bit excessive. Having said that, i think valuations are meaningless. Were in a world of exceptionally low Interest Rates and traditional metrics probably so what we are concerned about is the expense of which some of these traditional safe haven stocks are potentially going to be subject to major disruptors over the course of the coming years. That doesnt mean to say you shouldnt hold them in the near term, but the safe haven bluechip will lose its luster as time goes on. As we head toward a key report in the tech sector, people are looking at the tech stocks and thinking, do we want to be there . Perhaps not but we dont have anywhere else to go. Francine peter dixon from commerzbank stays with us. Coming up, the future of europes biggest economy. Germanys economic recovery from the pandemic. This is bloomberg. Nejra economics, finance, and politics. This is bloomberg surveillance. Im Francine Lacqua in london in london. Biggest tech company sap is selling its stake in its qualtrics unit two years after for 2 8irm billion. Christian klein says the spinoff is winwin. Qualtran it will allow nonsapocus on the Customer Base and second, despite the ipo of cost, sap will remain fully committed to experience management and develop further use cases for customers and that will continue with the joint go to market. Fear, airs worst second wave of coronavirus is holdrned lockdowns could the recovery until next year. The Airline Posted a loss in the three quarters to june and it will lose money the rest of the summer. Ryanair says the virus could hit demand for months to come. Thats your Bloomberg Business flash. Nejra thank you. Francine thank you. Health officials are grappling with a second wave of the pandemic. China has reported them most domestic cases since march. Spain, india, and australia are facing rising outbreaks. Well get the latest with a virus expert this hour but first, lets discuss the Economic Impact. Peter dixon with commerzbank. How difficult is it to model the type of recovery recovery will get given we arent sure if this is a continuation of the first wave . Peter it is impossible, isnt it . We dont fully know how badly the wave impacted upon the economy in the first place. We are getting more indications of that now, but the real issue if it is a second spike, we dont know to the extent economies will recover ,nd if there is a second spike basically however bad the first wave has been in terms of Economic Impact, the second impact will be awful. Were all trying to figure out what going on, but at the moment, it certainly is weighing on investor sentiment. It is weighing on business sentiment, and certainly i think it will act to prevent broadcasts for some time to come. Francine if you look at the wave of infections, how difficult is it do you make geographical difference based on how they are able to deal with the pandemic and whether theyll impose regional lockdowns or is it too difficult to predict . Lufthansa it is to is too difficult but we have to make some assumption and the view would be Going Forward, we wouldnt see the kind of wholesale lockdown we saw this year. I rather suspect well see a series of rolling regional lockdowns. Whether that is parts of the country or one country visavis another remains to be seen but it has been the experience and u. K. And spain that certain cities tend to get locked down. That i think will probably be the path of the future Going Forward because policymakers do not want to damage the economy anymore than they can afford. I ratherquence, suspect the Economic Impact of regional lockdowns would be limited but the effect on confidence will be significantly greater from that perspective and markets i guess, Going Forward. Francine what do you do with tech stocks right now . Good one. You got to hold him right now but the fact is, the markets are priced to perfection. I was looking at microsoft numbers recently. They had a pretty good second solder and still, stocks after the Earnings Announcement so we have a lot of Earnings Announcements this week and i rather suspect the markets are priced for the good news and are looking for more. Tech stocks take a little bit a dip later this week but i think hold them because they will emerge as one of the winners of the crisis even if some of the expectations arent realistic. Francine if you were to describe the earnings season so far, i think 25 of companies and a lot of the earnings last week were focused on cost cuts, this week will be busy with earnings but how do you describe the earnings season . Pete surprising in a sense because companies on both sides of the atlantic have beaten expectations. It surprises me markets are falling for the trick of companies not selling expectations. They havent been quite as bad as anticipated. It has been a decent earnings season but if you look at the figures, markets expect over the next 12 months or thereabouts, we would see a significant rebound. I think those expectations might prove to be misplaced, particularly because the earnings Going Forward will be driven by cost cuts. The outlook Going Forward depends upon the kind of risk guidance we see over the coming days and weeks. Francine thank you so much. Peter dixon, Global Equities economist at commerzbank. The future of europes biggest economy, we will speak with the after german Business Expectations rose to the highest level since 2018. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. On germanyhe latest and businesses have grown increasingly optimistic that Government Support at home with euro area stimulus will drive an economic recovery later this year. Expectations companies surveyed from 91. 6 in june. Joining us, the president of the ifo institute. Overall, does the Economic Data in germany and the wider euro area make you confident well a lessetter slowdown, severe slowdown than expected . There is certainly positive data coming in but we shouldnt forget this data has two components. One is expectation and the other is the Current Situation so the Current Situation is still very bad but the expectation is this is increasing. Companies say this at the lower level in the bad situation. They say it is increasing and thats different than a normal situation and saying it is better. In a way, it is unsurprising the number of Companies Say it is Getting Better because we starting from such a low level. Still, this is a positive sign so we can expect to be on the way to a recovery. Francine the you expect the German Government to provide any additional stimulus in the out turn . Clemens this will depend on how the economy develops until the autumn. Theye Current Situation, would tend not to do so but we dont know what is happening in the autumn era. We may have more outbreaks. People would go back to the shops and spend and what we see is consumers are spending so the concern there will be sluggish consumer demand, this concern is going away at the moment but we dont know what is happening in the autumn. Uncertainty is still very high . Francine what are you expecting the ecb to do extra . Is there anything they could do that would target the right things . Clemens i dont expect them to come up with more stimulus at the moment. The ecb is also seen the economy is recovering. S we still have are not easily addressed. One is the development in the u. S. Theres little we can do about that. The other issue is in the car industry, the recovery is very slow, but i dont think the ecb can address those issues are easily and there has been a lot of stimulus. I think with the ecb is doing now is seeing the impact, being readied active things get worse in the autumn. Do companies tell you about their concern of a second wave hitting germany and what does that mean for their and hiring plans . Do see thempanies situation as a fragile one, is being fraught with uncertainty. Still, they are planning to reduce the workforce further at this moment. Theres no turnaround yet at the ofor market, but in terms the general business situation, they are seeing order flows starting to come again, so there is a certain stabilization but we are not beyond the crisis in arentse that Companies Hiring yet. Francine will the spat or flaring up of tensions between the u. S. And china dent the german animal spirits . Our chief executive is going to be more careful because of that . Clemens they are certainly watching this carefully. U. S. China tensions arent really new. Weve seen this conflict for some time. There were hopes this might go away in the crisis, which it doesnt so this is an ongoing concern. At the same time, the economy in china is recovering so chinese demand for german goods. China is a positive factor at the moment. Certainly these tensions are problem but i dont think they are considered as a major or in any way new obstacle for german companies. Francine clemens fuest, thank you for your time, the president of the ifo institute. Coming up, ryanair books and 185 euros loss in the second quarter. Well bring our interview with the ryanair cfo next. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets get to the bloomberg first word news with leighann gerrans. Leighann good morning, francine. China is planning what he calls forced entry into its houston consulate after officials ordered the office to shut. China says the move rakes diplomatic contention and is vowing to respond as necessary. The u. S. Has lowered its flag over the american consulate in the chinese city of chengdu. It was ordered to leave and retaliation for the closure of the houston mission. Now billionaire investor ray dalio says the conflict between the u. S. And china could expand. He told fox news, washington and beijing could face what because a capital war. He warns there may be rules about not investing in china or possibly even with bond payments. Ray dalio says policies like that could harm the dollar. Hong kong is imposing stricter social distancing measures. The city is limiting the number of people in public gatherings to two, down from four. He does also banning dining from restaurants. Dinein from restaurants. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Cfo does notnairs expect the company to start turning a profit until 2021 as you are Biggest Discount carrier posted a loss of 185 Million Euros in three months. He spoke with nejra cehic earlier. We are planning this year to carry about 60 million customers in our business, a 6 reduction from what we carry last year when we had 149 million. We had a difficult quarter. We lost 185 million. Q2 are somewhat lower than eq one. Nejra so talk about what impact that could have on the numbers. I know is difficult to predict, but if the second wave materializes to the extent that we start to see more quarantines imposed to other countries other than spain, does that mean potentially several quarters of losses . We are notyear guiding for the full year. Youre not going to see profits in the current financial year. I think you will have to look into a next year before you start to see a recovery on that front, and that is why the likelihood of the likes of cash reservation are yearly are usually important at the end of the quarter. It puts us in a Strong Division as we go into the winter period. Equally, there are a lot of competitors receiving significant amounts of aid, which i think is inevitable, which will lead to reduced fares. It is very important that the likes of ryanair right size our business, and we are doing that. We are getting our costs into better shape than it was and we are at reducing labor costs, our airport and handling, we are working with our aircraft manufacturers, reducing the cost of aircraft Going Forward. We are planning for these kinds of scenarios. Trace and track strategy put in place by governments that would help , and off a second wave huge lockdowns. We are hopeful that we see some kind of a vaccine either this year or early next year, which will give people confidence in flying. Thecine joining us on phone with more is our European Airlines reporter. Thank you so much for joining us. Whether the key takeaway what are the Key Takeaways from the reiner numbers . The Key Takeaways from the ryanair numbers is essentially they have seen some growth in demand as they restarted in july. Y are seeing 70 bc occupancy, and they hope to get the question now is whether or not there will be a second wave of the virus as well as whether or not there will be lockdowns as we have seen in the case of spain over the weekend. Francine what does that mean for Budget Airlines as opposed to the bigger carriers . Do they suffer equally . Siddarth budget carriers have been trying to make the most of summer. Essentially it has always been the case for shorter carriers that shorthaul carriers making a recovery faster than longhaul carriers. This is cutting into the busy summer season, when people are looking to travel again. Francine you were mentioning the quarantine. The u. K. At the last minute enforcing a foraging on travelers from spain. Are less people going to travel in general because they will be worried about for the quarantines being put in place at the last minute . Siddarth absolutely. By putting in these quarantines at the last woman, it could dissuade people from traveling. People is already seeing buying tickets closer to the date of travel rather than buying them much earlier. With quarantines coming and there with changes to the rules and travel, there will be some sort of for airlines as they get flying with the virus still raging. Thank you so much. As countries around the world face up to the threats of a second wave, we will discuss the science of the pandemic. We speak with paul hunter at the norwich medical school, university of east anglia, next. This is bloomberg. Francine this is bloomberg surveillance. Thats get to the Bloomberg Business with leighann gerrans. Leighann good morning, francine. Hsbc is denying it framed huawei and said it did not spark a u. S. Robe into the company. Instead, it says in only provided information to the u. S. Justice department when it was compelled to do so. The british lender is hitting back at allegations it was involved in the arrest of huaweis cfo. An opinion piece in chinas peoples daily accuse the bank evidence. Threatening firm of her deferred compensation. She says that is because she went public with gender discrimination. Mary has been negotiating for has beenths murray negotiating for three months. She says bridgewater offered her less as ceo. In the emergency sale of the unit that makes parts for european typhoon jets, according to the telegraph. It comes as the engine maker to recover millions of pounds it lost during the pandemic. Is your Bloomberg Business flash. Francine . Francine thank you so much, leann. Health officials across the globe are grappling with second waves of the pandemic. Spain serves as a reminder of the difficulty in stamping out the virus. China hosted the most domestic cases since midmarch, and the pandemic is growing at the fastest pace in the world. The u. K. And a quarantine on travelers returning to the country. Paul hunter, thank you for joining us. It was quite a lastminute decision by the u. K. To impose these quarantines from people traveling back to spain from spain. Are we going to see this more and more . Is this a second wave, a first wave . Has it spiked up weaker than you thought it would . Paul whether it is a first wave or a second wave, it is a matter of words. The reality is we are seeing in a number of European Countries and many countries around the world, situations where previously the disease was in abeyance, it was declining come and now it is increasing again. That is certainly the case in spain. At the beginning of this month, we had about rather more cases in the u. K. At the moment, spain has three times the number of cases in the civilian population overall. We are certainly far from over this. To be honest, i felt we would it untilget away with we moved into september, but clearly it seems to be increasing again quicker than any of us have predicted. Why is it increasing . It seems to be fairly immune to good weather. Is it because the economies have reopened . Is it the way we travel . How do you explain it . Is almostit ipaul it certainly associated with relaxing of restrictions and countries at the moment. Many countries are trying to get back to some semblance of normal we saw this particularly in the United States. States that implemented relaxation early, such as florida, are seeing very severe epidemics, and in texas as well. It is not too unexpected, and we certainly saw what was likely to happen, and what we need to do is look to the u. S. Francine does this disease also impact the young . There seems to be a belief in when you look at the statistics that this is a disease that only affects the people of a certain age or with preexisting conditions. Paul it certainly depends on, if you look at the death rate, the death rate increases with age. It increases particularly to 50 andce you get then accelerates so that by the time youre are in your 70s, if you get the infection, the chance of death is quite higher than your 20s and 30s. If you look at serological studies that suggest that actually the disease, the infection is more common in younger people, they just dont seem to get the acute severe illness. Having said that, it is too there isbe sure, but increasing anecdotal evidence that younger people, even though they dont necessarily have a severe acute illness, may go on to have quite prolonged, quite disability after and may experience severe disability after the infection. Younger people are not so much at a risk of dying but possibly if these early reports are substantiated, increased risk of getting longterm chronic complications. Francine how much do we know about this, professor jack a or . It seems to affect the lungs and now it is seen as cardiovascular. Probably not for a few months yet because generally we the when we talk about chronic consequences of an infection, we are talking about that lastconsequences more than six months. Clearly the vast majority of people infected by this virus were infected less than six months ago. Wait a few actually more months to get enough cases, we will not really know what the longerterm implications are. I suspect that we are going to come lot of publications autumn about what happens to longterm acute infections. Francine what are the three things that you want people to never forget . Is it wearing a mask, is it social distancing . Do we need to adapt our way of life for the next couple of years until we find a vaccine, if we ever find a vaccine . Im quite bullish about vaccine. I think we will have a vaccine. Which of the current candidates in getting itst to market is unclear, but i think one or more of the leaders at the moment will come up with vaccines. Whether that lasts how long is unclear at the moment, but im sure we will be looking at that in the months to come. I think in the meantime, people should continue to try and, where possible, socially distance, keep themselves at home where possible. And when they go out, try to make sure they are not in enclosed, crowded spaces. If you have to go into enclosed, crowded spaces, then do wear masks. But masks are not an absolute guarantee. Masks provide some protection, but not as great as many people would believe them to be. Yes, if you have to go into areas wear a mask, but dont cank if you wear a mask i go into a crowded area. The protection will not be that great. Are you optimistic about a vaccine . It seems people who have had covid19 have antibodies that fade. Why would a vaccine be different . Is this a vaccine that we would have to do every year like the flu . Paul we dont know at the moment how it is going to happen. The thing about you are quite right, immunity as measured by illnesses after a mild may only last about three months. After the most severe illness, longer, perhaps as long as two years. Even though your immunity goes, there is still some residual memory in your immune system so that if you then do get a subsequent infection, it is likely that it will not be as bad as the first time you get it. In fact, there are lots of other coronavirus is. There are a number of other coronaviruses, and the immunity probably last about six months to a year. They generally cause the common cold. The fact that you are exposed to them regularly over many times of your life probably means that by the time you get into your 70s, you have built up some degree of residual memory, which means you will not necessarily get the severe illnesses. So, yes, certainly in the first few years it is likely that we will be offering the vaccine annually, particularly to people who we would normally offer influenza vaccine. A bigger is there chance of getting a treatment that works effectively to significantly reduce the number of deaths, or will that be quicker than the vaccine . We already have. Study, whichvery almost certainly was one of the most effective casecontrol studies conducted in the , asscale in Human History shown dexamethasone substantially reduces has shown dexamethasone substantially reduces the symptoms, but only in the people who are most ill. If you wait and give it to people who are really very sick and then you give dexamethasone, you can substantially reduce the death rate. Ventilators, people needing ventilation. If you give it too early in the illness, it doesnt do any good and might make things worse. There are other drugs coming out. Interferon ina the news, which is another british innovation. That stillws needs to go into bit trials, but initial studies look very promising. Fromg people blood extract recovered patients may well actually be very valuable. Of news quite a lot about treatment, even though the of the drugs such as antimalarial that was being promoted by some bill that by some people that was being promoted by some people turned out to be useless. Francine thank you so much. With a survey that shows that the tender gap is widening, and then we will also talk about gold. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets discuss efforts to improve diversity. The finance industry gender gap is widening, as a number of female candidates who have taken top jobs has taken a dip. Women made up around 1 5 of applications and senior manager roles. Progressghts sluggish on efforts to make the industry more diverse. Lets get more with Bloomberg Opinion colonist Elisa Martinuzzi. Onat to have you surveillance today. For all the talk of women in finance leadership roles, why is there not more progress . We need to look at the data a little bit more carefully. This particular set of numbers iat points to a regression, think this is looking at a wider pool of numbers, and there have been prepandemic, so if you look at the number of women in finance, the executive committee, and the most recent study shows progress. In both of those categories, albeit slow progress, we think of the 2016, roughly 16 executive committees are made up of women, and that was just 20 by 2019. Still, the direction of travel is one in which there is great apathy among leadership. Having said that, if you drill down more closely within finance and the pockets of business where there is great diversity, that is not banking at that is not insurance, and that is not sin tech either. All three of that is not syntech either. Francine we read about women being worse off because of the pandemic. Does it also apply to highflying banking jobs . Elisa the early indications are that across the workforce it tends to be the women that have shouldered a great share of the responsibilities of childcare, homeschooling, for example. That of course could impact. Francine thank you so much. We will get you back on, Elisa Martinuzzi there. Francine u. S. China tensions simmer in consulate closures and arrests over spying allegations. Ray dalio warns a capital war between beijing and washington could hit the dollar. The second wave emerges. Spain scrambles to stay ahead of new virus outbreaks as the u. K. Imposes a quarantine on returning travelers. And gold surges to a record. 2000 an ounce is in sight as concerns over the Global Economy boost demand for havens. Well, good morning, everyone, this is bloomberg surveillance. Im Francine Lacqua in london, tom keene in new york. We are going to have a very interesting week. Last week we had 25 of companies around the world reporting earnings. Many more this week and gold ever higher. On thee markets are move. Quietly last night, washington was turned upside down. It is going to be an extraordinary day in washington. For the global audience, i cannot find words ever for the upsetedn