Permeate. It has largely been driven by the concern that we dont have a handle on the virus and we dont have a handle on a solution for this difficult situation we are now seeing involving washington. It doesnt seem to be at the moment a landing zone for the democrats and the republicans. They are significantly far apart. The fact that you heard such partisan briefing suggests we are no closer. Thender at some point markets will have to shift from focusing on the dollar to shifting to other Asset Classes as well. That has been something we have been watching very carefully over the last few days. We have been watching carefully what has been happening in europe. Offpean equities are sold because of the resurgence in the virus count. That doesnt make sense if you believe that we are going to see a story developing in the United States. We will try to get an assessment of what is happening with the economy throughout the program as we continue to watch what happens in the United States. Of the speak to the cfo utility giant. Now, around 9 billion in assets. We will try to get her take on what is happening with the euro economy, the French Economy. This points to the eurozone economy plunging into an unprecedented slump in the second quarter. Particularly out of spain today was really grim. Spain hit the hardest. The french numbers were also tough. Joining us now are the chief economists. Im trying to understand what is happening here in europe. The data in terms of what is happening right now. Im kind of comparing and contrasting that with the gdp numbers. What are you seeing in european numbers, what of the realtime numbers telling you about where they work . The data today was undeniably disappointing. , some economists reassured that the realtime databe using data, Energy Production coming in line with the gdp data. That is quite important in terms of understanding where we are right now. In quarter to where all that Economic Activity was down around 30 , weve retraced about half of that. Sitre about 15 down as we here today, which suggests the quarter three numbers will come in with a partial bounceback. I wonder as you look at the partial lockdown again, the u. K. Saying do we quarantine now . Ins that quarter three quarter four revision get revised down even lower . Ona lot of that will depend whether the european strategy, which replicates some of what we saw on the United States of localized lockdowns will hold. One of the problems facing policymakers, the National Governments not just in the u. K. But across europe is a lot of the schemes they introduce incomes and businesses have been across the country. If you localized lockdowns you have a target with the federal government largely being the lever. You see a quarter three or quarter four could parttime indicators or whether we get more economic damages started. Guy Boris Johnson addressed this issue earlier on, lets take a listen. Pm johnson i will not stand by and allow this virus to cause more pain and more heartache in our country. We should squeeze that brake pedal in order to keep the virus under control. Boris johnson speaking a little earlier on. They were done very quickly overnight. And extending the quarantine rules here as well showing symptoms of covid. We will be dealing with influenza, youll be dealing with covid19. It will be very clear that it will take a much more speedy approach to locking. A full economic lockdown if the situation gets bad enough. Economic idea,r if you have to plug those kinds of developments in, what are you expecting to get spat out . Is numberslem here have the foresight, we do know from an Economic Modeling standpoint consumer Business Confidence is already taking a material hit from a rapid responses to localized flareups. We have seen quarantine rules introduced. Just a few hours notice. That has a Chilling Effect feeding into my second half economic model. That has been rebounding relatively well. It starts to turn out in quite significant collections again back in quarter four. The convergence of what is typically High Pressure areas in the Northern Hemisphere coalescing with covid19. You are potentially talking w shape depending on the economic profile. Guy it is going to be another interesting period as we see it rolling off as well. What we have coming up for you later in the hour . We will be speaking to steve randall, the ceo of the Parent Company of vans, north base, timberland. Very much exposed. Talking about a chilling of consumer sentiment. This is bloomberg. York, thisfrom new is the european close on bloomberg markets. Big tech last night, energy coming out this morning. Helping us break it down is abigail doolittle. Abigail we are looking at a bit of a tale of two stories between earnings winners. It is shipping up the way most thought it would. We have energy and some of the other consumer names that are actually losing. After those winners lets start off with amazon and apple. They put up huge quarters and are being rewarded with the stoxx up in both cases getting Sales Estimates by about 10 each. Adjusted earnings beat by true double digits. Here is the fact that apple actually met it pretty pandemic estimate. This is confirming those big tech names are thriving through the pandemic. Chevron on the other hand reporting the worst loss in three decades. Two times worse than what they were looking for. Also sharplyis lower. They beat Sales Estimates but were down 31 yearoveryear. They also warned that the second half will be down. Surprises, sector tech and Consumer Discretionary beating by the most. On bottom we are looking at energy missing by 15 . Utilities by 8 . To some degree. The s p 500 is now slightly lower. Alphabet missing revenues surprisingly. Chevron also there. This is pretty interesting. Suggesting that they be not everybody believes it is going to be smooth sailing ahead as bond yields have gone lower. Alyx joining us is bloombergs cameron crise. I dont understand the euro dollar sitting at 1. 17, 1. 18 with record yield lows in the front end of the curve, help me . Cameron i think it is all pretty much consistent. In theentral bank worlds printing money like crazy. None so much as the fed. They basically told you they are out of clay in terms of any potential prospect of tightening. That is for years to come. The dollar is reflecting that. Everything you see in the spring kind of makes sense if you view it as a dollar depreciation. Terms of financial assets, hard assets like precious metals. Indeed in terms of currencies. Ofrencies are the only sort other asset that could also depreciate or could also debase itself by money printing. Which is why they moved the least against the dollar as opposed to say gold or the stock market. What is the reaction of we dont get a stimulus package out of washing asap . That would mean the fed would have to be more warming through how assets respond . Cameron i tend to think you would see risky assets take a little bit of a tumble. I wrote a piece earlier today that looked at equity Market Performance across a range of geographies. What is the relationship between that . The amount of fiscal stimulus he had we had thus far. The match is almost perfect. Isaac everyone sort of expect there will be some rollover. If this is putback and we start to see next week that those filing for Unemployment Insurance basically get 600 less than they did last week, that could start to have a meaningful impact. The rally we have seen in fixed income in the treasury market this week is to some extent reflecting those fares. Thanks very much indeed, have a great weekend. What a month it has been. We will talk about what is happening in the French Economy. Around 9. 5 may drop billion dollars in assets. This contends with the hit from the pandemic. Also transition to a new economy. Will speak with us. We will get a macro take, this is bloomberg. Lets talk about the french bylity company stock, up around 4 . Today the Company Revealed results that were pretty solid and announced it is going to upload a bunch of noncore assets. Joining us now is judith hartmann, the cfo. Thank you for your time. I want to start macro and then we will get a little more macular. The French Economy paints a grim picture. See a lot of the demand story as a result of what you do in providing power . What kind of numbers are you seeing relative to where you are right now . Judith hi guys, great to be on the show today. Most of our large countries have , obviously inwn april and may. That was the case for france. We are seeing a rebound on energy consumption. Confident onuite the second half. Wonder if you notice that it bifurcated at all. Do you have any window into that . Hand then the other hopefully not repeating the course of april and may. We have seen the lockdown. For assets, not just the energy , it looked like you didnt have access to a customer site. The business in the first half. Collectively, all of us are no better prepared. Masks in thellion new guidelines were put in place with distancing. Ifwill be better prepared there is a new wave. Guy what are you anticipating as we head into it . You talk about being better prepared. Do you think the more positive trend is sustainable as we head towards christmas . We had three big impacts in the first half. One was covid related. All of the countries were in lockdown. It was the hottest winter since 1900. That hopefully all three of those will be better in the second half. That should be good news. You mentioned our share price up 12 at the moment. Guidelines to. Eaffirm our dividends we talked about our strategic acceleration that will bring a lot of clarity for the market. On the call you talked about selling 8 billion euros of assets. Obviously energy will take of moving into alternative energy. Could you tell me what kind of assets you will sell and how quickly you will sell them . One of the biggest opportunities are the relaunch programs. Many of the government are looking to use this money to make their countries more digital and have a green recovery. All of which were incredibly efficient to tap into. It will be a big advantage for us. Have a higherto priority going into renewables. Also into our infrastructure. Assetsll mean certain with the strategic of you with our Client Solutions with a view these areall of linked. On whatthe decision might leave the company. How far along are those conversations . Are you launching it today . Judith we are launching the conversation today. We have a promise to the market to come back in the first half list21 with a more precise of investments. The timing of these assets. Given that, we will have to get a Real Organization that could only do this once it is out in the open. Certain things are more advanced than others. The expectation is the first half of 2021. You guys are partly financing adored stream pipeline to move natural gas from russia to germany. What happens if they sanction the project, what do you do . Judith we are hopeful this is not going to happen. This is a strategic deal for the energy of europe. It needs to be treated that way. We hope the project will not be hit by any sanction. Guy just to wrap things up, in terms of your expectation for the european economy for the way that you will be positioning get the vibeyou that europe is significantly ahead in terms of its recovery in other parts of the world . A lot of investors around the world are suggesting europe has a better handle on this crisis than the United States. Your customers, is that something you get . Do you get that sense that europe is coming out of this . We are seeing reassuring signs of our customers. A lot of our activity is back to people having said that we all know the virus is still there. We need to be prepared collectively for different pockets of confinement in the various countries. I dont think theres any way around that. In toxic where is going to be and when it is going to be. We are much better prepared going into this. We want to be ready in case i believeve hits collectively we are better prepared to go in. Guy we will have to leave you there. Thank you so much. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Guy it is friday, it is the end of the month. These are the final numbers. Lets take a your could the european lets take a look at the european close. Not exactly the positive story we saw in the United States over last month in europe. Today we are down. 5 . We faded into the close. This as we see the news out of the United States suggesting the republicans and democrats are still far, far apart. Interesting to hear nancy pelosi talking about the possibility of a deal. In terms of what the month has delivered, lets take a look at what the stoxx 600 has has not delivered what we have seen in the United States. In europe we have been much more negative in terms of the way weve been trading. Down. 8 percent. Lets call it a sideways month for european equities markets. We have seen big underperformance over last couple of days in the dax. Today that has been reversed. The ftse 100 down 1 . The cac 40 down. 9 . The dax only down. 2 . A more positive story emerging from some of the industrials in particular. When we look at what is happening when it comes to the sector breakdown, which sectors have been driving us, today it is the real estate story. On both sides of the atlantic it is quite positive. This is the one day sector breakdown. Technology doing very well in the United States. Baraw big solid numbers alphabet last night. Financial services, utilities trading strongly. We were talking to the cfo. The autos still trading lower. The travel and leisure sector remains under pressure. Fresh news out of the u. K. Adding to the angst. We have iag and its rights issue plus numbers out of klm in terms of what theyre are doing with staffing. A tricky story continues. Lets look at some of the individual names we are watching. Weve been keeping a careful eye on iag and all of the Airline Sectors over the last few days. Today it is down 7. 26 . When you are launching a massive rights issue you will see a mechanic issue. Not yet. Trading strongly today, driving the tech sector. The 5g story it seemed for a while erickson had the power behind it, but nokia coming back nicely. Lower despitek the fact it came through even the best expectations. It is the lack of guidance that has concerned the market. The stock trades down 8. 5 . I also mentioned what is happening with the banking sector. A blowout performance in fixed income trade that beat everybody, even on wall street. This allows the french bank to move past embarrassing losses. The cfo was asked if the bank would be able to maintain guidance in the event of a surging coronavirus case in france . We anticipate there will not if youd nationwide look at the results of this quarter and the first six months, it is in line for us to confirm your fixed income activity was boosted by the exceptional relativity in the market. Up 150 poor percent up 154 . Are you worried the market volatility will be less in the coming months . If you look at the high because institutionals but also corporate sovereigns were active. The volumes were probably above what you would have in the normal rate, they would probably taper. However, as we are able to serve customers because of our strong financials, of all the services we have, we have been taking market share in those activities, and that is the market share, being there for clients, something we anticipate having in the second half. French Retail Revenues are down 11. 8 . Do you also anticipate a recovery there . Lars the impact had an impact in april and may. If we look at the activities, the number of activities, the credit Card Transactions or the demands for loans and taper it up again to levels which are to the precovid, that would mean the run rate would be tapering up. This will take time. An overall level, back to the in 2022. Cbo that was the paribas speaking to bloomberg earlier today. s arms Parent Company and owns 25 of it. They are weighing whether or not to sell part of the state or all of it. Alex webb, Bloomberg Opinion columnist, joins us now. With this willie happened with this really happened . . Id softbank own nvidia why would they want to get back in . Alex softbank does not own all of arm, it is the vision fund which owns 25 of that stake. All of it is controlled by softbank entities. Softbank faces pressure from investors, not the least of which is elliott. Some investments are less than the enterprise value. That is something they are trying to correct. Arm is something they acquired four years ago with the intention of holding onto it for a decade or more. On its books it is still valued at the 32 billion it paid. Carrying out a transaction like this, particularly with stock as well as cash brings better visibility into the value of the investment and will help rerate the shares. If i am amd, if i am samsung, if im qualcomm, if i am broadcom, the list goes on and on, why would this be acceptable . Alex that is the big challenge. Amount it will be a huge of regulatory pushback. Arm is designing chip where the likes of the companies you mentioned adapt to their own needs. When we talk about apple a 12 and a 13 chips, those are armbased chips. Some of the Companies Compete with nvidia and other parts come in gpu, the Graphics Processing Unit that is nvidias speciality. There is concerned nvidia would have control over key intellectual property that its competitors have to use. That is something that will require a huge amount of regulatory heavy thinking. Even from that antitrust perspective, but with the u. S. Even allow Something Like this on a coat merger cross specific way . Nvidia is an american company. Japaneseobviously a one. It depends what state in nvidia they end up getting. I think they would not end up with control of nvidia. It is a 270 billion stock arm valued around 40 billion. More than 32 billion they got four years ago. Nowhere near the scale nvidia has managed to gain in that time. Concerns about control i do not think will be there, but the market concentration is a bigger worry. Guy is there a better solution. If softbank wants to offload arm and crystallize the gains, is there a better way of doing it . Alex the thing i flagged in the column is something called cadence. They are similar to arm in the sense they designed unit components used to make chips, but they do not make the chips themselves. Others take their ip and run with it. Similar size to arm. A reverse merger into it leads to arm being a publicly traded similarlyto these sized companies merging. More interesting is there ceo recently joined the softbank board as a nonexecutive director. There is an existing relationship there. Our colleagues at Bloomberg News reporting talks with nvidia are progressing. They are taking this very seriously. It is the regulatory overhang that is the concern. Guy absolutely. Interesting column. Thank you ray much indeed. Alex webb, Bloomberg Opinion. Lets get an update on the blooming first word news. Ritika the senate has left washington for the weekend with no deal insight on a new stimulus package. The supplemental 600 a week Unemployment Insurance payments end today. Republicans want a temporary extension of those jobless benefits, but democrats say those payments should be part of a much bigger bill. The white house said it made four offers, to which democrats have not made any counter offers. President trump is coming under pressure for Setting National strategy for the coronavirus. The white house has avoided strict rules and that has left many of the decisions to industry or state leaders. Experts say that has made shortages of protective gear at hospitals worse and could complicate the distribution of vaccines. Boris johnson is delaying some measures aimed at easing the coronavirus lockdown because the number of new cases is rising for the First Time Since may. The British Government has scrapped plans to allow places like casinos, skating rink, and bowling alleys to reopen. The new measures will be reviewed after two weeks. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Am ritika gupta this is bloomberg. Guy . Guy thank you very much. European stocks finishing near session lows. We saw a fate toward the end of the session, within the last hour. These are what the final numbers look like. Dax theap 40, and ftse, dax, and cac 40 all lower. Biggestprobably had the fate over last few minutes. Well be carrying on that conversation with Boris Johnson imposing stricter conditions on the u. K. Lockdown earlier on today. We have seen around 5 Million People in the northeast of england having much more draconian warranty restrictions placed on them earlier on in the u. K. We will talk more about that on the cable at the top of the hour. Jon ferro in new york, i will be joining him in london. This is bloomberg. Alix live from new york, im alix steel with guy johnson in london. This is the european close on bloomberg markets. 30 Million People are about to lose the 600 weekly unemployment benefits. That Program Expires today as congress has failed to pass legislation to extended. How does that translate into the retail sector. We will dive at insights with steve rendle out, Vf Corporation cfo. Lets start macro and that we can dive into different areas of your business. How does all of those people losing that money impact your sales . Steve we have not seen it yet. I would tell you where we are today. What weve have been navigating since this began in january and february in asia is paying close attention to our consumer. We have changed our approach and become much more empathetic and to and in how we speak invite our consumers to be part of our brand story and bring more creative fun environments for people to participate in as we all live, work, and operate in a different environment. I think where we find ourselves is very wellpositioned to engage consumers with where they are, which is on the digital platforms we offer, and inviting them to be part of our community, and when they want to transact, being ready for them but not making that the primary point of what we are trying to do with them. Guy what is happening in bricks and mortar . Steve bricks and mortar has been the issue from the beginning. We went into full lockdown in the middle to end of march. As stores started to come back online in may, both our own as well as our key wholesale partners, we saw consumers willing to come to our stores, engage with our employees, engage with our partnerss employees. Those coming to brickandmortar are coming highly motivated. Traffic is not at the levels we would historically expect, but convergence is much higher. Consumers are highly motivated and engaged. What is fortunate for us is the Consumer Trends we see. The high level of interest in the outdoors and exploring outside. Norm, andion is the our portfolio is well suited to serve consumers. Alix casualization. Not sure i have heard that word before. You are paying Retail Associates in the u. S. , canada, and mexico. He and benefits through may 30. Im interested where that stands now. Steve from the beginning, the started for us in asia in january or february. We took a people first approach as to how we wanted to engage with our employees across the globe and as the virus begin to spread across europe and into the United States we kept that commitment and we have not furloughed any of our people. We continue to have our people on our payrolls, because in the retail,it our teams in our teams with our supply chain and distribution center, they are critical to how we serve our consumers and we need them to be with us over the long term. Place,cision is still in and one we are proud of and getting a lot of credit for from our employees. You talk about asia and you talk about the fact that is where it started. What is the picture u. S. Versus international, what are you seeing in asia, what are you seeing in europe . Steve we just reported earnings today and our results were slightly better than expected. That is due to our international and digital businesses. Our digital was up 81 . What was exciting and is satisfying for us is our China Business has returned to growth. It has returned to growth about one month before we expected it to be true. Andee the Chinese Consumer the asia consumer more apt to engage. The pandemic is further down the path. We are wellpositioned to be there, to be with our consumers, and offer them the experiences as well as the products they are looking for. Alix that is interesting. I wonder how you are seeing Consumer Preferences across categories, channels, loyalty, are they changing after reopening . Steve the trends i mentioned earlier are important for us as Business Leaders to Pay Attention to. This notion of a greater interest in the outdoors, and being outside. More interest around health and wellbeing and what that means for your activities. The notion of being more casual and how we dress. We are all working from home and do not need to wear our suits and tie like we have in the past. There is also a deeper understanding and interest in sustainability, and that positions us well in our quest to combat Climate Change as a elective portfolio brand. Those Consumer Trends align with our portfolio and the products we offer, but more importantly the experiences we offer. It is not just about trying to convert a consumer to a sale. It is about trying to take you from awareness and consideration to the other side of the equation of loyalty and advocacy and building a Strong Community of consumers, that as we emerge on the other site will be a much stronger position to engage and transact. Tie on. Ill have my am slightly overdressed. Alix do you have shorts on . Guy i will have to go on casualization. Lets talk about what is happening in terms of inventory management. Some companies are executing strongly. They are using rfid and all kinds of technology to track exactly where their stuff is and how they manage it more effectively, it is showing up in their numbers. What are you doing to improve inventory management, what does inventory look like right now . Steve in the near term, we spoke today on our Earnings Call that our inventories were up 2 good one of the things we went quickly to do when the pandemic became very clear with its evaluates to move to forward inventory needs, working with our suppliers, working with our Retail Partners and rightsizing our inventory and adjusting that flow over a period of time and doing that to put ourselves in a stronger position. You think future and where youre are going around using technology to understand our inventory. That is a serious component of our transformation agenda and how we think about bringing digital capability across the entire value chain from how we create products to how we manufacture products to how we manage them through our Distribution Centers and into our own wholesale stores. A thing of the future. We have a number of pilots underway to understand how we would use that to better manage out typenever mentalities for our retail stores. The digitization of our value chain is a critical part of our longterm transformation. I am as we round out, curious as you put more money into that, you are still backing up your workers and you start to sell a product. What your margins look like . How much visibility do you have in your margin story in the next six months . Today andcame out talked about our Gross Margins. We have seen a mixed benefit of our shift to more digital, so there is a positive element, but we have also seen takes from how inventory is moved in a sale mode to critically right size. Where we see inventories and the impact on Gross Margins in the future is as we get through the level setting of our inventories and we shift to a more direct ,igital business platform margins improving over time. We have committed in our longterm journey to get to the mid to high teens operating margins and over time, that algorithm is still possible. Managing the nearterm as we look at this shift into more direct will be positive for our Gross Margins. Thanks for your time. Really appreciate it. Corporation, v. F. Cfo. Lets turn to asia. Hong kong and its decision to delay septembers election for one year due to the coronavirus. That fuels outrage. Joining us with more on this from hong kong is Bloomberg Stephen engle, bloombergs chief north asia correspondent. Been a chille has in hong kong and the onemonth since the National Security law from beijing was imposed and that squashed the appetite for protests. There has been real optimism among the prodemocracy camp that those september 6 Legislative Council elections, there would be wind in the sales of the people who were dissatisfied with this imposition of that National Security law, that that would propel the prodemocracy camp to victory. The chief executive has postponed that election for a year, citing the fact that you citing the third wave of coronavirus. There was a Record Number of new cases yesterday. Another 121 cases. She says it is not safe to hold such a big election. The prodemocracy camp says we especially when it comes within 24 hours of 12 prodemocracy candidates being disqualified and four activists arrested under the National Security law for allegedly promoting selfdetermination. What we have seen this week is redlines being put out by the government in hong kong saying how much dissent they will be tolerating. You can catch more of this on hong kong on encz two, our hourlong documentary out today that will air this weekend. Alix thanks a lot. A one hour special, hong kong on edge 2 coming up at 10 00 tonight new york time and throughout the weekend. That wraps it up for me and guy in the u. S. And london. Happy friday. Coming up, leon panetta will be joining balance of power. It is the last day of july. Things are getting crunchy in the markets. Usually august you have liquidity and more volatility. Cap maintaining its lead but the s p into red following european stocks lower. Gold still catching a nice bid. 1972. This is bloomberg. Kevin from washington to our tv and radio audiences worldwide, im kevin cirilli. Taylor and from new york, i am taylor riggs. The world of business is high and mighty today. Joining us on the market is abigail doolittle. Walk us through what is going on in the markets. Last night after the bell we got the big tech earnings and the gains today. Abigail they do continue but it is interesting because at this point we are looking at mixed markets. Apple, amazon, facebook putting up huge quarters. Stocks surging. That is still the case for the stocks. The nasdaq 100 is up sharply, being helped out by the waiting, roughly 30 waiting to those three stocks. We have the s p 500 and the dow down, the s p 500 slightly, the dow more so. Where we have real weakness is the russell 2000. This as the haven yen is up 1 , the best day in two months