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And you look at the spread, the number is enormous the spread is a norm us. Gauge fromccurate the payrolls number, i would expect is difficult. That politicians hopefully get close to a decision. These are the markets and the european markets are down today 1 and the ftse is down more and one reason why is the pound is up. At 131. 1. 31. 1 10 p 500 is only down by of 1 . Andhe bond market is 53 54 in germany. Next hour, we will get back to the bank of england story and get some insight into the fitness sector. How is coping with the reopening rules we are seeing. The ceo of Planet Fitness will be joining us. Going back to the gym is a tough thing to do now. Alix are you a gym rat . Ive tried it but its never worked out for me to stop i live in a nice area where you can go Mountain Biking in the hills. I have a very steep hill near me and thats my exercise regime and running around after my children which provides a great deal of exercise. Alix fair enough. Andrew bailey talked to Francine Lacqua earlier and heres what he had to say. The things weve looked at as easing,e, quantitative potential use of negative rates and forward guidance. Francine so controls have not been discussed . We do discuss it. Prefer to look at quantitative easing in that respect. I would make the point that we will go on looking at everything, nothing is fixed forever but its not in our planning at the moment. Francine what would it take for you to go into that . Weve talked a lot to Central Banks. Out,have gone in, come gone in and not yet come out, very helpful and fascinating conversations on the work they have done. Territory,into this there is much bigger interaction with the structure of your Financial System and the structure of your Banking System in particular. Has benefited from negative positive rates negative interest rates. The biggest share of deposits, the more attenuated the effective negative rates will be. We have our share of retail deposits in the Banking System. Conclude, looking at the experience of other Central Banks, is that the effective negative rates depends at what point in the cycle you use them. Would you see yourself using negative raise rates post covid . I dont know because we are not facing that situation today. True that when you look at the experience of other , they appear to have work more effectively in the recovery phase. Qualify that ar, bit by saying i think there is a tricky identification issue as to what extent the negative rates are driving the recovery of the Banking System and the lifting of the release of provisions and therefore the ability to lend and to what extent that wouldve happened anyway. Its a rather tricky issue in that respect. Is there but its hard to identify. Francine its not something you would rule out, it could happen . The message we are giving today is they are in the box. There are other Central Banks that say they are not in the box because their Financial Systems have Different Properties and they draw different conclusions. Are not the box and we considering using them at the moment. The bank of england governor speaking earlier today. Us is the bank of america u. K. Chief economist. I will take a phrase from Boris Johnson in the u. K. In involves having your cake and eating it. Does Andrew Bailey want to have his cake and eat it . Is he happy that the market is pricing positive rates because that would have a positive effect on the economy in his mind but he probably is in the position where he doesnt actually want to deliver . Yes, is the short answer. [indiscernible] you get it by getting the markets and cross negative rates. You cannot forever have your cake and eat it. Eventually it will not be there to eat it. To deliverave negative rates at some point if necessary. I think that point is approaching. [indiscernible] will see Andrew Bailey talking more today. [indiscernible] the report today had a vshaped recovery and was consistent as they talk about tightening policy. [indiscernible] its completely inconsistent with having your cake and eating it on negative rates. The other conclusion from the bank of england today is yes, but no. They are saying one thing and another thing so its unclear where they really stand. Alix i was very confused by the different signals i got from the boe so it sounds like i wasnt alone. What i found interesting was some of the response and the investment community. Earlier about the u. K. That there is little likelihood of nearterm inflation but once you look further into the coordination of Monetary Policy we have seen and a blurring of the boundaries, it could bring about upside potential risk globally. The u. K. Has been the prime example of the coordination between monetary and fiscal policy. How do you see that playing out . I think the opposite risk is the key. We have had a lot of coordination and easing at the same time, they are talking now about tightening at the same time. They are also talking about easing so there is a slight confusion. Today showseport inflation above target in two years time with positive rates. At the same time, you have the chancellor quite rapidly talking about fiscal supports of the economy. It could be something dramatically smaller and less effective. Terms, the more you do it together, the more effective it will be. To me, despite the confusing message today, it seems to me that the bank of england is setting itself up for disappointment with its forecast. It has put negative rates firmly on the table. It doesnt really have any other in ammunition to cut rates given where the market is priced. Although they are talking about shaped recovery, doesnt really change anything. Its no surprise that everyone is focused on negative rates. [indiscernible] they have put themselves further behind the curve. Is currentlyet predicting 10 bits by march. You think it will be by yearend . Yes, the bank of england has an 18 increase in the third quarter, nine in june alone. It may be gives back to people catching up on some of the spending they missed as some of it is rebounding. It might exaggerate where they will be at year end. We can always forecast whale where they will be. My own proprietary conference worst of tells us the the last four weeks has come down. Expectations have peaked again so yeah, we will probably get good news for the next month or two as the effective lockdown easing comes through with hard data. We heard that, its a hard slog for the u. K. Economy. Unemployment will be going up. I think it will be harder and harder for the bank of england to maintain this u shaped recovery story alix alix . Its good to catch up, thanks a lot. With the, we will talk ceo of an economy developing new technology to purify air. The chief executive of schip ensure will join us next. Sure the and chief economist of schip and sure environmental will join us on theets check in bloomberg first word news. Ritika there is a sign the u. S. Labor market may be improving. Applications for Unemployment Benefits fell more than expected last week to the lowest since the pandemic started. Initial jobless claims declined isabout 1. 2 million which 200,000 less than the median forecast. Claims are over one million on a weekly basis on the job market is a long way to go to recover. The white house and Congressional Democrats are running up against a selfimposed friday deadline. They have promised to strike a deal by then on a new virus far,y package but so little they have been able to differences. Mental white house chief of staff mark meadows warns that if there is no compromise in, President Trump could move to restore supplement of jobless claims in a moratorium on addictions. In germany, the number of new coronavirus cases were the highest in more than three months. Daily infections climbed above 1000 for the First Time Since the middle of june. There were almost 1300 new cases in the 24 hours through this morning. At the peak in march and april, germany was recording almost 7000 cases per day. Global news, 24 hours a day come on air and on bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Alix thanks so much. Lets get the latest on the virus. One company is now introducing new technology to combat covid19 fears in the air we breathe. The ship andw is shore environmental ceo. They install air capture control systems. What are you making that will help make it safer for kids to go back to school and people to go back to work . Thank you for having me on, its a pleasure to share our technology with you. I would like to take a minute to perhaps give you a brief history as to what the company does and has been doing for over 20 years. Environmental specializes in providing air pollution control systems for removingndustries, emissions and volatile organic compounds from any processing facility. We have been hard at work trying to provide services as well as equipment for essential businesses to stay open and alive, to make sure they are providing all the packaging, all of the material that they need to be out there to continue with food processors, pharmaceuticals, packages and so on. As a result of being involved with Clean Air Technology over realized thathave we have always had access to oxygention of activated or some call it ozone. It has come to the forefront of our technology to repurpose it in the airduce systems, the hvac systems with a return air which is about 80 of the air thats being recycled. Through this process, we are free ofbring clean air any pollutants, free of potentialviruses, any germs and bacteria. How does this work . How does it compare with other systems . We have spoken to a bunch of companies the last few weeks and some are using uv lights and some are using chemicals like chlorine and some are using huge volumes of air. Why does introducing ozone and splitting off the extra oxygen atom and using that to fight coronavirus, why does that work best . One of the main interests we had in introducing the ozone was the residual you will have with respect to using any chemicals. Any time you use chemicals in tryr to clean surfaces or youlean a body of air, basically are leaving chemicals behind somehow. Unless you were to go back in and remove the chemicals. Uv light is very localized. If you are holding a uv light or it apparatus that produces in that small space, its extremely localized and it has to be held over the object or the surface and it does not clean the air in which you breathe. Ozonetilization of through proper design with sensors and analyzers, while people are in that environment, you cannot introduce [indiscernible] ozone. Ity of with returnedat air, the recycled air through any hvac system, you make sure goes fromothing that one person to another or from one area of the building to the other. Alix you do business throughout the world, what is the takeup of this . We do have manufacturing facilities in china and we do work in thailand as well as other parts of the world and they have all been very excited about what we have proposed what we have designed to the point that we want to make sure we try to have systems installed here and eventually be able to share the technology with some of our companies and other parts of the world. Focus , most of the yes . Guy can you see this becoming a bigger part of your business than it was before . The business previously was very much focused on the pollution front. Do you think this new side of the business of making air clean and virus and bacteria free becomes a bigger part of the even eclipsing your plans for pollution . I believe we will stay with our core business because that is still the mission of the company, to make sure we provide clean air for the world as much as we can, removing it from all industrial facilities. However, i believe this particular product line has many applications. It is already being used in the cruise industry. It is being used in other businesses to make sure the contaminations are removed. Therefore, i believe this will give us an opportunity to have growth on the other of the business which we have started as ship and shore technology, introducing new technology that would become our new future are getting back to some sort of normalcy in order to feel more comfortable in enclosed rooms, arenas, schools, concert halls and environments in which we fear we maybe catching something. We need to get back to being together again not necessarily fearful of what the next person is sending to us. Will be apect this conversation we will have with our guest from Planet Fitness later. Thank you very much. Environmental ceo, thank you very much indeed. Microsoft is chasing a deal to s globalof tiktok business and we are seeing rocket who we talked to earlier, the ceo there, that stock has just opened at 18 and the ipo went out the door which was reduced from the 22 people were originally talking about. We will have more on that a little later on. This is bloomberg. Opened at an ipo price of 18. It priced at 18 so that was a decent price but they cut it late last night so it seems that was right on the money. You just spoke to the ceo and you were trying to make the distinction between being a Technology Company versus being a mortgage company. And what that means for evaluation. A longterm its growth trajectory and how you think about a business. You think about the tech sector and the Growth Potential there, you price that in a different way then you price may be a financial company. While they rely on technology, every company these days pretty much relies on technology, every company is a tech company in some way, shape or form. Maybe the market is taking a different view on that. The european close is coming up next, details in a moment, this is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Puts its customers a wiin charge . Rier well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Guy 30 seconds until the end of regular trading in europe. A thursday in august. Volume is tremendously light. That is to be expected. European stocks edging lower. It is any eclectic picture when it comes to the stock sectors. We are seeing miners under pressure. We are certainly lower. The stoxx 600 down. 7 . The london market down more. There is a conflagration of factors driving this. Glencore one of those. You also have a slightly stronger pound. Down 1. 2derperforming, percent. The dax faring better, only down. 4 . In terms of the sector story, it is interesting. Basic resources, i mentioned what is happening with glencore down 2. 4 . I will show you the stock prices. Telcos are down. You get to the defense of names, food and beverage down 1. 12 . Media and travel and leisure the only sectors outperforming today. We are certainly seeing some of the airlines coming under a little bit of pressure today in terms of what is driving the travel and leisure sector. You have gdc holding, carnival trading higher, a mix. 3. 7 . Down airbussitive news from on delivery, which is worth paying attention to. I mentioned glencore. The market not taking kindly to whichand other results of when core has traded down 7. 46 . Back faster than anticipated in terms of demand, and i mentioned what is happening in the media sector. Idb trading positively. It cut its outlook and said the Advertising Market is as bad as it has ever seen it. The worst Advertising Market itv has ever seen. Nevertheless, stocks trading up to. 20 . It couldve have been worse. Alix we love to say that. It could have been worse. We want to get the biggest takeaways from the European Bank earnings. Joining us on the phone is Bloomberg Opinion columnist elisa martinuzzi. What was your biggest take away . I am struck by the difference of how much money we have seen set aside by u. S. Banks with bad loans versus European Banks. One of the takeaways is provision levels have looked very different country to country and bank to bank within those countries. There in mind each lender will have a different customer base, a different geographic mix. This is a little bit harsh to draw comparisons. What i think you will find is the u. K. Banks were quite ,ggressive in the provisioning and that probably reflects a harsh Economic Outlook the u. K. Is preparing for. That is manifesting itself in the shale price if you look at the u. K. Banks trading at the lowest since 1992 on the back of those dire economic expectations. The expectations are pretty bad. Ways, if you are an investor in these businesses, is the worst behind us . Elisa that would be the optimistic outlook. Bear in mind you had a first half that was quite exceptional because notwithstanding the dire Economic Outlook, the trading businesses across firms in the u. S. And europe has held up and done phenomenally well. That is unlikely to repeat itself in the second half. You will have revenue being squeezed and at the same time you have the economic reality coming to roost. You will have the downturn of gdp. Have, in some countries, generous government and centralbank support plans coming to an end. For the u. K. , ending at the end of october. Not sure how many jobs are going to sustain afterwards. A lot of uncertainty lies ahead and i think most executives would have shared that uncertain outlook. We will leave it there. Thank you march thank you very much indeed. Elisa martinuzzi from Bloomberg Opinion. One bank that did report numbers was ing. Shares rising. Signal the dutch bank the worst of its bad loan playing may be over. Earlier we spoke to the cfo. , we haveking at q2 based it on a certain economic scenario, and in our case it ofys on a reduction in gdp intond a recovery of 5. 5 2021. On that basis, i think if that situation transpired, we expect the loan loss provisioning will be lower in q2 in the second half of the year compared to the first half. Lets put some context around this. The market wants to know. Youve gone from a 42 basis point provisioning in q1, i think you confirm to me the equivalent of 80 basis points here. This is a dramatic either deterioration, or reassessment of your portfolio. Which is it . You are nowhere ahead of your peers in terms of the deterioration. Is it that the assets for deteriorating more quickly than you thought, or are you being more aggressive in your assumptions . Good questions. If you look at our assumptions, basically there is an element of frontloading on loan loss provisions, even when the actual loss appears, and in the 1. 3 billion euros, approximately 400 million euros, basically reflected in the Macro Economic slow down you see without the actual loan loss being visible in our numbers. Having said that, if you look at our nonperforming loan ratio, it is quite low at 1. 6 , which compares quite favorably compared to our european peers. You sayat point, would your loan book resilient is better than your peers, and why is that . There is no reason to think you have safer loans than other lenders, for example. Probably in two parts. If you look at our loan book, almost 40 of our loan book is in mortgages, and those mortgage portfolios are predominantly in the northern part of europe. In the netherlands, belgium, and germany where the performance and the economy are relatively strong. Exposureuite limited to the more sensitive parts, for example our portfolio with respect airlines is quite modest. Our exposure to hospitality is also modest. The last point to make about our Loan Portfolio is we find a diversified group with lending not concentrated in any particular sector except in mortgage areas, which we need to be which we deem to be quite safe. Cfo a little bit earlier on. Ing has exposure to wirecard. Wirecards spectacular collapse is leaving a gaping hole in some of the income statements from the European Banks. Ing took a hit of around 175 billion euros on the failed german fintech. Joining us to give us a take on the impact the wirecard failure is having on the European Banking sector is steve rx joining us out of frankfurt. Ing taking a big hit. Commerzbank taking a big hit. Who is next. Steve abn amro is another dutch bank. There were 50 banks altogether that work evolve that were involved in the Revolving Credit Facility to wirecard. 90 was drawn at the time the company went insolvent. The biggest lenders are ing, commerzbank, avn, and then a german lender that is not publicly traded. Banksuld be one of the that see another important hit. Alix is it over . Every single day i am reading a new unbelievable report about something with wirecard. How sure are we this is the worst it will get for exposure for these banks . Steven totally true. Every day seems to bring a new development in that stunning case. I think for the banks, the Second Quarter impact is the worst. Most of them were only exposed to that Revolving Credit Facility, and most of the banks wipe off the entire exposure. They seem to have passed everything into the Second Quarter, and therefore i do not think the banks will necessarily see much more come out. There is another twist on the story as well, and that is wirecard faang, which is a deposit taker. Presumably there is some value there. Any of these institutions interested in picking that value up . Steven interestingly, deutsche is a company exploring the idea. The ceo, and a recent bloomberg event, we asked him if he is still intending to do that. He did not answer the question. He said every m a transaction faces big hurdles, but he did not deny it. Reported 17 potential bidders. They are looking at this now. Not the bank, wirecard the company. People will be careful what they by. The bank itself is still operating. People say it is an attractive asset. Something interesting could happen. Alix do banks need to rethink the risk profile and how they value it . Steven i think so. That is the process everyone is going through. There is a blame game going on between the institutions involved in supervising wirecard, they are all thinking about how to boost comment of course the banks. To have bank managed much of the exposure, which is by why we did see a wirecard impact. An unusual twist, but it could happen. Guy sometimes they do. Steve, we appreciate your reporting and joining us on the program. Steven arons joining us out of germany in terms of what is happening with that wirecard impact in this round of reporting from the European Banks. European banks in focus. A lot of Companies Reporting numbers. Through the auction process. A little dip lower. In terms of the numbers you see taking areen, miners hit, Oil Companies taking a hit, london underperforming. The big story out of england, the bank of england we will talk about that and much more as we talk about the stimulus story out of the states. We will talk about that on the how. Show the cable s on dab digital radio. Jonathan ferro is a new york, i will be joining him in london. This is bloomberg. Alix live from new york, i am alix steel. Guy johnson in london. Time for the stock of the hour. Adidas. Scarlet fu has more on the footwear company. I was saying on the break, we are in new york, can we say adidas. Adidas, son dmc says i will go with run dmc. The stock was rising as much as 4. 3 , at one point rising to a two month high. The Second Quarter reflected the worst of the pandemic. In april adidas closed seven out of 10 stores globally, but now nine out of 10 stores are open. The topline communion coming in better than expected. Ecommerce the start. Line, prophets missed because of covid related charges. The company says it will turn operating profit this quarter but will not commit anything longerterm. For the full year it will not give a forecast great it is not clear about the pace of shopping in stores that have reopened. Your customers are coming in, but most of them that are coming in are buying. What is selling . Yoga, running deer, slides the slippers my kids where to hockey practice. Where is it selling . ,hina is flat for the period but double digit in may and june. It made up of the lackluster performance in april. North america and europe saw a decline of 40 . Latin america the worst hit, but also the smallest part of the business. The company did leave the door open to issuing bonds. If it does have the capital market, it will do so from a better position. Adidassnd s p rating credit rating. Adidas has no outstanding debt. Alix good take. Slippers, make sense. The new work from home office where. From workout apparel to work out locations. Jims across the world reopening with new capacity and sanitation protocols. Joining me is chris rondeau, ceo of Planet Fitness. It has locations across 46 states, the district of columbia, canada, and australia. Guy is not so much into the gym. I am very much wanting to go back to the gym. What is it going to look like if im able to go back . Chris thanks for having me on. We have 1400 stores open out of 2000 and love 30 million workouts in two months. Zero cases confirmed. We are tracking the virus in our facilities. It is safe. , wee are clean stations have touchless checkin all the way in. I happen to work out this morning in my local planet, and once you get in the door you feel safe. Like going to the grocery store. Probably safer. Guy how does it change the longterm way you position your business . ,as it accelerated some trends has it changed the way the consumers are coming in, how much time they are spending the gym, what you are doing in the gym, it must be having some effect . Chris i see a couple of things. When i think we need to position ourselves as an integral part of the health care distribution. We keep people healthy. We reduce obesity, Heart Disease , all of the things the virus has affected preexisting conditions, part of the solution. We launched Facebook Live workouts for all the members and nonmembers. Put a lot of content on our app. Our content consumption went up over 200 overnight. A lot of folks on the digital front keep our members active. Facilities, we have every other piece of cardio inoperable. It forces social distancing. Our facilities are big. 20,000 square feet. All of the weight equipment is spread out. Other than that, you are not see much of a difference. Alix Planet Fitness, i think of it as a no fuss workout, you go in, you do your thing, and you leave. I wonder how that has to change when youre dealing with sanitation and showers. How much of you had to put in moneywise to fixing your jams to make them more accessible and safer . Chris chris at planet we to cleanliness as one of our top priorities. We clean with sanitation products approved by the Health Department to kill the virus. All of our staff is wearing ppe. The solutions we have had with paper towels to clean the facility, and members are required to clean the machines before and after each use. You and not see too much difference, except for the fact the members are adamant about cleaning. Today they were particular about the way they clean and the machine ready for the next person to use it. It is not cost much more to run the facility different at this point. It does not cost much more to run the facility different at this point. Guy one thing that is happening as we are getting a lot of stop starts. This is true of a lot of businesses as well. We are seeing localized changes in the rules, and you must have to adhere to that. How are you managing that kind of volatility, not only in terms of staffing, but cash flow and all of the other aspects you have to keep an ion . Eye on. Have to keep ian we have groupsly of veteran franchisees. We have 135 franchise groups that make up our 2000 systems. Most of our franchisees have clubs in multiple states. Even though they have clubs it close to new york, they have clubs open in florida and generating revenue. There industries that had zero revenue for a period of time of closure, no takeout, no restaurants, for that period of time it was tough to get through that. A lot of rent deferrals. Lenders are very good with us. To get us on the other side. Our ipo was five years ago today , and weve opened 1000 stores in the last five years. 20,000 square feet. From a retail perspective they want us as a tenant. They want to make sure we get on the other site, which has been great. Alix give me some perspective if you have new people coming to the jims, most people drank and ate too much during the shutdown, are you getting new people in . Chris in the month of may and june we were over indexed in new joiners compared to last year. People cooped up in the house and ate too much, they want to get outside and see other people. We were happy with that. July, some of the sentiment in the u. S. , we are creating a little bit of fear to pull some of the new joining numbers back some. , peoplend of the day have a renewed appreciation for fitness. They see the preexisting conditions, 70 of the u. S. Is obese or overweight, and people will walk away from the covid virus and years ahead we will show more appreciation for being healthy. Guy chris, thanks for checking in with us. We appreciate your time today. Thank you very much. Chris rondeau, Planet Fitness ceo. This is bloomberg. Alix live from new york, i am alix steel with guy johnson in london. This is the european close on bloomberg markets. 1. 2 million american claims filing for unemployment last week, the largest improvement in two months, but then we get the jobs data tomorrow. If we look at the whisper number, we seem to be going higher in terms of adding jobs. Guy if you want to look at that whisper number, you can find that on your bloomberg, whis is where you will find that. The spread in terms of what analysts or economists are saying is huge. The adp number was not great earlier on. The claims number, which bounces around all over the place, california reports every other week. Trying to get a picture at the moment is tough, but what i can say is the initial burst back in terms of hiring does seem to be fading at this point. Maybe the gains are harder from here. Alix i also wonder, what i am stuck with, this came up in the cornell report, if you got ppp money and were able to bring back the workers you furloughed, now what . If you do not get more money in the next few months, you have to refurlough them, and then we are in the exact same situation. Just because things might look better tomorrow, that does not mean they will look better in the next couple months. I am pessimistic by nature, but that is what ive been worried about, the second and third round of layoffs. Guy that was always a risk. I think tomorrow payrolls will be important. You want to have a bigger focus on what is happening in washington under the stimulus tops. Alix as a leadin, that does it for guy and me, coming up is balance of power. David will be speaking with republican senator Chuck Grassley of iowa as the countdown continues for the stimulus between democrats and republicans. This is bloomberg. David from bloombergs World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. We will start as we always do with a check on the markets. Joining us is abigail doolittle. I do not see a lot of movement. Is this in anticipation of tomorrows jobs numbers . Abigail you are probably correct. Wait and see mode ahead of the jobs report. There is a huge variance between the high estimate of about 48 added, 3. 2 million jobs lets hope that happens, and the low, a loss of 600,000 jobs. Folks are in wait and see mode ahead of that report. We have stopped shuffling along, wanting to also note when will the fiscal stimulus deal happen . We have the s p 500 and the nasdaq up just slightly. Where we have more action is for some of the tech stocks. Apple is once again higher, up 1. 4

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