Only up a point. The 10year yield at 51 basis points. Jersey talking about a range of 40 and 80 for the next two months. Now that we have broken through 54, he says that was an important level. Ralph lauren, one of the stories of the day. That stock down 6. 25 . Argentina has reached an agreement in principle with a key group of creditors to restructure 65 billion worth of debt, after a third default this century, the ninth overall. Robert koenigsberger, cio of gramercy funds, who had a seat at the table, joins us now. Headlines crossing about half an hour ago saying there was an agreement in principle. Few to us about the last hours, couple of days, how it all materialized. Robert good afternoon and thank you for having me. April, itoke last in seemed like an agreement would be too difficult, that the two sides were too far apart and with hardened positions. Over the past couple of months, obviously, past couple of days, those positions became less hardened, and logic prevailed. Winwinwin. Is a it is good for argentina, its 40 million people, and its creditors. Vonnie you were at the seat at the table as an independent creditor. There were a lot of big players as well, fidelity, blackrock, and some creditor groups. It all came down to you guys and the economy minister. Happened . A letter was sent in july, the economy minister threatened to walk away. How did you come back together again . Robert a lot of what has been reported is process, positions that were communicated by different sides, really, negotiating positions. At the end of the day, there was a separation between positions that creditors had and argentina had, and focused on their common interests. This plan was the best plan for both sides. Those were the discussions that occurred in the waning hours about doing the right thing for all three sides. Vonnie can you give us a value of the deal then . Robert it is really a function of where you are on the curve, would you expect a discount rate. There has been discussion about value based on a discount rate. Andou take an average bond discount that at 10 , then the value should be worth about . 55 on the dollar. More for the short end. Vonnie a little bit less for the long end. Are we talking about a scent or to the difference cent or two in difference . Robert im sorry . Vonnie one cent or two, is that the range . Robert you could have different values in different parts of the curve. It does represent a pretty painful loss for creditors. Many of them were hoping for Something Better than that. ,ow many will come to the table will it reach the threshold necessary . Robert with the agreement in principle that has been reached, how it has been reached on a comprehensive basis with the largest creditors outstanding, there is no doubt the deal will be successful. It will be successful not only to trigger the tax to make sure everyone comes in, but also back to belens successful in the historical perspective. Certainly our relative to the restructuring history of argentina, going back to the 2005 restructuring. Any ideaan you give us of how many of the creditor groups will be on board, who might be the holdouts . We know that there are a range of them. Independent players and larger groups. Suspect all creditors will be on board. Haveexplicitly, they communicated as such in their agreement in principle. Also that notion of holding out what argentina 2020 will demonstrate is, the holdouts of 2005 and 2016 was the outlier, not the norm. Rationally, in a collaborative fashion, the right outcome occurs. The incentives for holding out are just not there. Vonnie can you give us any idea about coupons, the idea that these repayments are still being pushed out . How did that get agreed to . Robert that is important to talk about, what has been achieved in this agreement. It is compliant with the debt Sustainability Framework for argentina and the imf. It provides close to 40 billion of cash relief in 10 years. For the first five years, no whichmortizations, provides an important window for argentina to recover. We know argentina and its economy were struggling precovid. We know that is exponentially worst post covid. Not only reduction in amortizations, but coupons. The average coupon has gone from 7 to about 3. 7 . It provides the longest available financing to argentina today. Indenturese original in place, and provides for obtainable, sustainable, and inclusive growth. It will be an important precedent going forward. Inwe think about default latin america, people often get to the 1980s, which is often called a lost decade. These countries were outside Capital Markets suffering for 10 years because of what occurred. What is interesting here, this got done in three months. It seemed complicated, but it got done in three months. It was a negotiated deal, not in a lateral. It will be an important precedent going forward. Rationally, on a collaborative basis, you can have a preemptive restructuring that prevents a lost decade, that we saw in the 1980s. The most amazing thing, all of this occurred on zoom. Covid has had its economic challenges but also its logistic challenges. To all testament involved that this was able to be done in challenging conditions. Vonnie you are confident that argentina will not be in the same position in five years . Robert i think it has laid the foundation for that. The important next step is an agreement with the imf. That will anchor the economy, reforms. Private creditors have done their part to create the window, the necessary conditions for growth, inclusive growth, obtainable growth, and sustainable growth. Vonnie you also have investments in argentina, private debt, corporate credit. How soon can argentina attract more investors like you, how soon can i go back to the Capital Markets . Robert that is the important thing of a restructuring. Toy are catalysts investment. They catalyze investment in several ways. They give the Country Access to Capital Markets when it wants it. It also provides access to the corporate markets in argentina to the markets when they need it, and it does so at lower interests. This is credit enhancing. It does it at lower rates of interest. It provides for Foreign Direct Investment by lowering the risk free rate. As Interest Rates come down, the cost of equity capital, whether private equity, public equity, the private debt that we do, corporate debt it all benefits from lower Interest Rates. Vonnie you also reached an agreement with ecuador. You had a great two days. How has this changed the landscape for this kind of restructuring . Will there be the same appetite for funds like yours, other , for of distressed funds these countries, if restructuring has changed things forever . Robert i think restructurings have changed for the positive. Ecuador andof argentina, although there was focus on the differences in the process, at the end of the day, both were able to reach reasonable debt restructurings in a reasonable time. That is a win for the country, for the citizens, and bondholders. Beador and argentina will important parts of emerging market investor portfolios. The fact that they were able to execute these preemptive restructurings will be a positive for them and their citizens. Vonnie another round of calls now, you mentioned the imf. You have to get international support. How long will it take to get the imf and other International Bodies on board . Robert again, this was a necessary first step to be able to have a reasonable debt structuring done with bondholders. What argentina needs to do is amend the offer, extend it for a period of time for regulatory purposes. I think theyll be able to close this on the september date. Catalyzeing will several conversations, one with the g7, the paris club, the imf, ultimately, others that they may have. Vonnie really appreciate the time. Congratulations on this next up. We will continue to follow the story, argentinas default story. Robert koenigsberger, thank you. Lets go to the first word news with mark crumpton. Mark a massive explosion at lebanons main port rocked the capital beirut and its suburbs, sending plumes of smoke into the sky. Local television showed the veer damage to several houses and shops new the port of beirut, including the home of the former prime minister. There were no immediate reports of casualties or the cause for the explosion. Ias wasne isa downgraded to a Tropical Storm as it moved inland. It prompted Tropical Storm warnings all the way from new york to maine. The storm does not pose a threat to any Major Oil Refineries or platforms. With the talks in writing on after a week of negotiations, the white house and Congressional Democrats have theyed their first hint are getting somewhere on a virus relief package. Steven mnuchin says they made a little bit of progress last night. House Speaker Nancy Pelosi says they need to work together. The major Sticking Points are unemployment and state funding. Florida is reporting another spike in coronavirus deaths. The pastdians died in 24 hours, the third highest total since the outbreak began. Florida has nearly 500,000 cases of covid19, and the states Positivity Rate ticked up again to 10. 9 . Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Diageo reporting a slowdown in sales as a result of the lock down. Thathe ceo is optimistic Home Delivery and increasing consumer demand will help boost the companys bottom line. We spoke with him earlier. The two things Consumers Want most coming up to a lockdown and these conditions were meeting up with family and friends and going out to a bar or festival. , pub or that human motivation we believe will endure. As conditions improve, condition consumers will go right back in. What were doing in the meantime is creating the experiences at home. One of the trends that you have seen it is cooking from scratch and baking. Moved rights, we into that space on social media and digital engagement. We have seen a very good response in markets like china and the united states, where baileys is doing better. Johnny walker, we have a program called kitchen sink drinks. You look at what ingredients you have in your home, and design cocktail that you can make at home. There is a huge desire to get quality cocktails at home. In terms of consumption, we have seen per capita consumption come down for some time. We very much stand for drinking in moderation, drinking sensibly. You have seen the ship from out of home to inhome. That in a market like the u. K. , where 40 of the business is out of home, that has collapsed. Inhome consumption has picked up, but total consumption is down about 20 . It is not true that the overall populations are drinking more. You are seeing the ship from out of home to inhome. What we are encouraged about are the trends toward premiumization. 50 bottles of tequila growing double digits right now. That trend is also interesting, particularly in the uniteds dates. It is your margins that investors have really appreciated. I wonder if they can expect a boost in revenue with those big to really help in the second half for fiscal 2021 . Assume, aeing, i 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 you expect in a Sales Recovery . Was everst quarter weakest quarter because it had the biggest impact on the lockdowns around the world. We are seeing sequential improvement, even month to month. As we look for the next couple of quarters, we expect things to get better each quarter. To your point, in china, every day, every week is getting better. On premise is reopening. We are seeing consumption pickup. The same happens in the u. K. , opened a few weeks ago. We are seeing a steady recovery. Foot traffic is about 70 of normal. The beer business was about 70 of normal. We expect that to improve. Clearly, it is based on the conditions of the virus and Government Policies that will also impact it. Overall, across the world, we expect sequential improvements. Ceoie that was the diageo speaking earlier. Still ahead, we will speak with Dwayne Edwards about how he is staying one step ahead of changing consumer behavior, adjusting to a covid19 world. This is bloomberg. Vonnie this is bloomberg markets. Im amanda lang in toronto. Change is a in the shoe business sector grapples with changing consumer behaviors as a result of the coronavirus. Focused onards is making strides in diversity. Of pensoleounder footwear design academy. He joins us now from portland, oregon. Thank you so much for joining. Another reminder today of the difficulties in retail. Ralph lauren down 7 in the market. Pressure every which way you look. What is the message you gave today at the Virtual Summit that you held . What were people saying . Dwayne the conversation today is really about how we can look at diversity and inclusion, as a way to be a part of their business. In order for it to succeed, not ement, in ecb integrated into the way these companies do business. Once they do that, they will see a Greater Consumer acceptance, seat Greater Consumer loyalty see Greater Consumer loyalty, and they will see that kind of innovation that we can bring to an organization. Mean, what does it living values, as opposed to promoting values . At the end of the day, it is consumer preference. Companies need to put their money where their mouth is and ,ire a diverse slate of workers but also cater to consumer demands. How can both get done at the same time . Dwayne it is not only those two things, but at the same time, empowering these communities, consumers, that value. Right now, the conversation is really only one sided, to buy a product. Tosoon as the brands move investing in these communities, they will see increased brand loyalty. Our Consumers Want to be treated more than just consumers. There are several brands that have athletes, entertainers as the focal point of their business to entice consumers to purchase their products, but as we have seen through covid, we really want to be heard, we want to be seen, more than just a commodity. Someone who can buy a product. How our retail footwear covid . Doing during we see apparel makers having a tough time. Dwayne it is going to be a difficult time for a little while because of the backup of inventory that has been pretty much stagnant since covid. In a sneakerg market, demand is still high. Those limited releases, kids are Still Standing in line to pick up those latest drops. Market of the sneaker culture has slowed down from a covid perspective, but the momentum has not died down too much in respect to those limited releases. Dwayne edwards of pensole academy, thank you for joining. Stay tuned. We will take a deep dive in the markets next. Amanda lang will join me next from toronto. This is bloomberg. Mark i am mark crumpton. President trump says he never met john lewis. Lewiss civilsu rights to explain what he did not attend the Memorial Service for the democrat. In an interview, President Trump said, he did not come to my inauguration and he did not come to my state of the union speeches. The president added, nobody has done more for black americans than i have. Pressed on whether he found lewiss life story impressive, mr. Trump said, i cant say one way or another the other. Regulators look into a small Group Investors of investors who get rich when oil took an unprecedented drop on april 20 when oil settled at 37. It was the first time crude oil ever dropped into negative territory. Capitalirm called vega london made as much as 500 million that day. Regulators and the u. K. And u. S. Are trying to see if any rules were broken. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Amanda live from toronto, i am amanda lange. Vonnie i am vonnie quinn. We are joined by bloomberg and cnn bloomberg audiences. Break in the stalemate. Heading to another round of negotiations after perley making some progress in the last talks. Googles fitbit deal is probed. The takeover is under investigation amid concerns it could strengthen googles power in online advertising. Mouses housethe after the bell. Business betreaming enough to stave off pain from the theme park closures. Amanda . Amanda we are seeing a lot of momentum for stocks. In part that could be because much of the attention is on washington and the questions around when or if or what the stimulus package might look like. We are seeing the broad s p 500 now in positive territory. Energyn negative today is a source of strength across the market. You can see the nasdaq giving us a bit of positive action. It has been negative in the session. Among the big leaders, it is a mixed picture. Microsoft lower on the tiktok speculation. Check out the price of gold. The stock price above 2000 for the first time. Gold seeming to move on the stimulus talks. We are watching that pretty closely. As is the full of america watching to see whether nancy pelosi and Steve Mnuchin and their sides can come together, particularly for the and extended break the senate embarq some beginning on friday. s at renaissance micro research. Lets start with the level of optimism you have. Negotiations. Words are spoken about the quality of the other sides position. Both must understand the seriousness of not coming to some agreement this week. Steve i would agree with that. I think you are seeing positive signals in statements now compared to last week. Both sides acknowledging some progress. The fact they continue to talk is better than not talking. I dont think there is really a risk either side wants to leave washington without a deal. I think, kratz democrats the time on their side. I dont think they want to risk overplaying their hand. They are probably on the glide path to electoral gains and that could shift if they are viewed as over politicizing the situation here. Politicizing the situation here. Potentially there if it notices. I dont think republicans can really afford to leave town without a deal either. I think the situation for Mitch Mcconnell his math is more complicated. You have 20 or so senators who are probably discovering their fiscal conservatism and worried about a potential primary challenge from the right. Mcconnell himself is. Up others are up as well. He will try to work to find a deal to provide aid and get this thing resolved. Can thewhat democrats live with . They are putting up a strong front now and they have plenty of things on their list they will not live without. If it came down to it, what would be the redline they could not accept . Steve i think democrats are clear they need additional aid for states. They will probably get that. I dont think it is likely to be the 1 trillion they are asking for. They did include 150 billion in the last cares package. It should not be too difficult for republicans to come up with some amount, i would think. I think democrats are clear they want a higher amount of on employment insurance benefits. More than the 200 republicans are putting out there. It shows willingness to discuss the a little under 600 amount. A Sticking Point last night was pay for education. Republicans, they both want to provide eight but there are questions around restrictions on that. I suspect there is opportunity for negotiation there. I think they will ultimately reach a deal. I think my prediction moving forward is around 1. 5 trillion. I suspect it will increase. Mcconnell looks to get votes from Senate Democrats who will demand more money. He will lose republicans. That is why i see the package probably going a little higher. Devil make democrats feel more inclined to support it. If you get a majority of democrats on board, that should make pelosis job easier in the house when it comes over to her. Amanda this question of a temporary extension on the 600 checks is also a political one, right . Both sides are posturing on signing on the dotted line on that idea. Steve i think Mitch Mcconnell in the senate is looking to score political points there by putting democrats on the record for opposing temporary extension. I think democrats probably know if they were to do that it might weaken their negotiating position. It makes it easier to make compromises in other areas and increasing their negotiating leverage. Right now democrats have been hammering away at republicans, saying their inability to pass a deal in the senate is why people are going without their on Employment Benefits and why they face eviction notices. That is a political move by mcconnell. Hopefully it will accelerate the conversation. I think mcconnell is an important one to watch here. You have secretary mnuchin, chief of staff mark meadows leading negotiations. If mcconnell is brought on board, that is a signal we are towards the beginning of the end. That is something to keep an eye out for. Vonnie lets talk about tiktok for a moment. What is the situation with tiktok . Can the president really arrange almost a bankers fee for doing a deal between microsoft and tiktok, assuming some other company does not try to swoop in . Steve that is a little unprecedented, at least in my experience. I think there are grounds for some legitimate National Security concerns. The administration forced a grindr investiture of earlier in the year. This is not all that dissimilar from that. In terms of the u. S. Receiving compensation, it has not been defined. There might be another way or flexibility as to how they want to define that. I think it is the signal of a broader trend, the u. S. And china moving towards a greater decoupling in the technology area. That will make it difficult for companies and countries to choose between one of the other. Given the level of bipartisan support, i dont expect a potential Biden Administration would take much different approach to National Security concerns with respect to technology. It is a reminder that one thing this president is a master at is the redirection of the storyline out there, and perhaps wanting to turn the attention away from whats happening on the covid19 front. Should we fear between now and november there might be some rather strange move made, especially where china is concerned to change the channel . Now the do think right phase one trade deal has probably taken on greater importance. That is one of the last things we see keeping the existing communications between the two sides to maintaining that at the moment. The election is still a ways away, three months. I think President Trump is in a similar position at the end of september, beginning october of october in terms of the polls that might be the only lever left, walking away from the trade deal. That would be pretty disastrous for markets in a lot of ways. I dont think that is likely at the moment but that is probably horizon ining on the the ultimate landscape. Ther thing to keep in an eye on is the south china sea. The u. S. Is increasing operations there, china as well. When you have a lot of young men they are serving in their respective militaries, it only takes one person to make a mistake. I dont think either side can afford till walk away and look weak in front of their potential domestic audiences. There is a lot of potential there as well. Vonnie steve, pleasure speaking with you today. Steve pavlick. One headline. The line to kkr has been suspended in italy. State involvement happening around the world these days. Telecom italia suspending sales. Fitbit, acquisition of we will have details. This is bloomberg. Vonnie this is bloomberg markets. Union ready to battle half a bit concerns. This time by blocking thereby out of fitbit. Here is scarlet fu with a look. Scarlet this was supposed to be the day that the approved or did not approve the purchase of fitbit. They will launch an investigation and look into how the deal increases googles data advantage. The regulators worry that by buying fitbit, google now has access to all the health and fitness data it collects. Walk, run, preexisting conditions. That will feed into googles online ad business. They went to make sure it does not reduce competition. If you look at the share prices of fitbit and google, it is not really moving today. A lot of this was priced in. There were reports in july google was meeting with eu regulators to allay some of these concerns. In the united states, the government is investigating google for antitrust violations, or alleged antitrust violations. Privacy groups have been calling on regulators to do more after the approved facebooks purchases of instagram and whatsapp in the past. Wasles bid at the time 7. 35 per share. Currently trading below that price. We are not looking for much growth from fitbit. The growth came in the first half of 2019. Since then it has been slowing and expected to slow even further. Fitbit will reporting secondquarter results tomorrow after the close. Amanda . Lots ofas you note, focus on this issue in the u. S. What are some of googles arguments . Scarlet what google is saying is this is a deal about devices and not data. Looking at the hardware part of the equation, fitbit has 6 market share of the wearable space. Apple is the Market Leader at about 36 . Google points out the Different Companies that have different devices and says we dont have those kind of devices specifically. Google says it will support the ability of other products to use its android operating system. Bottom line here is that it will probably have to do more. There are reports that google offered not to use Fitbit Health data for advertising purposes. It will house it separately. The question is do you believe that . We have heard that from big tech in the past and sometimes they backtrack and pay a fine. Given how much money they have on the Balance Sheet that does not work out to a lot. Amanda scarlet fu, thank you for that. We are effected to hear from disney when it reports after the bell. What to expect . We will check in with tim nollen after this. Amanda welcome back. We are looking for disney to report its earnings after the bell today. What is expected to be a challenging quarter given the shuttering of theme parks and the delays in the release of films. What should we be watching for . Tim nollen, thank you for being with us. Lets start with the headline. You have outperform and a 140 target on disney. What are you looking for in this quarter . Tim we know it will be a tough quarter. I think treat it as a loss. The parks will be done nearly 100 . Film box office will also be done nearly 100 . Some of that will be protected by other elements of the film studio business. Advertising will be down. It is tough on the network side, some 30 for cable and broadcast. Corner is thehe disney plus and the hulu business. Toare looking for etc generate about 3 billion of revenue. That is not dtc plus international. Ast incorporates disney plus much as 60 million or more subscribers. Did 54 54 mil it million by may. Espn plus at eight million to 9 million. Hulu at about 34 or 35 million subs. We are looking to a strong direct consumer numbers to help the stock here. Vonnie investors will be willing to overlook some of the theme parks, especially now that disney is putting in place a plan to try to reopen some of the theme parks safely. Will the Different Streaming Services have to keep up subscriber growth quarter over quarter over quarter like the other services to keep investors happy . Tim it is practically impossible for us to forecast numbers. I just gave some numbers we are looking for in coming quarter. Guidance for the service that began in november in the u. S. , up 60 to 90 million subscribers for disney plus globally in five years. We have been hitting the low end of that already less than a year in. That is based on numbers they have given us thus far. I think it is achievable. The interesting thing is disney is less and less a Traditional Media Company and more a direct to consumer streaming service. Its a tech company, a streaming service. As we have seen with a lot of its peers, just putting up good streaming numbers, just subscriber numbers can support the stock. Revenues and earnings are still moving on this thing. Dont actually support the overall fixture. Overall picture. Amanda lets talk about bright spots. But assuming investors can carve out or set aside what is expected to be the operating losses from theme parks, that will take them to a loss. If we are looking those high gross places like streaming, his expectation of potential for a surprise on the upside . Something to have investors look past the real struggles they are having in some parts of the business . Tim the way to answer your previous question might be this one. If they can beat whatever the expectations are for subscriber numbers, i think that will help. I dont know if there is an expectation out there. We chose 60 million for disney plus based on the 54 they have done already. It could be a low number if they blow through that as they have blown through all previous numbers. We have seen other Services Launch to less fanfare. And less success. If disney can put up strong growth a lot of this is international. International launches coming on the back of the u. S. Launch. There is a lot of really upside here. How long will investors be able to overlook the closure of the theme parks . A couple of them are open to some extent but they may have to close again at some point. Tim it is difficult, yeah. Our way of thinking about this has been, and we last published on disney about six weeks ago heading into this quarter, but our thinking has been a return to attendance with parks reopening and capacity ceilings get a lifted and getting back to more more normalized park attendance in the next year, that seems much more at risk right now with parks reclosing. Capacity numbers are remitting low at the parks that are open remaining low at the parks that are open. I justlike florida, think it will take a long time to get back to normal. How long will people give disney the benefit of the doubt . I dont know. If they say on the call double take longer than expected to open and we can look for losses in the next year or whatever they might say, that is certainly a possible downer. Just in terms of how wellcapitalized the business foreseenve a complete shutdown of this business. How long before they open . Tim i dont know how many quarters they can go. They did some refinancing early on in april. The leverage ratio was quite low, even after the fox acquisition was closed a year ago. I dont have the answer but i think you have several quarters before you need to worry. I do assume you have some advertising that comes back on the media site, particularly with the sports coming back. Fortunately, i believe the nba bubble which is at disneys complex in orlando has seen few if any covid cases amongst players and staff. If you can get a full remainder of the nba season and playoffs, thats a very positive vonnie we have to go. That is tim nollen a macquarrie capital. Thank you. Caroline this is bloomberg markets. Investorsfluctuate as as lawmakers pass another relief package. Gold is another intraday record. Tiktok tussle. China fires back at president ismp, calling his demand smash and grab. Callsosoft board member microsoft the perfect home for it. Details are ahead. Disney reports thirdquarter earnings after the bell, giving investors a at how bad the fallout has been for its theme park businesses. All that and more coming up in these fun filled times, romaine. Remember the toys that look like eggs and you push them and