Nasdaq hits an alltime high as a combined value tops the gdp of the worlds thirdbiggest annomy, cash trade is just hour away. Here are your top headlines from the bloomberg terminal. Trump says tiktok must close its u. S. Operations by sold. Ber 15 unless it is he insist any sale must include a substantial payment to the u. S. Government. Global equities trade makes after a tech surge sent the nasdaq to a record. Isn amid a positive u. S. Pronounce and hinge from trump as he could face executive action on fresh virus release. Results easing continues infineon. The buyer warrants that the pandemic has stunted demand for nonessential medicines. We wait on numbers and it looks like we are getting numbers from British Petroleum right now. Annmarie, what do you see . Annmarie the dividend to the oil make it maker is cut. This is the First Time Since the bp oil spill in 2010. A historic moment in some senses for the oil giant. , 5. 25. Quarter dividend 10. 5. Second quarter came in at 6. 6 1 billion. The estimate was for a bigger loss. A little bit better than expected. Also, their debt to gearing, which is very important for the oil company, is at 33. 1 percent versus 36. 2 . They want to get that gearing down in debt ratio. They follow shell in cutting its dividend, exceptional did that less last quarter. Bp is doing it now. Ts a big hit longtime shareholders of Energy Stocks in london, and they traditionally rely on the cash from these companies. Matt absolutely. Coming out with earnings. Another company that bloomberg expects to cut its dividends. We are looking right now at earnings for the full year, organic Net Sales Growth is down 8 compared to the estimate of 6. 43 . Diageos organic net skills growth is a little bit worse than survey our survey of analysts anticipated. It is not able to provide specific Financial Guidance. Right now it is not giving Financial Guidance for the year ahead. We will talk to the ceo in this program. MissingNet Sales Growth a bit. Net sales was, in total, 11. 7 5 billion pounds in this fiscal year. That compares to an estimate of 11. 8 3 billion pounds. 11 and threequarter billion pounds is what they made in sales. And on that in adjusted operating profit, 3. 49 billion pounds. Still pretty decent margins there. What he thinks margins and sales are going to look like this year, even if he does not want to give a specific Financial Guidance. See a they have a feel for the come back in 2021. We are just under one hour away from the start of cash trading in europe. Lets look at futures. In terms of what we see in europe, a little bit of a mixed picture. You have ftse future down slightly, while futures on the dax trade higher, as well as oxx. Stocks euro stp u. S. Futures have a mixed picture. Nasdaq features futures continued to trade higher, only for 100th of 1 . Dow futures are not doing much better, but nonetheless, green arrows. I think its fair to say, little change and still searching for some direction there. We are seeing things a bit more stable. Bloomberg dollar index is relatively flat. Holding on to some of the gains that is rebounding for the worst month in a decade. You have to think is the meltdown coming to an end, and could they be flashing caution . U. S. 10 year yield is. 55 . Gold is unchanged. After yesterday it hit a record. Brent crude is under a little pressure. 43. 74. Opec starts to open up attacked a bit more great asian stocks advanced. European equity futures pointing in the green. A mixed future. A hugemes after it technology fueled rally in the United States amid positive Economic Data and the potential for further stimulus. We do have tensions brewing between the u. S. And china. Those continue to simmer as President Donald Trump says to talk will close its business by september 15 unless there is a deal to sell the social media. Etworks american operations microsoft is in talks to salvage the deal for the u. S. Lets get more of everything thats going on in the world with our bloomberg mliv managing editor in singapore. Thank you for joining us. You have a piece out about how yesterdays rise in u. S. Stocks is a had saved. You said its not about seasonality. Where do you see the Downside Risks . We talked about this on the show on friday. I think all the major drivers we are seeing for u. S. Equities, whether its fiscal stimulus or the virus narrative, whether the economy or the earnings season, everything is going from being positive for equities, to suddenly being priced and all the positive stuff behind us. We know we have more negatives coming in. The narrative is turning more negative as its priced most optimistically. I think all of this overall will be a much tougher month. The largest drawdown we saw for the s p 500 was in this threepointer percent. Volatility has disappeared. I think it will definitely come back this month. Just want to point out it is said mliv blog that the next 10 move for the nasdaq will be up rather than down. She says earnings momentum will and the nasdaq higher basically points out that has not done nearly as well as gold. It has an even done as well as the long treasuries etf. There is a lot out there that has done better than the nasdaq. Its tilde most reasonably valued. Its still the most reasonably valued. Mark she poses a good argument. Accurate inthe most terms of she was very early with the dip in march. She said the rebound would happy happen very quickly. She was bullish from late mark late march, onwards. I think we are now due for a correction. Necessarily have a widely diverging view, i just think there is a correction. I just think we are due for that. Probably the next 10 , even the nasdaq. She makes a point that tech stocks are still probably the best place to be in equity markets, and i would not disagree. I think the comparison is of golden treasuries. They have underperformed because the Global Economy is dipping. Its one of the worst. Haven assets, like treasury and gold are doing well. There are a lot of risks, which further support the gold trade. He thinks there will be a decline on the nasdaq 10 to the downside, not to the upside. That we are still dealing with the coronavirus outbreak grade we have seen that help these technology stocks. Until that is under control, doesnt that just mean more fuel to the fire for the tech sector . Mark i think there is an argument that tech could underperform. But we have been an environment where tech was getting a massive boost into an environment where all stocks were marked down priced cheaply. Tech should not be suffering so much. Therefore, tech started surging. Though we have moved on five months since those march lows. What has happened is the stock market overall is very expensive. Stocksse are not cheap in this environment, they are expensive stocks that can no longerut they are a solid appeal. There is no longer value there. You for joining us. Our bloomberg mliv managing editor. That is the mliv question of the day, isnt it 10 is the next be highernt going to or lower . Reach out on your bloomberg. Thats quickly recap what we saw at the top of the hour. That was bp and diageo. Bp cut their dividend, First Time Since the oil spill in 2010. Now bp is doing this and its widely expected. They say oil trading delivered an exceptionally strong result. Isding debts in the oil basically what is saving them this quarter. We saw with the show and the Second Quarter adjusted loss is now about 6. 5 billion. The estimated losses for more than 8 billion. That trading clearly helping out bp. What are you seen across diageo . If trading oil was a little bit easier over the last quarter than it has previously been . That madereat story 500 million in one day trading oil. Quickly, bpint out cut its dividends. Forecast actually had that we had estimates that come out and bloomberg did say it expected bp to cut its dividend. It also expected the yasiel to cut its diageo to cut its 42. 47 to 30. 85 pence. It was wrong about that. It looks like diageo is less in dividends, the final dividend is at 42. 47 pence. This has been one of the big arguments for diageo for shareholders to own the shares, that has an decent returns compared to others in the alcoholic beverage industry, like for example has a better return than they do in the shares. They have done much better than they have over the past two years. Diageo has come out with sales growths that are lower than were anticipated. Organic Net Sales Growth for the full year was a drop of a. 4 . I think a lot of investors are looking for diageo to have a sweet bounce back in 2021 in the next fiscal year. And to maintain the pretty sweet margin that it has. You make more on don julio than you do on a can of budweiser, regardless of which you personally think tastes better. With ivan interview at 7 30 u. K. Time. E is the ceo of diageo we will put a lot of these questions to him. I am looking forward to that. Annmarie good morning, welcome to the Bloomberg Markets european open. Are 45 minutes away from the cash equity open. Futures to the upside. We can sustain the momentum in europe. Mark says yesterdays move for stocks was a head shake. Lets get bloombergs first word news with laura wright. Laura Federal Reserve officials are warning another round of Fiscal Relief will be critical for the u. S. Economy. This comes as lawmakers continue to be deadlock over a new aid package. President donald trump is considering executive actions. He wants to impose a moratorium on evictions. The bank of england may be undermining u. K. s push for a recovery. Its report says the central bank is subsidizing and polluting industry for the pandemic program. Its as large amounts of money have been pumped into the sectors despite being part of the u. K. Economy. The former king is planning to leave the country from us for decade. The nation after the death of franco. The for recent years he faced a series of scandals. When or where his exile would take him. For hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you. Laura wright in london with the latest. Sian stocks rallied they are on track for their biggest gain in two weeks following a tech fueled rally in the u. S. That comes as u. S. Manufacturing expanded in july at the fastest pace since march of 2019. As well is positive data, california and arizona reported new coronavirus cases. We are joined by the global head of Investment Strategy at russell investments. It seems like there is so much there are so many variables right now in the u. S. So many questions that have not been answered. There is a new fiscal package that has not been passed. An issue of virus cases that look like theyre getting worse, getting better, getting worse, its not really clear, then there is the issue of the jobless figures that continue to be alarming and depressing. Why do you think we see the nasdaq hitting again, post earnings new high . there is a lot of cross currency and markets right now. Whats happening is there are a couple of things i have been going on in the background of markets. Regardless of what you think about the current economy and takings, the market is these things as being temporary and that they will pass. Maybe a few months. The other thing that is happening is the discount rate. You have lower discount rates with temporary earnings which means that is pushing markets up. Then when you take to the Tech Companies and they have very longlived revenues, what we call Growth Companies and longduration stocks, then they get a bigger benefit. Annmarie good morning. When you put all the Tech Companies together, the market cap is astonishing. Big asally could be as the worlds biggest economy coming after china and america. If you strip out technology, what is going to help drive this market . What looks good . Derek andrew it really is the tech giants. The big. S. Market its six versus the other 494. I think looking forward you have to step back and think about where are we in this market right now. Risk asset positive because we have lots of potential for low inflationary and low Interest Rate quotes. What i think we are going to see over the next 12 months, potentially, is a rotation. A rotation away from big tech formore value types companies and markets, which means a rotation away from u. S. Leadership towards, maybe for the first time in a decade, nonus markets will be the best performers. Global head of Investment Strategy at russell investment, stay with us. More from him is coming up. From the dollar gold market to the value versus growth abates, we will speak more with andrew about why could be a turning point for the past decade. Stay with us, this is bloomberg. Matt welcome back to Bloomberg Markets european open. We are about 38 minutes away from the start of live equity trading. We are seeing futures mixed, but moving higher on the continent as futures trade up almost half of percent. 5 . Andrew pease is the global head of investment. He said three of the big Market Trends that have driven gains over the last three decades could be about to rivers. Andrew, here we have growth versus value. And stock outperformance the dollar bull markets. We have seen a little bit of dollar bearishness lately. We have heard indications that investors like european stocks have reason to like european stocks better than u. S. Stocks. What about growth versus value . Is it finally time . Andrew they are all related. The question is value for the rest of the world and the market. If i think about the u. S. Market, the u. S. Market would bet on health and take care. ,ou are buying financials industrials, materials, you are buying cheap cyclical stocks. The two trades are very related. Come into the recovery and as earnings turnaround and is cost starts recovering, europe being a much more cyclical market link to the chinese process, its got a much bigger export sector. I think we start to see those rotations were value stock start to outperform tech stocks. Annmarie on top of this commie over u. S. Equities equities. Where exactly do you see value this, you like nine equities over u. S. Equities. Where do you see value . Andrew i think european stocks are fairly valued. We take that out and they will have value in china. Worlde market in the right now is u. K. Equities. The ftse 100 is the cheapest of the major industries. Lots of uncertainty over the past fears. Lots of uncertainty still going forward. If you are liking a longterm bet over the nets the next five to seven years i think the u. S. Market is the most attractive right now. Matt what do you think about em . A lot of people are saying that debteripheral european still looks decent and an em must still a decent as well. It rallied as much as it has. It is particularly on the back of the recovery plans. There is still some value in europe. There is not a lot of value anywhere in the debt markets right now. But maybe a indie will do better. Amd comes to do better. If we really think the end of the dollar bull market, if we will have a trend weakness in the dollar, i think its a reasonable expectation. It historically benefits emerging markets and will benefit emerging markets debt. Annmarie they made be having caution. Andrew pease, thank you for joining us this morning. Ep cuts it dividend for the first time in a decade. We bring you the details. Follow along with our energy team here at bloomberg. Stay with us. This is bloomberg. Annmarie welcome back to the open, we are 30 minutes from the start of cash equity trading. The cap iran and the dax are on the cac and the dax are on the front. Positive pmi data. But the employment component in fridays jobals number out of the United States. Bp cut its dividend for the First Time Since the bp deep horizon disaster. There was looming job losses and high debt. Editor for executive energy is here. Thank you for joining us. The dividend cut was very much expected, but they are tying it to climate change, tying it to the virus. Made, this wass a long time coming, wasnt it . Will it is quite a uturn, annmarie, at least since the end of last year for the First QuarterFirst Quarter of 2019. They raised the dividend and that is just months away. Thehows how quickly pandemic has upended everything and force them to rivers, and how weekly it has shifted ambitions to the company. He is really giving himself financial headroom to transform the company for the energy transition. Matt the headline in the tliv blog is more by back. Because they raised the dividend previously, not really a bad yield, still 4. 4 . That compares with 4. 3 of this. sam just reading over javier shoulder like everybody else this morning. Its not so bad in comparison, is it . Reflects i think it the dividend that was posted by the market. , thateally interesting comparison of dividend between oil majors and utilities. Previously people would have expected higher dividends. It reflects more volatility, more risks in the oil cycle, and better returns historically with the oil returns adjusted. We see this between the utilities and the oil majors. A prepares themselves for a low carbon agent and the Power Generation and power trading, traditionally business is dominated by this. Annmarie how do they get their gearing down . It came down a little bit less than with estimates. It still well above their comfort range of 20 30 . Will this way on them . Will yes, but the dividend cut will give them a lot of room to do that outline, the fact that given theincreased debt target in their new strategy. I also think that the company is set. We see the already with the summary outlet of the 5 billion deal to get out of the chemicals. Today in the part of its aboutcement, they talked what their strategy was and the outline that it will do as it tries to get oil and Gas Production down 40 over the next decade. Annmarie the other thing we need to talk about is trading. It helped shell and tou thao, is it a deep contango trade . Will absolutely. This is a pattern we have seen from shell to tou thao. Traders make money in a contango market. They make money in an oil fashion and this is a classic example. Its likely that bp, which had a big trading department, made well over 1 billion from trading oil in the quarter. Equated model works. This gives you a hedge to profit as oil prices fall. Trading seems like it was profitable for a lot of people during this quarter. Made at capital london lot of money trading in one day. Likel like if a small shop that can do it im being tongue and cheap time and i tongue and cheek. Suggest you check it out. Will is bloombergs executive editor for energy. Thank you for joining us. You can follow all the reaction to bps dividend cut on the top live blog tliv blog. U. S. Reserve officials are warning that the urgency of another round of fiscal aid to support the economy is serious. It comes as the political stalemate continues with democrats and republicans struggling to agree on whats needed. Thats right. It has benefit payments of 600 per week. They expired at the end of last month. Democrats want to extend the program but republicans wanted it reduced. They are arguing its too peoples and discourages from returning to work. We spoke with Robert Kaplan about whats needed to support the economy. Ert it still our view that we will contract for the year at about 4. 5 to 5 . We had very healthy rebound in the third and fourth quarter. Rebound is more muted in the United States now. And its caused me to think that the Unemployment Rate if we dont do a better job managing the virus the Unemployment Rate is likely to be above 9 and 10 . We have moved up our unemployment forecast. Rebound,nk weve got a but its much more muted than it was. Dont do a better job managing the virus, we will have lower growth and they higher Unemployment Rate. I have been spending a lot of my time talking more about the virus than anything else, because its so critical to the recovery. Unemploymentxtra bonus and even action moratorium are gone. Moratorium are gone. Has your staff monitored that on the economy, and should we expect a wave of defaults that might affect credit markets . Robert we have looked at it. One of the things unusual about this downturn is incomes have stayed relatively solid in a big part of the reason is these unemployment benefits. Normally, and a downturn, you see a drop in incomes. Its still my view that in some form we will get an extension of unemployment benefits. I am quite hopeful that will continue. You would see a further weakening in the economy if it didnt. In particular, because consumers would not have enough money in their pocket to spend. Any Business People telling you that 600 bonus was keeping people from coming back to the labor force . Robert a lot of Business People were telling me that, honestly. They were telling me it was challenging to hire people. We have looked at a number of studies, we have done our own work, we dont see it in the data, but i hear it from businesspeople. Whatever the right answer is, i think you still are going to need an extension of unemployment. It may be restructured from the 600, but i think its important we see an extension. I think the increased incomes, while it may have made a hard for certain individual businesses to higher, it helped create jobs because it has helped bolster consumer spending. So the net effect has probably been positive for the economy and employment. A number of your colleagues, well, at least a number of epidemiologists joined buyer colleagues say that we need another nationwide lockdown for about four weeks to defeat the virus, and that that should be job one over reopening the economy. What do you think about . That . Nk of robert i probably have different conversations with epidemiologists in the country. Havepidemiologists i spoken with, which have been widespread conversations, believe we could manage this economy and the virus and have the economy open. If all of us wear masks, thats first and foremost, that we need then we need a good Contact Tracing regime. But they believe if we all wore masks it would mute the transmission of the virus and you would not need to do a widespread lockdown. Iffact, many of them fear you still dont have good following of the health care protocols, the lockdown would be wasted. Advice is, their kit be very careful about the reopening and enforce a widespread practice of wearing masks, social distancing. Matt that was Robert Kaplan in anng with bloomberg exclusive interview from dallas. Up next, diageo sales are hit hard as the pandemic led to the closure of bars and restaurants. Why arent more people drinking tequila at home . We will speak about the companys ceo. Dont miss that interview next. This is bloomberg. Matt we are getting breaking ceo right now on the deputy leaving his position by the end of this year. , the sharest now will open in about 17 minutes, but it looks like the deputy ceo is going to leave his position at the end of this year. And have extended a time they will become the head of global banking. There is a shuffle in management at socgen. Sales have been hit hard by the closing of restaurants and bars during the coronavirus lockdown. Ecommerce and supermarket purchases failed to fill the cap. Revenue fell 8 in the 12 months through june on an organic bases. Joining us is the ceo of diageo. Aboute been talking a lot dash with other beverage ceos, about what they are doing a fill the gap. Heineken mentioned an online site where they are trying to sell more beer. Is diageo trying to be more aggressive online . That is not the best sales route from alcoholic beverages. Ivan good morning. Coming into the pandemic, the company is very consistent. Business is beyond. Going out to bars has clearly got impacted. But with dividend cost, the goal of the company, and im proud of how our people have moved with great speed. And to supporting our customer we are taking back cap a million cakes of guinness to make sure that next pint you have is perfectly fresh. To your question, in the last quarter, ecommerce is relatively small, but its accelerating. Business and ecommerce doubled in the last quarter compared to the prior quarter. We have been shifting our focus rapidly to supporting where the channels are moving to. U. K. To china to columbia, ecommerce is picking up. Two orobably taking three steps forward in the pace of which its picking up. Who would imagine that you could get a cocktail, a delicious margarita served to you, delivered from a bar in new york to your apartment. That is happening. Home delivery in the u. S. With ready to go drinks. In india, six or seven states have started allowing home delivery. In east africa, can yet and hasda kenya and Uganda People who will deliver product to the home. We are moving with a lot of servingto ensure we are our consumers effectively under these conditions that are in play right now. Annmarie its like you know when i was doing in new york for the past four months. My question for you is, a lot of your products are linked to some experiences. That is going out, bars, restaurants. Distancing measures are still in place, so will you ever be able to fully recover . The second part of my question is, do you think 2019 ended up eating week Alcohol Consumption ended up being Alcohol Consumption . They understand where they are, what they are thinking of what theyre feeling. Mosthings Consumers Want since lockdown in these conditions is, meeting up with family and friends, and going out to a bar, restaurant or festival. Motivation we believe would endure. Will see consumers go right back in. But what they are doing in the meantime is creating the experiences at home. So one of the trends we have seen is cooking from scratch and baking has picked up. We moved right into that space of social media and digital engagement. We have seen a very good response from markets like china to the United States. They are doing better. Programalker, we have a called kitchen sink drinks. Online we look at what ingredients you have in your fridge at home and design cocktails that you can make at home. Gete is a huge desire to bar quality cocktails at home. To your point of consumption levels, they have not gone up. We have seen per capita consumption come down for a long time. It stands very much from drinking in moderation. You have seen the shift from out of home to inhome. A market like the u. K. , where 40 of the business is home. The inhome consumption has picked up, but total consumption has dropped 20 . True that the overall populations are drinking more. Fromre seeing this shift bars to inhome. But we are encouraged by is the trends. We were talking about tequila. The 50 bottles of tequila growing doubledigit right now. We are seeing that trend sustain, particularly in the United States. Margins have really appreciated, i wonder if they could really expect a boost in revenue with those big margins to really help in the second half or in fiscal 2021. You are seeing a comeback in places like china as a precursor to what you expect in the western world. Can you tell us, from that, what kind of quality affect in Sales Recovery . Was ther last quarter weakest quarter because it had the biggest impact of the lockdowns around the world. A sequential improvement, even in the last quarter monthtomonth. It improved. As we look for the next couple of quarters we expect things to get better each quarter. In china, every day and every week is getting better. Reopening and we are seeing consumption pickup. The same happens in places like the u. K. , where the pubs opened a few weeks ago. We are seeing steady recovery. Its at about 70 of normal. The bear business the beer business in the first couple of weeks was 70 of normal. We expect that to improve, but it is based on the condition of the virus and Government Policies that were impacted. But overall, across the world, we do expect sequential improvement. Diageos ceo, thank you for joining us. Cells were lowered after the sales slumped due to the pandemic. One of the most interesting things is consumption is down. Any people thought that was locked more people would be drinking. Consumption going forward, i would expect that ivan feels is going to pick up as well. It has obviously come down during these times, but with the bounceback, and i think this is what shareholders are betting on , with the bounceback will come renewed increase in margin. The shares of gone from 2202 2900 over the course of this rally. So shareholders are definitely betting on something there. Coming up, we will take a look at your stocks to watch, including buyers in germany. Indicators down on trade gate as the pandemic kurds demand for some of the medicine. Thats next. This is bloomberg. Annmarie lets get your stocks to watch. Joining us is dani burger. Issued earnings that made it very clear that the pandemic hurt cls hurt sales of some of their medicine. That started to wane in the Second Quarter. Things like surgery and nonessential procedures were very hurt for the company. Issued theirlly fullyear outlook, including the coronavirus. They now see between 43 and 44 billion euros for the year. One share that has gone up is infineon beating estimates. They had a cautious outlook, saying the coronavirus pandemic would be the deciding factor in how the year shapes up. Some good signs from the auto industry, they are seeing concrete signs that that is turning around. We see though shares higher by 2 . Bp, annmarie, i know you have been all over the oil majors. Same story we are hearing. Insaved by trading, coming better than expected at a 6. 7 billion adjusted loss estimate within. 5 billion. They have cut their dividend. We have covered this. One of the main things is that they are higher by as much as 3 . Thought behindhe bp being, we knew this would we knew this was covering. Coming. Matt dani burger there with a look at some of your movers. Coming up on the market open, its the market open. We are a minute from the open of cash equity trading. Mustdent trump says tiktok close u. S. Operations by september 15 in letters unless it is sold. He any sale must include a substantial payment to the u. S. Government. Ism data and hints from trump he could take executive action on fresh virus relief. Pp cuts its dividend for the First Time Since the deepwater horizon disaster. Matt, good morning. We are decisively risk on this morning even though mark cudmore says yesterdays move and this mornings moves are a bit of a head fake. He sees more negative pressure. Matt thats right. There are people out there who are bullish, as well. There are two sides of the coin. You can see futures are up. Ftse futures have now turned higher. This as asian stocks pretty much across the board put up some gains after new records, especially for tech stocks in the u. S. Yesterday. Take a look as the live cash open kicks off at our global macro movers screen. Risk assets in each column. On the far left, equity indexes opening up. Swinging back and forth between gains and losses. The cac opens up 0. 6 higher. 0. 5 uro stoxx 600 is higher. The ibex is 0. 4 higher. In general, european stocks are opening higher, while the ftse fails to really find direction in the first seconds and minutes of trade. But Global Equities are closing in on levels that we last saw in february. U. S. Stocks got a boost on the news that the white house is exploring whether President Donald Trump can act on his own to extend enhanced employment benefits. A manufacturing expansion in july. Also helping to boost indexes. Slowed infections in several states did not hurt either. Joining us is our guest. Time is it still time to be risk on . Are their legs left in these rallies . I think it is still the time to be invested because the trouble with investing at the moment is that if you want to go and hide, there are very few places to do so. Your alternatives, such as core Government Bond markets, are offering very little. That to me is the strongest support for risk assets at the moment. Look across the investment andscape and while equities credit do look relatively expensive compared to history, they dont look as expensive as the core Government Bond markets. So, we do still see some scope for risk assets to grind out reasonable returns through the second half of the year, but i think this is one where investors do broadly accept that the pace of gains that we saw for much of q2 are unlikely to continue from these kind of starting levels. Annmarie but what about the risk . Especially the nearterm risk. The u. S. Election in november. We still dont have a fiscal package out of d. C. We really have brewing tensions between china and the United States, some saying that is going to lead to a bifurcated tech space and supply chain. What risk do you see to this positive outlook you have . Hugh of course. I think those are the right ones. For me, the u. S. China relationship is heading down a tricky path and that has really been the story the past couple years. I think investors are now quite used to the idea that these two superpowers are going headtohead. And frankly the news that we have seen over the past few months i think from a macroeconomic perspective has been less worrying because it tended to be the tariff escalation that has had more of an impact on macro data thinking about Business Confidence and corporate tensions. Risk that markets are unsettled by escalating hostilities, but that has not changed for the past couple years and i dont think it will change for the next couple years. Similar story to me with the u. S. Election. On many of the key policy aspects running into november, both the democrats and republicans look relatively well aligned. You take regulations toward big tech as an example and investors can understand that the direction is going to be tougher toward these big tech names. You are absolutely right. This is not a time to be overly balled up, but we still see pockets of opportunity, particularly in those markets that have the really strong suchrt from policymakers, as investmentgrade and highyield credit at this point. Matt the rule of law is important to investors and it could be concerning of countries xyz company isng a Security Threat, so we demand to be sold and the buyer needs to also give us a percentage, give us a big payoff in that sale, as well. Does this worry you about investing in the u. S. Hugh not personally, no. Clearly, there are Many Political agendas at play here, but broadly when you look at the u. S. Market you are still looking at names that have really strong Balance Sheets and often very diversified earnings streaks. When you are picking through a company by company basis, you want to be thinking about the ability for a corporate to grow, not just through, and day activity through m a activity. We know through these make a cap names that that will get tougher we know with these mega cap names that that is going to get tougher and tougher. But if you can demonstrate confidence for that corporate to grow sustainably over the next threeyears is there because gettingll have ways of higher revenues that had not just reliant on buying that growth, i still think there are decent opportunities ahead. Clearly, there is a political complicated landscape, but that is not enough of a reason to be sitting on the sidelines waiting for clearer times. Because life has been complicated for the past few years and i suspect it will continue to be so. This morningh, what we are looking at and trying to digest his yesterdays massive tech rally. We wanted to know for our question of the day, is the next 10 for the nasdaq higher or lower . Where do you see it . Hugh sure. I think when we look at why the nasdaq has rallied so hard it is because there have been themes this year that have been accelerated by the type of recession we are looking at. The shift to Online Retail being a very good example. One which i think is now broadly understood by the market. When i think about investing within tech, i still think there are decent opportunities to play those types of things, but perhaps now when you are looking at some pretty elevated valuations and pretty challenging earnings estimates to meet in the quarters to come, there are cheaper ways to play that theme than focusing on the pure headline favorite nasdaq names. I think the nasdaq from here, it is hard to say when you are at alltime highs, yes, clearly there is a 10 upside given what is already in the price. But i do think the themes that have been driving the tech winners to this point can continue. It is may be just looking at more sophisticated and slightly more nuanced ways of playing those same trends. Matt all right, we are going to keep you with us for more. Hugh gimber is a jp morgan Asset ManagementGlobal Market strategist. We have more to discuss with him. Coming up, alphabets big sale. Googles owner is auctioning 10 billion of efg debt and rockbottom yields as the credit risk and europe falls to the lowest since february. We will talk opportunities in the credit space next. This is bloomberg. Matt welcome back to the european open. 10 minutes into the trading day. Green arrows across European Equity indexes, specifically in the content here continent here. A bit. E just rises lets get the Bloomberg Business flash now. Lets go to london. Has cut its dividend for the first time in a decade. It was widely expected after shell made a similar move, but it was unthinkable before this year. Loss ofted an adjusted nearly 6. 7 billion, not as bad as expected. Pandemic has hurt demand for some of its medicines. The slow down in nonessential medical procedures hurt the company. They got a boost earlier this year from people stockpiling overthecounter medicine, but that effect waned in the Second Quarter. Twitter is being investigated by the ftc for alleged privacy violations. It is another setback to the company that has struggled in recent years to protect recent data and account security. The ftc is probing the use of phone numbers uploaded for security purposes to target people with advertising. That is your Bloomberg Business flash. Annmarie thank you so much. In the business of breaking records. Alphabet has sold 10 billion in bonds at the lowest yields yet seen for corporate debt. 2. 5 2. 25 has a yield. It was the largest Corporate Bond sale dedicated to esg. Is backber gimber with us. Lets start with what alphabet has announced. Will this open the floodgates do you think . Hugh i think the floodgates have been open for some time, really. Corporates have been tapping into very strong credit markets through much of q2 and into july and august because simply financing has been very cheap to access. Since the feds announcement at the end of march that they would provide that backstop to credit markets, i think the question for corporate is really for much of this has been why not go and access some extra funds and strengthen Balance Sheets in a period when the Economic Outlook is still highly uncertain and therefore why not simply absorb a bigger cash buffer in case it becomes necessary to use that further down the line . So google is clearly at the extremes of that in terms of tapping in at record levels, but i think this is a continuation of a trend that has been in play for some time. It has really been supported by the Strong Demand for yield, the hunt for income. Investors looking outside the Government Bond space and tapping into credit to find anything with a marginally higher coupon. See weou expect to have already seen 190 bankruptcies in the u. S. Year to date is that going to be a problem here as well in q3 and q4 more than it has been in the first half . Direction think the of default has to be higher, but i think a relatively gradual pace. Good example why. Corporates are able to roll their financing relatively easily. If anything, there are problems, but they are likely to be further down the line. The cash flow hurdles for corporates through the rest of the year look relatively manageable. Are stilli think you getting decent compensation. See thet continue to same amount of spread tightening we had in q2, but for me, i would expect credit spreads as a base case to be grinding moderately tighter given the technicals in the market at the moment. Even with massive amounts of absorbedhey are being and credit spreads look very well supported from here. Annmarie you also like the Energy Sector, specifically highyield. I want to know what names you are interested in. Hugh i would say i like the highyield sector more than the Energy Sector. Still one ofy is the most challenging parts of the market because i think you are still trying to properly understand which are going to be the companies that are able to sustainably manage with lower oil vices ahead. I think it is broadly understood that we are not going back to 70, 80, 90 a barrel for oil in a world when demand is taking some time to recover and frankly i think the demand for oil over the next five years is going to be lower than it has been over the past five years. High yields i think you stay away from the Energy Sector if you can end if you do go into energy, you need to be very careful about picking through the names which have effectively Balance Sheets that are Strong Enough and Business Models that are Strong Enough to cope with oil prices around current levels. I think the outlook for here is pretty tough to see Oil Prices Moving that much higher. Wanted to ask you about sovereigns. Through all of the european 10 year maturities, i dont see any yielding more than 1 bar greece. Even italy is yielding less than 1 right now. Investors can still find some Capital Gains in these peripheral issues . Suspect that much of those gains have already been made. Think the news around europe, the positive story around the periphery is pretty well reflected. You are having to look very carefully within Government Bond markets to find opportunities today and spread the net wider. Chinese Government Bonds are an area that have done particularly well this year and an area that i think for many investors would not have traditionally been part of a core portfolio. Within rates, you are having to look harder. When i speak to multiacid investors, they are speaking not just about allocating from Government Bonds into equities, but thinking about assets that can replace some of the qualities Government Bonds have traditionally offered in a portfolio. I do still see a small amount for yields to move lower, but i dont think there is very much more, so investors i think are primarily invoke focused on hunting for alternative forms of income. So that explains a really Strong Demand across the industry for areas and infrastructure and real estate trying to offer some of that income that Government Bonds have historically provided , which wont be there going forward. Matt thanks very much for joining us this morning. A lot of insight from you today i think investors are going to find a very useful. Jp morgan Asset Management level Market Strategist hugh gimber. He will continue the conversation on Bloomberg Radio as well at 9 00 a. M. U. K. Time. If you are in the city, tune in on london dab. Otherwise, google it. Or if youp can figure out co. Uk, that may be an option as well. Commerce bank deals a blow with its pair pick for chairman. This is bloomberg. Annmarie welcome back to the european open. We are 21 minutes into the trading session. We are seeing gains across the dax and the cac. On wall street, being black often means being held back and deprived of the best opportunities. We are putting the spotlight on diversity. The president of harris and Harris Wealth Management spoke to bloomberg tv about the realities of wall street inequality. I do think that there is an opportunity for wall street to embrace diversity for sure. One of the reasons why i think that there is room for growth is because, as you highlighted in haverticle, so many of us gone there with the hopes of ieving success to then be to then deal with the harsh tolity of not being able reap the levels we have seen our white counterparts reach. That has been disheartening for me because i wanted to succeed when i came out of college. Achieve theto american dream. That was the president of harris and Harris Wealth Management. You can catch more of our coverage and interviews in the latest interview of the market magazine, a special edition out now taking a closer look at diversity every it i suggest you go get your hands on this, matt. Matt yes, absolutely. Commerzbank delta blow to its secondbiggest shareholder Cerberus Capital management by appointing hansjorg vetter as Supervisory Board chairman. They had tried to block the move. Joining us now is bloombergs german banks reporter in frankfurt. Brouhaha was this . , i always find it amusing it is named after the threeheaded dog the guards the gates of hell why wasnt cerberus able to block vetter . Hi, matt. It is a good question. They said they did oppose vetter s appointment very vehemently. They sent a letter to the Supervisory Board saying he is not the right guy for the job, weve got other candidates, dont appoint him. s Supervisory Board overrode cerberus. They essentially told them, we dont care about your opinion. That is bad for cerberus. It makes them look bad. It is also bad for the new chairman. Veryw faces a big and active investor who clearly doesnt like him. Annmarie so what is the future going to look like under him . The shortterm future is to find a new ceo. The current ceo wants to step down by the end of the year or when they have identified a successor. That is happening and it is going to be the formal task for the new chairman to find someone to lead the bank. And then the bank of course is in desperate need for a very, very deep restructuring, for a very deep new round of costcutting that the new ceo will need to initiate. The sitting ceo had plans to cut the workforce by a quarter and make very other deep cuts. It is likely the new ceo will intensify those cuts even, so the bank is in store for very deep change and they will need a ceo who can push those changes through. Annmarie bloombergs german banks reporter steven arons, thanks so much for joining us. Bp is higher. This comes even after they cut their dividend. First time in a decade since the deepwater horizon disaster. The stock is up more than 5 . Of course, their loss was less than expected and the dividend cut was likely priced in. Bayer to the downside. Down more than 3 . They said the pandemic has her demand for some of its medicine and that put pressure on the stock. Diageo is the biggest loser this morning on the stoxx 600 after earnings were heard bad by closed bars and restaurants. They still have no guidance for next year. Interestingly, the ceo said ecommerce is small, but growing. Matt i think that is a really fascinating avenue for beverage makers to sell alcohol. I know in the u. S. It is very difficult because youve got so many laws about how old you need to be before you can buy alcohol, but another countries it is not quite as hard. Coming up, remote i. T. Access reports a bounce in secondquarter earnings as it benefits from a rise of home working during pandemic lockdowns. We speak to the ceo next. This is bloomberg. Welcome back to the european open. We are 30 minutes into the European Market trading. The stoxx 600 has reversed early gains we saw out of the gate. We are now a little bit to the downside this morning. We have had everything today in terms of earnings. The virus is hitting dividends, drinks, drugs, semi conductors. The sector picture really shows what is going on in the underlying movers this morning. Gainnd gas is the biggest er. Bp doing well today even though they cut the dividend for the first time in a decade. Food and beverage dragging down the index. Diageo missed estimates, they did not give guidance. They were really hit hard by the closing of restaurants and bars. Lets get to the bloomberg first word news. Good morning. Tictoc has to sell its u. S. Arm by september 15 or close. That is according to President Donald Trump. She says he does not care who buys it, as long as it is a big, secure american company. The bank of england may be undermining the u. K. s push for a green recovery. That is the finding of a think tank. Its report says the central bank is effectively subsidizing industries in the rescue program. Large amounts of money has been pumped into the dirtiest sectors. Argentina is moving closer to an agreement to restructure its debt. The nations bond rallied on the news. The talks are still under discussion. It would mark a first step toward stabilizing the struggling economy poised for its Third Straight year of recession. 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. This is bloomberg. Much. Thanks very has been a pandemic success story. The german firm makes tools for Remote Access to computers and has been a big winner from the rise of working from home. It has reported a bounce in secondquarter revenue. There is uncertainty if that success can continue. The stock is down a little bit this morning. Joining us now to talk about the companys latest blockbuster earnings is teamviewers ceo, oliver steil. Oliver, thanks very much for joining us. I guess the most important question for investors is how sticky your success, your progress can be and what kind of a future are we looking at in terms of the working from home phenomenon . Think the pandemic has shown that Companies Really need to prepare for Remote Working in a broader sense, so not just office workers, working from home through videoconference, but also making sure that many other tasks across functions in a company can be performed remotely. That is where our Solutions Come into play. We connected devices, machines, to the backend systems and now many more tasks by workers can be performed in many different places. Thats what Companies Need to prepare for and that makes our solution very sticky, from our perspective. Annmarie with more and more people returning to work, you have a lot more customers of people stuck at home. Do you think you will be able to hold onto these new customers . Oliver thats what we see. I think the common understanding is that a lot of these new Remote Working processes will stay. I think companies are adjusting to the new norm. I think new business processes have been emerging faster than before. Digitalization was around already before across all industries. Now, it has got the extra push and Companies Want to be prepared and they want to keep some of the good things they learned during the pandemic crisis. Therefore, we believe it will stay and that is also what we are seeing in our numbers. Matt i wonder about m a. It has been lackluster overall during this pandemic, but it looks like people are beginning to find opportunities. You had previously found you be max ubimax. Do you think there is more m a to be done for teamviewer this year . Can you find an opportunity here and take advantage of it . Oliver certainly, we believe that we have a very strong organic growth strategy, but also if there are Technology Companies which serve the areas we were just discussing around digitalization of business processes, that is attractive and interesting to us. We keep our eyes open. We look at companies. Ubimax is a perfect example. It allows for digitalization solutions. Very Interesting Technology significantwe added Technology Competence and reach to customers. Those type of companies will be attractive. Of course, we look around and we will see whether there are opportunities. Whether it is this year or next year, that remains to be seen. It also is a factor of the Overall Economic development and the development throughout the year for us on the company, but also for the economy overall. There regions, oliver, that you think teamviewer could be stronger in . Or are there areas in the business where you want to add competency . Oliver yes, i think the key areas which we like a lot is digitalization in the industrial environment and in the service environment. So everything which has to do with iot, artificial intelligence, Data Analytics to allow for collaboration between doctor, patient, service technicians, and the like. These areas are very attractive for us and we develop our own product. We innovate into these areas but we also have an open look at companies. Clearly, aipac is a growth region. We opened offices in india, japan, china over the last two years and we have doubled or done on this. Our Fastest Growing region has been the americas, specifically u. S. And canada. We are also doubling down on this. We are on a come i would say, global rollout on a, i would say, global rollout and we want to deepen our Technology Competence. Annmarie prior to this job, you are a partner at an International Private equity firm. What does the current landscape look like for sponsors . It has been almost three years now. I think, probably the way i see it, theres opportunities which are coming up. I think the financing markets look pretty good in some regions. Due to the pandemic, there is companies which are available for transactions, maybe more than before. And i think that is fundamentally an attractive environment. But of course, there is lots of uncertainty also with the second wave of the pandemic, the cross regions. It is probably not such an easy play but there is opportunities from our perspective. Matt how closely are you following, you know, the virus uptick . The last few days in germany, we were adding again almost 1000 cases in each 24 hour period. Are you worried about a second wave . Oliver we follow that very closely because we have offices around the globe. So as much as we work now and the german headquarters, we work on a rotational basis, 30 50 depending on our team, in the office. In other markets, for example, u. S. , tampa, we are working from home. The same with mumbai, australia. We see the pandemic there. So yes, we are concerned. Numbers are increasing and with the holiday season, i think we all see the pictures of people being very close to each other. That puts quite some question marks about the time when people return to vacation and are back in their home countries. So yes, worried. Matt oliver, thanks so much for joining us. Oliver steil there from teamviewer talking to us about the business and opportunities. Great to have some time with you. We hope to get you back soon. Up next, president said tiktok will have to close its u. S. Business by september 15, unless there is a deal to sell the social Media Networks american operations. And if there is, he wants the federal government to get a big payment as a result as well. We will look into that story next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are 42 minutes into the trading day right now and we are seeing gains in European Equity indexes. The ftse kind of hovering back and forth between gains and losses, currently down a little. We see the dax gained 0. 2 and the cac in paris up 0. 6 . Lets get a Bloomberg Business flash news now. Commerzbank has appointed hansjoerg vetter as its Supervisory Board chairman. It is a blow for itss secondbiggest shareholder, cerberus, which tried to block the move. The private equity firm launched a campaign in june to change the lenders strategy. U. S. Aviation regulators have proposed a long list of for boeings grounded 737 max. The release by the federal Aviation Administration is a major step in getting the 737 max backup into the air. Alphabet has sold 5. 75 billion of bonds, the largest ever Corporate Bond sale dedicated to environmental, social, and ernance the borrowing can be for Green Energy Projects and green building. Annmarie thanks so much. President trumps latest assault on tiktok has opened a new front in the trade war with china. It may see restrictions on Tech Companies that could potentially have ramifications for the worlds biggest companies. The president says tiktok must sell u. S. Operations by september 15 or close down, and has insisted any deal would have to include a substantial payout to the u. S. , though it is unclear under what authority. Pres. Trump the u. S. Should get a very large percentage of that price, because we are making it possible. It is like the landlord and the tenant. Without the lease, the tenant doesnt have the value. We are sort of in a certain way the lease. We make it possible to have this great success. Annmarie joining us now is bloombergs Senior International editor in hong kong. Thanks so much for joining us and good morning. What could complicate microsofts potential deal with tiktok . One thing that could certainly complicate it is the chinese government, according to an editorial in the state run china daily. Today, it said they would not necessarily expect an acquisition of tiktoks u. S. Operations by microsoft and may take action against washington if such a sale is forced. That would be a very large hurdle to trying to do this deal. The other thing is trying to do it by september 15, a date that President Trump said this deal must be done by or he will ban tiktok in the u. S. That is a big deal to get done in essentially a little over a month and a half, especially given the International Nature of it and given that microsoft has said it is trying to satisfy all parties in the deal. It is a complicated deal to start with. Matt you know, the interesting thing, the whole thing is complicated for a lot of people to understand. The u. S. Now saying this company , because of security concerns, cant operate there. And maybe that will make it easier for a local competitor to cheap, already raising eyebrows. But now, President Trump is saying that the u. S. Should be getting a payment as well. If microsoft buys tiktok, then it has to also send a payment to washington . Odi well, it is really unclear under what authority President Trump could extract such a payment. First of all, it would be unprecedented for the u. S. Government to collect a cut of a transaction from a company in which it does not hold a stake. President trump said the money would come from china or on american buyer, presumably like microsoft. Thats that this is he could get this deal because he has essentially brokered it using his language about landlordtenant dynamics. He brokered it because he said he would ban it if it wasnt purchased. It is really unclear if any of that could happen and whether it would be legal in the first place. China coming out and saying they would not necessarily accept an acquisition of tiktoks u. S. Operations by microsoft anyways, so its all complicated. Microsoft seems to be trying to do this deal, but every day, we get sort of a different situation with this. Friday, it looked like tiktok was going to be banned in the u. S. Today, we hear about the payment the president wants. Who knows what we will see tomorrow. It is just an unfolding situation. Meanwhile, plenty of people in the u. S. Are upset that they may lose tiktok. It is very popular. It started out being popular with teenagers. Now, it is popular with a whole range of people. Annmarie seems like more people are signing up. I still dont have one. I feel like i need to check it out given we talk about it almost every day. There are complications. You lay out a lot of the geopolitical risks. What about the implications for the internet . Are we going towards this bifurcation of the tech world of east first west . Jodi there is broader implications here jodi there is broader implications here than just this big deal. It could have in normas samifications enormou ramifications and could backfire on the u. S. As well. Mike pompeo is saying that they are going to continue this Pressure Campaign to ban huawei and to try to get allies to ban huawei. There is a lot of things going on but it is really expanding the technological fight, as well as obviously this grown julia political fight growing geopolitical fight between the two countries. Matt you have to wonder how far it could go, not just east versus west, but what if brussels decided that google was a Security Threat and forced the sale of its european operations to say sap . If you start to confiscate businesses because they are a Security Threat, then force their sale to your own domestic competitors, and creates real problems globally. It creates real problems globally. Right and it is unclear where the u. S. Would draw the line. How far down that road can you go . What do you consider a National Security risk . Under what auspices are you deciding that . Knownhina can they are to and have made it very clear that they will take retribution for every step the u. S. Does. What about European Countries . What if they decide that there could be some Security Risk for them as well . Kind of get into this global technological battle and at the same time, you dont see 5g being expanded. Much. Thanks very Jodi Schneider coming to us out of hong kong. Next 10 for the nasdaq a higher move or a lower move . We will put that question to kristine aquino. This is bloomberg. Annmarie welcome back to Bloomberg Markets european open. Todays3 minutes into trading session and we are off the highs of the date. The ftse 100 down, as well as the cac. Joining us now is kristine aquino. I want to start out with tiktok. We just spoke about the political implications. We are not seeing much reaction in the market. What do you make of these brewing tensions between beijing and washington . It is very interesting that we have not seen any spillover into the tech sector or much of the other parts of the market. Forink that speaks to how investors, this is still a very nebulous concept, the concept of u. S. Banning Chinese Companies or may be trying to circumvent it and find a way to get some revenue income from them. It is all very hard for markets to comprehend at the moment. And that is why i think they are shrugging it off and dismissing it as a theoretical risk rather than something that they have to worry about eminently. I think this is increasing the attention on tiktok specifically but on chinese Tech Companies in particular. It is interesting to see grown men and women defending tiktok, which is a dance app for consumers, from my very little knowledge on it. I think this would work out to increasing the attention on this particular sector and chinese tech, which is, as we know, a growing sector. Matt i guess the concern is that the chinese estate would danceteal generation zs moves, which i can understand the severity, the seriousness of that. Let me ask you about the mliv question of the day. Move for the0 nasdaq going to be higher or lower . So far, matt, the verdict that we have gotten decidedly higher. That speaks to the exuberance in the sector, that it can shrug off risks like tiktok conversation and others. It also really speaks to how tech has taken on the mantle of being the gauge of animal spirits in markets and in the economy. We have spoken a lot about the merits of valuations and how tech in particular is looking particularly overheated on that front. But it really seems to matter havee for investors, who apparently a lot of exuberance and are looking for avenues to express that. Senseow, it does have the of the tech world being a little bit disconnected from reality of the valuations and those being a little bit i. It also speaks to the idea that investors in the sector are looking at more than that in valuing these companies. Annmarie we are going to have to leave it there. Kristine aquino. Sources close to the matter tell me she actually does have a tiktok. Stay with us. This is bloomberg. Francine ticking clock. President trump says tiktok must close u. S. Operations by september 15, unless it is sold. He insists any seo must include a substantial payment to the u. S. Government. Bp because its dividends for the First Time Since the gulf oil spill. Sales slump at diageo. Closures at bars and restaurants weigh on the drink maker. We will hear from the companys chief executive. Welcome to bloomberg surveillance