London. Gold is on the move. I also wanted to show you lvmh. It is down quite significantly investors inted disappointing investors with earnings. The picture is that stocks and u. S. Futures are pushing higher today. Cooling somewhat but it did touch 2000 late yesterday. Dropped after the french luxury conglomerate reports earnings that missed analyst expectations because of the lockdown. Lets get straight to the bloomberg first word news. Here is leighann gerrans. Good morning. Senate republicans have unveiled a 1 trillion plan to bolster the economy. The package, announced by mitch mcconnell, includes an extension to Unemployment Benefits but at lower levels. It includes cash handouts of protection from virus lawsuits. We have one foot in the pandemic and one foot in the recovery. The American People need more help. They need it to be comprehensive and carefully tailored to this crossroads. That is what this Senate Majority has assembled. Meanwhile, nancy pelosi delivered a harsh assessment of the plan, calling it pathetic. The European Union looks set to keep its external borders shot to travelers shut to travelers for most of the world. It may last two more weeks and it may shorten its list of 13 countries. The International Monetary fund 4. 3 billion of funding for south africa. It is the largest emergency payout yet to help fight the coronavirus pandemic. South africas government expects the economy to contract over 7 this year. Hit, itore the pandemic was in its longest downward spiral since world war ii. Theysian court has found former Prime Minister guilty on all charges in the first trial linked to the 1mdb scandal. The case involved around 10 million being deposited into his personal account from a former unit of the development fund. Bs lawyers say they will appeal the ruling. New york housing authorities are hamptons. Rt in the Governor Andrew Cuomo says he is appalled by egregious social distancing violations. The organizers say a two second video does not accurately depict that event. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Francine thank you so much. We are just getting some figures from nissan. Loss comingerating in at ¥473 billion, almost doubled estimated loss. We were expecting a figure of 215 billion in terms of the loss and we got ¥470 billion. Nissan sees fullyear operating loss at ¥70 billion. They are suspending the payment of the dividend for this fiscal year. The ecb has also told banks to freeze dividends until next year. That is on extension of the march move to halt payments at least until october. The ecb says its request has kept 30 billion euros of capital in the euro area banking system. First of all, thank you for joining us. How much of a surprise is this . We also know that they will on buybacks stance and dividends in the fourth quarter. They were leaning towards extending the ban. A pretty tough debate on the ecb Supervisory Board on this one, because there are some banks in europe who are doing very well and who have high capital levels. Whoe are some Board Members say we should not be relying on these guys to pay dividends. Others essay the situation in the economy is to unclear say the situation in the economy is too unclear. Many investors had written off the whole year in terms of dividends, which is why you are not seeing such an impact in the stock market at the moment. The question is, does it change next year . When do we go back to business as usual . I think it is pretty tough to keep this in place. The ecb does not have any legal power to keep this in place. There is a whole bunch of banks in europe and it is a lot of work to be doing as the supervisor. Francine we know that bnp paribas out, they were lobbing to resume dividend payments. Ubs had hinted that they may return more capital to shareholders towards the end of the year. Could there be a problem with compliance . Do they just kind of do what they are told, especially ds big banks these big banks . Paribas, a big french bank, was going to promise one of the fattest payouts of European Banks. Whether they comply, i think they will probably have to. The ecb is saying it is a they can force the banks, if they need to. A swissause they are k, under ecb supervision they are a swiss bank, they do not come under ecb supervision. You can go ahead and pay dividends. It certainly could make ubs to be a more attractive prospect than a European Bank who is to pay a dividend. Francine thank you so much for joining us. Up next, revival plan in the u. S. Republicans unveiled a 1 trillion to move this proposal to kick off negotiations with democrats. We will get all the details next. This is bloomberg. Economics, finance, politics, this is bloomberg surveillance. Lets get straight to the Bloomberg Business flash with leighann gerrans. Eroding demand for Luxury Products. Lvmh customers are curbing purchases of highend goods faster than the company can cut costs. Profits came in worse than expected in the first half for the three months through june. Revenue fell 38 . T to be thepect i luxury sectors worst quarter. Revised theirhas fullyear guidance as they continue to benefit from the lockdown. Orders in the Second Quarter rose 94 from a year earlier. It broke its record for monthly deliveries in june with over 100 million. Peugeot maker psa is sticking to its Financial Outlook after generating a profit for the first half of the year. It suggests the french automaker has weathered the coronavirus pandemic better than feared. The chief executive sees a sales rebound in the second half of the year. Guidancel respect this fears, an average overt 2019, 2020 and 2021. We will stick to it. That is your Bloomberg Business flash. Francine thank you so much. Senate republicans have 1 trillioneir rescue plan to bolster the u. S. Economy. Under this proposal, the gop would see a trim in emergency jobless benefits, a second round of 1200 payments to most americans would also take place. The deal is far from being done. Speaker nancy pelosi called the plan pathetic. Joining us now is luke barrs from Goldman Sachs asset management. Good morning to you. When you look at the composition of the markets and what is priced in, how much of the focus is on stimulus and stimulus coming from the u. S. . Luke good morning and thank you so much for having me on. Great question. Our view at the moment is that equity markets do need something to support current valuations. That can be earnings. We have seen through the course of this earnings season, to the extent that expectations became a little bit too bearish and we have seen some positive surprises, that can be the surprise justification of current earnings. We have seen some pretty significant moves in europe and obviously the approval of the physical recovery package in europe will give that market a little bit of an additional stimulus. I think we are expecting to see something similar come through in the u. S. In due course. Francine to support the current valuations, what kind of stimulus to we need . I know you are not a political analyst. Is it a figure or where the money goes . Luke not necessarily the figure, per se. I think in particular, it has to be directed towards the right and appropriate areas of longterm growth. If we are going to see fiscal stimulus that is going to drive infrastructure development, is that being done productively . I think that is a critical part of the european plan. We are talking about roughly a third of that money going to green projects, so subsidizing renewables, but also investing heavily in smart grids and ev charging stations, green agriculture, green buildings. That can put the european economy on a path to Sustainable Growth over the coming couple of decades. If we see something similar in the u. S. , in particular around infrastructure development, that can help underpin a more extended recovery through the next few years. Francine you just mentioned some of the greener things. In europe, the Commission Wants to invest in those. Where overall do you see value in equities . Some of the things look so expensive. I am thinking of technology stocks. What about esg companies . Luke it is a very interesting discussion that we have been having internally around this growth and value dynamic. We are at pretty extended spreads between those two over the last six month or so. If we think about the u. S. Market, it is up around 50 basis points on the year. The median stock is down almost 20 . It really has been those faang stocks, big tech names that are up almost 30 , 35 that have driven the Broader Market recovery. There is some concern if we see some misses on expectations around earnings and we have seen that in the most recent data, some of those Big Technology companies have missed on the margin. Some of the Cyclical Companies have actually outperformed to the upside. We get a small rotation in that growth to value dynamic. That does not necessarily change our longerterm view, which is, a lot of those Disruptive Technology names, a lot of those companies levered into the Millennial Consumer are the place where you want to commit capital, even if you have to accept paying a slightly elevated nearterm multiple. The longterm growth dynamics and the tailwinds these companies are benefiting from, especially in a post covid world , where a lot of these technologies are being adopted at a much more accelerated rate, should actually look to continue to perform very well. Francine how should i look at the post covid world . How will the world be changed forever . What does it mean for the investor looking at equities . We haves, it is a place obviously done a lot of research on in the past couple of weeks and months. What is benefiting in the moment . Because we are in a protracted shut down and people are forced into specific practices and behaviors versus what is really fit to the future. Yes, there will be some lasting trends around work from home and that has implications for office real estate, implications for suburban real estate, very big implications for Cloud Computing and data storage. Some aspects around videoconferencing, which we say is less sustainable as people start to go back into the office. Of course, we are likely seeing very elevated levels in terms of ecommerce penetration over the last three or four months, in particular in the u. K. Or u. S. , where we have seen roughly 10 years worth of growth in a couple of quarters. While that may normalize a little bit, we would expect a lot of those firsttime users of those platforms to continue to utilize them going forward. For us, there is actually a lot of opportunity in that space. What we would highlight, however, is that the scarcity of growth across equity markets is becoming more pronounced. We are now at a point where realistically, only 50 of companies 15 of companies can deliver 8 10 topline growth. Companies who are in negative growth is now at over 50 . It is really about identifying where those pockets of growth are and being very selective and discriminatory. That are a lot of things are just not sustainable. Francine thank you so much. Luke barrs, head of fundamental equity client portfolios in emea at Goldman Sachs, stays with us. Goldman sachs says the pandemic has made everybody adopt the millennial mindset. We will ask if investors need to follow their lead. That is next. This is bloomberg. Francine you are watching bloomberg surveillance. Should investors follow the young . My guest says the pandemic has made millennial transco mainstream. Baby boomers shopping online for groceries. Social interactions hosted online and live streams. Will already expensive tech stocks look like they have been overbought . Lets get back to lvmh from goldmans lets get back to luke barrs from Goldman Sachs asset management. Will it be different regionally . Will people behave differently in tracking the millennial behavior in the u. S. Versus europe and asia . Look, the i mean, reality of the last six months is that we have all been forced to be Millennial Consumers, irrespective of how we have thought about it previously. There has been a necessity to access things like Online Retail platforms. There has been a willingness and desire to access some of those online digital sharing platforms. As i said before, i think the acceleration we have seen, effectively 10 years worth of growth in online commerce in europe and the u. S. Over the course of six months, is pretty astronomic. In terms of regional differences , ecommerce trends were already pretty pronounced in asia and far ahead of what we see in the western world. If you look into korea or china, ecommerce as a percentage of retail sales was already somewhere at 35 . You already had pretty established acceptance of those ecommerce platforms, partly because the populations are more youthful, more comfortable with technology. Consumers have grown up in a world where ecommerce is available to them. The u. K. And u. S. Have started to catch up on that front. Our expectation is that some of those older generations will remain maintain use of those platforms. There will be some degree of normalization, at least in terms of the pace of growth. Francine what does that mean for some of the things that will need acceleration . There is also talk of an online sales tax. Or onlinecompanies places going to be regulated and taxed more . Luke the risk to technology stocks, in particular in the u. S. , is the risk of regulation. At this point, we dont have a good framework for digital, crossborder trade. Even if we were to see some advancement in the narrative around that, i think it is unlikely we will get to a universal, global standard. That does not mean that the companies cannot do well in the event that we do see localized standards and taxation structures. If we are continuing to see growth and adoption, d consolidation of some of these industries, where you have dominant players who can really deliver that value to customers in a pretty seamless fashion, even if you start to see an incrementally higher taxation structure, we still feel reasonably positive about their longterm growth outlook. Of thee is there a part market where you see these trends accelerating which is basically may be the trend we will see in five years, seeing now, where you actually see more in otherrow than parts of the market . Luke yes. We have talked a lot about ecommerce. It has to be very specific to the country or region. It is not that you can pick one company globally. There will be nuances in places like latin america, china that are going to underpin that growth for those individual businesses i think the area we are probably most excited about at this point is in the health care space, in particular around genomics and medicine. It allows you to provide some kind of precision based medical solution through gene editing. Staggering. At this point, we have around 6000 genetic diseases of which only about 5 we have a cure for. The covid crisis has elevated the awareness around Genomics Technology but has not necessarily changed the technology. Francine thank you so much. Luke barrs from Goldman Sachs asset management. Francine economics, finance, politics. This is bloomberg surveillance. Lets get to first word news with leighann gerrans. Leighann good morning, francine. The European Central bank is extending its request. On banks hold off shareholder by payouts. The central bank is asking banks to not pay dividends of buy back shares until next year. That is three months longer than initially indicated. Trumpst Donald National security advisor has tested positive for coronavirus. He is the closest person to the president known to have contracted the disease, but the white house says Robert Obriens infection poses no risk to the president or indeed the vice president. Is out tell bloomberg he of the office since last week. Putns Prime Minister has out quarantine measures for his country. The decision is said to be unbalanced, adding that the Canary Islands have the fewest virus cases in the u. K. Reliant on tourism, spain is desperate for the u. K. To reconsider the move. Germany is warning rising infection rates could reignite the virus. It is calling on people to stick to containment methods. Germany is planning to make testing rather than selfisolation mandatory for travelers returning to the area. The chief of staff of angela itkel says it makes heightened during the fall more likely. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, im leighann gerrans. This is bloomberg. Francine . Francine thank you so much. Lets talk about the race of a vaccine to prevent the spread of coronavirus. Those who are most at risk in the u. S. , the elderly and first responders, will receive the vaccine first if the f ea gives emergency if the fda gives emergency approval. Will underf moderna the vaccine. It is possible that is the not that is not the base plan, that is the best plan. Data, webased on the should be given emergency approval. And then delivery in the u. S. Will be given for the highest risk, the elderly and health care workers. Thee the fda reviews approval for the general population. If we raise 100 billion of capital in may to invest in equipment, Training Team members, and as we speak we are making as many vaccines as we 500 with the goal of making million doses in 2021. Can we talk about how easy it is going to be to attract the necessary demographics within the test . How easy is it going to be to attract those key demographics, the most vulnerable demographics, particularly seniors . Are you struggling in that area . Are people coming forward and wanting to take part in the test . Is a bit too early to tell, but i can tell you that within last week we had people andss the u. S. Asking us to we have had people endeavors groups, africanamerican, latino, and so on, which is very important for us. We want to make sure that the study has the right coordination from the demographics in the u. S. And are among the highest risk. Alex this might be a silly question, but bear with me. Is it a t cell . How is it going to work compared to other vaccines out there . It is a vaccine that is able to activate the p cells and t cells. And thezing antibodies, t cells are used for memory. What we have shown in the human study that was published in the new england journal of medicine it has a ago is that high ability to neutralize muchodies, four times as as people who are naturally infected, and t cells, which is a very good sign. For full efficacy over vaccine. Vaccinesave seen other have a t cell response. Is this going to be one of the key differentiators as to whether or not we get an antibody and a cellular response . Is that going to be one of the areas that people are going to receive it, where they need to differentiate . Think people are actively looking to those differentiations now because we dont have more data. So everybody is trying from regulators, to look at what do we know today, from the phase one study and published data. But the real test that everybody is going to have to go through participants study, 50 plus on getting the knowing the really efficacy of the vaccine. Be the real test for everybody. Moderna chief was bancel. E stephane investors may seek out more bullish signals before pushing prices higher. We will discuss prospects for the precious metal next. This is bloomberg. Francine this is bloomberg surveillance. Lets get straight to the Bloomberg Business with leighann gerrans. Leighann the virus is eroding demand for Luxury Products in lvmh customers are curbing purchases of goods faster than the company can cut costs. Profits came in worse than expected in the first have for the three months through june. Revenue fell 38 . Analysts expect it to be the luxury industrys worst ever quarter. Pfizer and biontech say they the late stage trials of Coronavirus Vaccine candidate. Their goal is to submit it for review as soon october, putting it on track for one of the most ambitious timelines to date. Unlike moderna, pfizer has not received funding from the u. S. For research. Intel has ousted its chief engineer less than a week after falling further behind in production technology. The companys chip designer manufacturing opposition manufacturing operation, leaders say changes are to accelerate reduction and leadership. That is your Bloomberg Business flash. Francine have gold prices risen too far, too fast . The yellow metals rally is losing steam after futures touched 2000 an ounce for the first time. While there is no end in sight for economic turmoil, investors may seek out more bullish signals before pushing prices higher. So far this year, gold is up 20 , silver is up more than 30 . Joining us now is mobeen tahir from wisdom tree. Thank you for joining us. Fundamentals supporting the gold assent . Thank you for having me on. At first glance it seems counter intuitive that equities and gold have been going up since march of this year. But if you take a closer look, it makes sense. What has been happening is that equities have largely been lifted by monetary accommodation for social bache, dashed from Central Banks this but from Central Banks despite all the risk. It is not coming through in the form of a higher reading of the vix index. Instead, what we see is that a lot of support is going toward gold. Old is actually being used to hedge the risks. Equity markets and risk markets in general. What that means is that gold has become the new production in markets. What does that mean for how furthermore gold can actually rise . Stay overo over 2000, 2000 . What is the next level . Mobeen thats a great question. I mentioned risks. There are three main risks to consider in the very short term. Number one, Second Quarter data, so corporate earnings may disappoint wall street, and gdp data from the u. S. And europe, which is going to be announced for the Second Quarter in the next few days. That will present a reality check for markets. Number two, infections are still on the rise, and of course vaccine hopes may still be premature. Number three, geopolitical tensions are on the rise between the u. S. And china. So risk assets may wobble in the face of these risks in the shortterm, in the next few weeks, but monetary accommodation may still lift them up again. But gold will serve as a hedge against all of these risks as a safe haven asset, and that could create this an area of risk assets and gold pushing up from current levels. We gete what happens if inflation out there . What does that do to gold prices . Mobeen the interesting thing is , to understand what is actually driving inflation. If inflation returns because the current pandemic is overcome and the world returns to an environment where growth comes back to the economy, people start buying things again, and inflation returns now, from a safe haven perspective, gold may pull back a little bit in that scenario because maybe the risks have eased off a little bit, but from an inflation point of view, gold is a very important inlation hedge, which is why returning to gold in the face of all the monetary accommodations, because monetary accommodation typically erodes the value of currencies. If the inflation returns, people will continue to see growth. Ifne if you look at we see a correction in gold and i dont know if we do see it or a few predict we will see it what would be the catalyst . Mobeen that is a very important question. I believe the main catalyst for a major correction in gold would be a scenario where the world recovers in a v shape, which is not our base case central scenario. A vshaped recovery could come about if a vaccine has been developed. If it is not only developed but distributed widely around the world, and the Current Crisis with the infections is very broad in the control. And that sort of a scenario, we go back to a world where things are like the way they were in 2019 and risk assets suddenly really spike up, and gold probably pulls back because the safe haven demand deteriorates. So that is probably the scenario where gold will pull back, but it is relatively low probability at this current state. Being treatedold more through etfs or Something Else . Mobeen so the great thing that we see in terms of gold and not just this year in 2020, but the trend started in 2019 was that the biggest driver for gold has been sentiment. And the way to break down sentiment is to look at two things one is positioning in speculative positioning on futures exchanges, which has been going up, especially in the last few weeks. Flowing into Exchange Traded products like you mention. Both those things have really been going up this year, which is why gold has been supported. So we see strong sentiment and strong momentum find old at the moment. Momentum behind gold at the moment. Francine thank you so much, mobeen tahir, Research Director at wisdom tree. Aming up, moodys is calling plan for staff diversity positive. More about investor calls to promote equality in the workplace next. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im francine lacqua, here in london. Lets take a look at what you should be watching out for today. Fed officials will confront clear signs that the u. S. Recovery is stalling when they gather for their twoday meeting today. Economist expect they will probably hold fire on additional stim is while Congress Debates or physical aid. The chinese president xi delivers a keynote speak speech at the opening of the aaii meeting. Forecasts are for a jump in the unemployment rate, is surplus in the current external account, add new highs for the countrys public deficit. Disability inclusion issue up to be the next frontier in esg investing. Investors are pushing companies to create more welcoming places for employees, whether their disability is visible or not. Joining us to discuss the recent push is dani burger. Why are investors concentrating on it now . Danica we know that esg has been something investors have cared about for some time, but we usually hear about the environmental and governance portion of it. But social is becoming more important. Some thing like disability equality is something that is especially ignored, so investors are seeing this as an area where companies can really improve, not just because it is the right thing for companies to do, but it also increases profits, gives them a wider access to a more diverse set of talent. In 2018, a report was done that showed that companies who had more programs to help those with disabilities and have better hiring practices, saw a 20 28 increase in profit and doubled the amount of return as their peers over a fouryear period. This is especially pertinent considering people with disabilities have had a much higher unemployment rate, have been disproportionately impacted by coronavirus. This past may we saw a group of 22 investors send out a call to action for different corporations saying that they wanted to see more action done on improving equality in the workplace when it comes to disabilities, because at the end of the day, this is something good for companies to do when it comes to profit and getting more innovation and more diverse talent. Francine speaking of diversity in the workplace, the line a race action plan to promote more black employees. What has been the result of that . Dani this is another good example of seeing a good example of social action for the s portion of the esg. Raise those in leadership positions who are black to 5 . They are going to publish an ethnicity report this year. According to moodys, this is a positive step. It is something on one hand that is a good thing to do, but also helps reduce that social risk. Again, issues of Ethnic Diversity in the workplace to underrepresentation, especially in the financial sector, is something that has received scrutiny, especially with the black lives matter movement. This is something that again, investors and companies have really begun to concentrate on, francine. Francine dani burger with the latest on some of these important movements. Lets get the latest on the ongoing row over u. K. Policy. The spanish Prime Minister has responded angrily to the ratcheting up of u. K. Travel restrictions. The Foreign Office has extended its after the u. K. Mandated a 14 day quarantine for anyone returning from spain. Lets get more now from the u. K. Government reporter, who joins us on the phone. Alex, great to speak with you. There was a swift change to the rules on quarantines and confusion over the spanish islands. Informationk the what out that spain had been added to the list if you had to quarantine that you had to quarantine if you were coming back from spain. Foreign advice was that you did not have to when the discrepancy was pointed out, they change it pretty swiftly. It is an example of how confusing the situation can be for travelers want to get away on holiday but now there is so much uncertainty about if you go away and the rules change while you are away, what happens when you come back . This comes as we had a report that just three people have been fined for breaking quarantine rules. Is there concern that these rules take people by surprise, that there is not enough notice, but also they are not really enforce once people come back in the country . Certainly the small amount of fines would lead you to the conclusion that perhaps they are not being enforced very strongly. The government says it is counting it is carrying out the necessary checks. In,le on the border coming many have refused giving Contact Details of where they would be. As think a person has been fined for breaking the quarantine rules when they have not been where they are supposed to become in selfisolation. Francine there is speculation france and germany may also be added to the u. K. s list of countries having to quarantine when you come back from them. Is just that, it is speculation. People saw that what happened in spain, there was an up tick in coronavirus cases, that is what led to spain being put back on the list. Germany andi think it france, there has been an uptick, not to the extent of france. And but they could be added to the list. Government is still getting hard questions on how they handle the pandemic at the start. Is that changing the line of thought for the future . Say whetherhard to it is changing the line for the future, but certainly every time a minister goes before the press, people are asking them would you have done this differently, would you have done that differently. Boris johnson is now acknowledging publicly that there will inevitably be an inquiry into the handling of the situation, but the government efforts at the moment are saying we do not want the inquiry now, we want to focus on getting the economy back running and keeping the virus suppressed in the u. K. Francine thank you so much, alex morales, u. K. Government reporter talking us through the thinking of the u. K. Government. The markets are on the move. The markets are focusing a bit on the positive, actually, that they are seeing out there, lets get a quick architect if we can. Stocks are gaining, the gold rally is cooling after touching 2000 yesterday. Bloomberg surveillance continues in the next hour. Tom keene joins me out of new york. Would be looking ahead to with charles plosser, the former fillet for fed president. This is bloomberg. Francine stimulus, take 2. Republicans unveil a trilliondollar aid package to bolster the u. S. Economy. Democrats give the harshest estimate of the plan, with nancy pelosi calling it pathetic. The ecbs request the central bank asks european lenders to hold off on dividends and buybacks until next year to conserve fiscal strength. And Precious Metals shine at the cost of the dollar. Gold futures touch 2000 for the first time ever. The feds twoday meeting could be a catalyst for further gains. Good morning, everyone, and good afternoon if youre watching from asia. This is bloomberg surveillance. Francine lacqua in london, tom keene in new york. The rally is fitting somewhat. Stocks are up, but we look at the stimulus in the u. S. And the fed meeting to give us an indication of what the economy will or wont do. Tom the stimulus is front and center, and you go to the articles and latenight, the real effort, francine, for people here to talk i was really impressed that the white house members went up to the hill on the