Coming up, we will be talking with curtis johnson, the managing director at carlisle. Talking about what trying toericans face break into the industry. Bank and tesla are surprising reporting surprising numbers. Our guest is joining us from italy. Your metrics are strong. Been notrating has it being able to get back to shareholders because of ecb guidance . [indiscernible] the expectation is the end of december to be able to pay dividends again. A fourth quarter, are you confident you will pay dividends and about buybacks . X part of the priority. Buybacks are not a priority. [indiscernible] been inas the economy july and what are economists telling you about their mood for the future . [indiscernible] in 2021, the growth in gdp could be higher than 5 . [indiscernible] the positive trend will be in 2021 and my expectation. To take a quick break to make sure we hear you perfectly so we dont miss a word you say. We love working from home. We will get back on the interview once we fix the audio. This is bloomberg. Steel. Alix lots of earnings coming up over in europe. A company we want to focus on is diageo. Fullyeary reporting results that missed estimates. Tough to sell guinness if you are in a bar. Aboutke to the ceo revenue climbing back to 2019 levels. The things Consumers Want most coming up to the lockdown is meeting up with family and friends and going out to a bar or restaurant or festival. Would believe is going to endure and as conditions improve, we will see consumers go right back in. What we are doing in the meantime is creating the experiences at home. Is cookingthings from scratch and banking. With a lease, we moved right into that space on social media. Baileys, we moved right into that space. Johnny walker because we have a program called kitchen drinks where online, we look at what ingredients you have in your fridge at home and design cocktails you can make at home because there is a huge desire to get bar quality cocktails at home. Your point of consumption levels, they have not gone up. We have seen sequentially per capita consumption come down for a long time. We obviously stand for drinking sensibly in moderation. Shift from outhe of home to an home but in a market like the u. K. Where 40 of the businesses are at home, that has collapsed. An home consumption is picked up but total Alcohol Consumption has dropped about 20 . Is not true that the overall populations drinking more. From outeing a shift of home to inhome. We are encouraged by the trends toward premusician. Premium visitation. Premium brands. It is your margins, i know investors have really appreciated. I wonder if they can expect a boost in revenue with those big margins to help in the second half or in fiscal 2021. I assume you are seeing a comeback in places like china as a precursor to what you expect in the western world. I wonder if you can tell us from that what kind of quality you expect in a sales with every customer Sales Recovery . The Second Quarter was the weakest quarter because it had the biggest impact of the lockdowns around the world. We are seeing sequential improvement even in the last quarter monthtomonth. As we look forward, the next couple of quarters we are expecting things to get better each quarter. To your point in china, every day every week is getting better. The on premises reopening and we are seeing consumption pickup. The same happens and u. K. Where pups have opened a few weeks ago. We are seeing stable steady recovery. Business in the first couple of weeks was 70 of normal. Butxpect that to improve, clearly is based on the the virus and government policies. Overall across the world, we do expect sequential improvement. Of diageos ceo talking about what happens for the alcohol industry during covid. I want to head back to francine in london with her interview. We think that the audio is better. We love working across satellites, across regions. Him abouting to ask if you can hear me, do you think you buying this new Company Means we will be seeing more crossborder mergers . Can you hear me . If you can hear me testing live can you talk to me about crossborder mergers . It is too early to talk about for the european landscape. There aretion is that a lot of areas in which fridge you have some more clarity. The possibility to have theetries emerging for european landscape. [indiscernible] my expectation would be to look at some areas of Wealth Management. A strong franchise and Wealth Management protection. [indiscernible] do you think that there is possible crossborder or are the various players going to take a bit of a breather . Competitorst some sure there are some that arent in not such a good shape. It is possible there could be some acceleration, but it will not be for the sake of [indiscernible] i think it will be difficult for to justify a cross action in this moment. You need to have a shareholders review. To convince the shareholders, you have to propose a good plan and the majority should be on the cost side. The loan provisions that you announced today were below estimates. What gives you the cons confidence that you dont need to set aside more money at this juncture . Looking at our portfolio, we have good coverage in all the sectors. [indiscernible] have any job losses can we foresee . We think that the new company is in much better shape than at the end of 2019. My priority is to bring with me isto a clear motivation that. He key factor of my success thank you so much for giving us a bit of your time. Congratulations again. We spoke to a lot of analysts that say this is one of the best in class not only in italy but in europe. Usi appreciate you bringing that interview. We will talk about bp. This is bloomberg. Live from new york, im alix steel. The virus pandemic offended the oil business. Jp morgan headhe of em ea. It sellable rumor, by the news on the dividend . Of relief combination from investors around dividends. You have seen a lot of big headlines in terms of transition. Theory to remove the monkey on their back. The second point is that the energy transition, this bold move to formalize manage decline in oil and introduce the new business with targets it is now conceptualizing transition more than just an idea. But with numbers behind. That is pulling in a different set of investors than the Traditional Oil and gas equities. Enough inoing to be terms of bringing in the new investors . If the do they need to do more . Theyre still giving a great yield as you witness the transition. To be clear, being supported by the predominant Oil Businesses from 90 oil and the oil cash flow is going to be what is driving the growth for the next 23 years. They have been clear that ultimately the first few years still be very oil dependent. The point is as they transition into the new energies and scale that up, you have a barbell. You have an Energy BusinessEnergy Prices go up and can generate loads of cash flow. Alongside that, you have Renewables Business that gives you more consistency, pretty debility which we havent had given the oil volatility. That is something different. You dont see that. You believe in oil and you buy the best cases or you dont. This is something in between. Part how to evaluate than . Use the yield user traditional metrics. Use your traditional metrics. As we look forward and try to measure business, you could argue the valuation of bp translates being an oil company to Renewables Business with oil. That is going to be a blended mix between Utilities Companies and traditional metrics. When we look at it on a blended valuation, you can see the upside there from where we sit today and a big compression of the yield. When will we see the proof that all of this is going to work out for them . Great question. First point, lets see what they are saying in september in terms of the Building Blocks around the business. Execution is absolutely clear. Second is going to be scaling of the new energies business. Theres going to be a mixture of organics, interesting in the right things as well as can again making sure they do good m a. Doing good deals, generating value, that is ultimately what people will be looking for. We have to leave it there. Tomorrow, i will be speaking with the ceo of bp. 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The dax off, the cac 40 holding onto their gains. ,he downside in health care down almost 2 in european stocks. Wantedr asset classes, i to highlight what is happening in the bond market. Solid buying coming in. Italian yields down five basis points. German yields down three basis points. In the u. S. We did touch a new closing low for the 10 year. All that money flowing into the bond market. Volume light . Who is to say. We get a lot of Economic Data and the u. S. On friday. I want to point out the swissie. It is the safe haven of choice. Fuwant to bring in scarlet to talk about the sectors and individual movers. Kind of an earnings stop in europe. Scarlet earnings coming in fast and furious or thick and fast as the british might say i hope i do not offend guy with my that accents. Todays leading dinners debt todays leading gainers autos and travel,p, banks leisure, each up 3 in august. Ults cea said he will focus on margins. Daimler had a double upgrade from a buy to a cell. Sell. Sa health care the weak link, that is due to bayer. Chemical and food and beverages also in the red. Food and beverages is the only group to decline this month. When you look at individual movers, i know you were talking about bp. The bad news is priced in went bp slashed its dividend in half. Paulo, alix do the accent . Scarlet i cannot. It would be embarrassing. They set aside more money but revenue came in more than expected. Easyjet adding flights despite the pandemic. The july low, 84 . That means the plane flew 84 full in the month, a huge contrast what we are seeing the u. S. Up 5. 4 . A big problem is that restaurants, bars, and sports arenas were all closed. Organic sales fell eight performed for 8. 4 . Alix that mightve been the most entertaining market check. Scarlet aim to please. Alix scarlet fu. , portfolioley manager at bank in templeton, katrina, i wanted to touch on bp. Do you want to buy in oil company does not going to be an oil Company Still has a 5 dividend yield . I think the dividend yield is what makes it exciting. Normally when we have large dividend cuts we see stocks go down. That is a real testament to the fact they came out to an ambitious and comprehensive plan to try to transition their company away from its carbon moresive footprint into renewable and more Energy Efficient production. One of the things we did not like about what they said, this is from an investor point of view, is the fact they are not investing in renewables just for renewables stake. They are doing it because it makes sense. Bp is using its integrated platform to offer companies a comprehensive renewable solution. A lot of these Companies Trading in very expensive multiples can offer niche solutions. Being able to offer that integrated solution and help them make the renewable targets we think is a good value proposition, particularly to be the esg partner of choice. Alix when you look at the energy stocks, is it bp or others like total . Total is still an oil company but they have a huge lng portfolio plus lower breakevens. Katrina we own bp. That is one of our biggest positions. We own Royal Dutch Shell, and i would say Royal Dutch Shell is a great counter to what happened at bp. When they cut their dividends they did not come out with such a comprehensive strategy, whereas bp you need to give them the gold star into how they communicated into the market. They did cushion the blow from that dividend cut. Alix that was two months ahead of schedule. The other one we have seen a last week and a half has been banks. It has been a hodgepodge from bnp blowing it out of the water to socgen not being able to get anything done when it comes to its equity trading portfolio. We heard yesterday one of the deputy ceos today was ousted at socgen. What is your biggest take away from the banks . Katrina in terms of the Banking Sector on q2 earnings, you have the Investment Banking business has been a strong performer, and you can see that is related to the volumes. We had so much volatility with the markets and the Second Quarter. They have benefited from that. Where we have seen a lot of the weakness is in the Retail Businesses. You talk about socgen. That was down 9 , bnp down 13 . The Retail Businesses are down. On the cost side of things, all of these businesses have benefited from covid types. These are very much temporary , people expenses working from home, longer hours, more productivity. That is what we have seen in the Banking Sector. Alix what we can it what can we expect when it comes to unicredit or ing . Katrina we like most of the franchises for the long term. Have seen things we through this entire banking earnings season is there is no investor interest in the Banking Sector. That is a result of the fact the sector is overbank. So many names, so many things for an investor to cover. That is a good side when you do have m a and consolidation we need to have m a and consolidation in banking. Alix i feel like we have wanted to see consolidation in europe banking for years. Why do you think now it will happen . Wanted to see Fiscal Consolidation in europe and waiting and waiting. I also thought wheat wasted covid crisis. A big check mark to Angela Merkel forgetting that European Recovery Fund through, which is very much positive. Now it feels it is europes time. And that i will put the fact that they have fiscal union, they have the unified bond offerings, so maybe we can see banking consolidation against that backdrop. I do feel for once europe is coming into its own. Alix lets wrap it up when it comes to the vaccine and drugmakers. Everyone is trying to play the vaccine covid thing. How are you doing it . Are you buying into it . Katrina we do not short so we do not play losers. Institute, ilken think they have great data on what is happening. It is very digestible for the retail investor. There are 208 vaccines in development at various stages. I am so optimistic about our ability to innovate and come up with a novel solution to this. Lets talk about one of the names. It is glaxosmithkline. We own it because they have a new ceo and a new head of r d. They are reinvesting in the pipeline that we are longterm investors. We are looking for that pipeline not to play out in the next water two years, but the next five to seven. One of the areas of glaxo we think investors are overlooking is there vaccine franchise. That is away where we get the restructuring we like as investors, we get a transformation of the portfolio, and we get a kicker from the vaccine portfolio. Alix good to catch up with you. Katrina dudley, portfolio franklin templeton. We want to check in on first word news. Ritika nancy pelosi and Steven Mnuchin signaled the first small progress on a stimulus deal. They had into another round of negotiations today. Republicans and democrats are still far apart on key issues, including supplemental unemployment benefits. Was downgradeds to a Tropical Storm as it made rainfall in reached inland over north carolina. It prompted Tropical Storm warnings all the way to made, including manhattan all the way to maine, including manhattan. The storm does not pose a threat to any Major Oil Refineries or platforms. Could be target american journalists in hong kong. That is according to the editorinchief of chinas global times who has become known for accurately predicting beijings actions. Says if chinas journalists are forced leave the u. S. , china will retaliate against reporters in hong kong. Argentina came closer to ending a monthlong standoff with investors over a deal to restructure debt. That may open the way for one of the worlds most notorious borrowers to climb out of its third default in two decades. 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. I am ritika gupta. This is bloomberg. Alix thanks so much. I want to check on where markets ended up in europe. It was ok volume throughout the day, but we ended soggy. The ftse flat. The dax down. 3 . Euro stops barely peeking out any kind of gain. Volume was not terrible. Not a ton of action on this tuesday. This is bloomberg. Alix i am alix steel. This is european close on bloomberg markets. The only one in the room is the title of bloombergs deep dive and what it means to be black on wall street. They spoke with several men and women who tell their own stories, and one of them is crisply, kkrs head of real estate and the americas, who says there is a lot more pressure on people of color to hit the first pitch out of the park. Another Company Making a push for diversity is carlisle. It has achieved 100 diverse board in the u. S. Buyout and its largest fund. Joining us is curtis johnson, carlisle managing director, and bloombergs sonali basak. It is great to get you here. You spoke out for the article. Why now. What would be your message that would be different today than it was a year ago . Curtis thank you for having me on. The number of that has made its way into. [indiscernible] caryle and others can use their platform as an opportunity to expand voices against Racial Injustice and come out publicly on our programs to increase diversity. Weali a lot of the people spoke to for this article have spoken for the first time in their career. What are some of the conversations that are happening around you at carlisle about these protests and about the reality there is not that many people of color in the private Equity Industry . Curtis those conversations we have related to each other on a human perspective. E, we havef with carly said the firm has announced his pick objectives without increasing diversity and developing talent among africanamericans and underserved professionals. Within our firm, we have implemented in inclusion as part of our management and leadership core competency. What that means is my colleagues have a diversity goal as part of their overall objectives and they evaluated on each year. Within our businesses and our department groups, other Department Goals wheat review with them on a quarterly basis are having conversations in small groups and large groups. I thinks folks are reaching out and connecting with each other in ways theyve not done before. Sonali another things a lot of folks are grappling with is what role does everyone around you play . What you tell your white colleagues in terms of how they can be better allies and help progress the bowl of having a more diverse work progress the goal of having a more andrse workplace at carlyle among the companies you acquire . Curtis with white colleagues, it is about having the conversation. It is about sitting with people who do not look like you and getting to know them and better understanding. It is about creating a supportive work environment. One of the things i direct one of the things i do at carly le is codirect we have employees from amsterdam to new york to california. Folks from each of our offices who raise their hand and said they want to be a part of this Multicultural Group and part of our diversity initiative. What that means is folks are willing to get together, and we are talking about men and women, blackandwhite, africanamerican, asian, across the spectrum who are using their voice. This creates a community. We are making it easier for people to have that conversation or put it on the table so folks feel comfortable having that conversation. Alix how you handle accountability, like for people who do not participate or how they deal with it as a manager. What have you set up to protect against that . Curtis accountability is important. We are at a point the industry has now come out and created objectives for itself in terms of increasing diversity. Accountability is the first step. E, we have set up diversity goals as part of our personal objectives so we can hold each other accountable and hold each of our businesses accountable. Weour coceo likes to say, are in the decisionmaking business. Diversity adds to better decisionmaking and diverse teams help to improve that. We are in the business of providing strong returns to our clients and diversity makes sense. We will hold each other to that and make sure we are reaching our goals. Sonali you are in investor relations. You talk to investors all year long. How serious are they . How committed are they to make sure the money is flowing to places that are more diverse . We have seen setbacks over the last couple of years. I am wondering if this is a sincere effort . Curtis what you will find is there has been an ongoing conversation about increasing diversity in the Investment Management business. That voice has gone amplified as a result of this. Work with mostly clients in the institutional space. You are seeing Pension Plans, you are seeing notably demand to have more diversity, but youre asking managers to provide diversity as a part of the investment program. As well as to compete for areness, many Pension Plans asking managers to provide that background. I get it. My money was a retiree from eastman kodak. My motherinlaw is a retiree from new york state teachers. To make sure people managing their money represent their organizations and their beneficiaries. Sonali what do you do with people in the organizations who do not get it but do not mean anything bad . How do you bring them into the conversation in a meaningful way . Curtis theres a lot of research. It talked it starts with communication and conversation. We have to lead by example. Our Senior Leadership team is committed to bringing in diversity and making sure that is an important part of our culture. We will have diverse teams, we can show they have Exceptional Results or results better than less diverse teams. Folks who do not get it will be able to see. I am hopeful that over time and as folks begin to realize, other colleagues in the investment and Management Industry realize the contributions of people of color, minorities, they will realize how beneficial that can be to their teams. Sonali we have time for one more question. You mention everyone at carlyle is setting a goal for diversity. What is your goal . Be as michael is to helpful as i cant my goal is to be as helpful as i can to my colleagues and the firm. The way i can be most impactful to the biggest number of people is by cochairing our multicultural resource group. We are able to get a broad group of people together from different ethnic backgrounds, from different places around the world into one community. One of the things that came out in the article was feeling alone in a large organization, and by creating that sense of community and that support group, we think there is value, we think that helps retention and helps the best out of people we have. That is where i spent much of my time. Alix we appreciate you joining us today. Managinghnson, carlyle director. Sonali basak, thank you for bringing us that story. Another story that caught my eye. The rapper known as killer mike has stepped up for fans to use black wax. Banks. K combined, all of the black owned banks have a fraction of the assets of the biggest lenders. Jp Morgan Branch has 150 billion branches figure than all of one united. There are just 21 black owned banks since the 2008 financial crisis. The combined assets of the bank obviously key, the bigger the black banks can get the more they can land. Key for developing that community. This is bloomberg. Ritika time for the Bloomberg Business flash. A look at some of the biggest stories in the news. Morgan stanley is in the penalty box. The primary dealer french government bonds has been put on hold for three months because of transactions conducted five years ago that affected the liquidity of the market. The banks assigned 24 million over accusation the bank was fined 24 million over accusation date used pump and dump tactics. Morgan stanley has appealed. Hsbc the british bank says it will hire as many as 3000 wealth planners in china within four years. Hsbc makes more than half of its revenue and all of its profit in asia. That is your latest business flash. Alix thanks so much. Here is one other thing. One of our favorite stories. One Hedge Fund Manager is getting inspiration from an unlikely source, the robinhood crowd. Adam sanders volatility hedge fund has climbed 30 this year in part because he is embedding against stocks popular on a retail trading app. Robinhood. We also talked to the ceo there. They wind up trapping which stocks are moving on the robinhood platform as well. He is embracing the speculative fervor brought on by Retail Investors have far less experience and insight, and he can capitalize on it. He did that on tech. Holdings, microsoft, nvidia, apple, those were all up in the first seven months. Paypal rose the most. That doesnt it for me on bloomberg markets. Powerup on balance of the latest on stimulus negotiations. He will spake he will speak with senator rick scott. Tune in tomorrow morning for my interview with the bp ceo. They guy would get some sleep, maybe not. Ands 2 30 a. M. In new york will replay all day. This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio on its is worldwide , welcome to balance of power, where the world of politics meets her world of business. We will start with the markets. Not a lot of movement abigail a little bit of a dull summer day. What people associate with summer trading for stocks. At the open stocks had been down slightly. Looking for direction, we may get that later this week when we have jobless claims. Folks would be looking to see whether or not they move in the wrong direction. The payrolls report on friday. Today small moves. Yesterday desk of the stocks that had been up, microsoft and apple. Microsoft is lower. Some folks considering what a tiktok deal would meet. The day is not goal but silver, our old friend silver is up 4 on the day. Uple up five days in a row, 15 t