The cash trade less than one hour a day away. Stocks push higher as u. S. Coronavirus hospitalizations dropped, even as global cases top 20 million. Fresh stimulus remains elusive though, as President Trump looks to cut the Capital Gains tax. The earnings season continues, with numbers from heavy hitters, like softbank and prudential. Plus, we will speak with several ceos. Plus, ready and able, the bank of england. One member tells the times the bank will step up their q. Week q. E. Am their anna, what are you seeing . Anna good to see you. It had beenw where anticipated, 3. 9 . Threemonth rate, of course come with expectation that we would end the threemonth period to the end of june at 4. 2 . This is better than what had been anticipated, but remember, there is a challenge in terms of being able to reflect the unemployment reality on the ground. This number has been protected from rising to a large degree, for better or worse, and that means we still may be seeing a surge in unemployment. That is certainly the expectation of many economists, even the bank of england talking about higher rates, so how long we end up peeking and how long it takes to get there, we are peling how long we end up aking and how long it takes to get there, looking at their headcount and deciding to take numbers out. Matt we are getting numbers from softbank as well as some other Big Companies reporting earnings. First off though, softbank, 1. 26 trillion yen, up 12 yearoveryear. Softbank completed 4. 3 trillion yen of assetlion changes. Billionme segment, one yen, and we are going to continue to get headlines across from softbank, so we will continue to update you on what is going on there throughout the hour. We are also getting the Intercontinental Hotel numbers, and it looks like revenue missed the estimate. Anna yes, absolutely. Lets get into some of those numbers. 539million, the estimate to make and it is tough these estimates for anyone. Guess joins us now. Keith, we are getting a first look at these numbers. Muchus a sense about how visibility or lack of visibility you have as a Global Business at this point. Keith yes, the first half of this year has been the most challenging in the travel and tourism industry. When we saw travel restrictions come into play, we sought demand fall, and our revenue is down about if the 2 in the first half. We still had a profit and our cash flow positive in the Second Quarter because of our resilient business model. We have to reduce our costs, but it is a very, very challenging time for the industry. I have been really, really proud how our colleagues and Business Partners around the world are working together to address the issues as we prepare for the recovery, because we will recover in time, because of the inherent need for people to travel. So a really tough first half of the year, but looking forward to better times in the future. Seeing as far we as a campaign to get people back into hotels . Because, you know, a lot of people are opting for withations or staying friends rather than going into hotels. Are you doing anything extra or special, keith, beyond what you typically have done . Keith yes, a couple of things. We have very much been focused on explaining to them about having a stave say in our hotel. I was over in france, staying at one of our hotels, experiencing it as a customer, it is the social distancing, the hightouch items like pens and papers and the minibar, and they are really communicating to customers that we have a leading cleaning and operating system, so they can be safe, and we are talking about we are ready when you are ready. We are seeing people who want to travel, but it is really driven by where we are with the virus and the curve. We have some 80 , 90 occupancy at some controls in some hotels because of controls. Keith, what can you tell us about the chinese business, the rate of recovery, so we can learn . I know you spent a long time running the chinese operation. What kind of recovery do you see there . Business isnow, the really starting to recover there. I was on a video call yesterday with them, and they are dining in restaurants and coming into the restaurants. People are booking hotel stays. And the big resort destination is having its best month probably ever. We have resorts across china being sold out, so we are seeing Business Travel coming back, as well. As the virus is contained and people have the confidence to travel, and restrictions are lifted on the flipside, we have seen markets like australia and victoria where things have shut down again. Travel restrictions, where recovery was beginning to happen, and now, it is beginning to taper off, so it will be a bumpy road for this industry until there is a vaccine widely available and customers feel safe to resume normal activity. Matt you know, a Value Investor would say a bumpy road is the best time to buy or use some other form of that expression, right . You want to buy i guess the worst way to say it is when there is blood on the streets or when fear is the highest. Are there opportunities out there for you, keith, because it seems like now would be the time to strike . Keith i think there will be opportunities in this industry Going Forward. In solid nation, some Companies May not make it through because of the challenges we are under. We are lucky to have a great deal of the community. Our focus is operating our hotel safely and supporting these Small Businesses primarily around the world to get through this and to be incredibly well positioned so when the recovery comes, we can take advantage of that position to accelerate our growth and look for opportunities. Right now, it is very much focusing on the day today the recovery. You are wonder obviously focused on the day today, keith, but i wonder about thinking about the strategy Going Forward and m a, and repositioning to allow some customers to use your hotels differently . Some hotels have talked to us in the past about instead of the work from home to allow some sort of work from hotel. Is that something youre giving thought to at some locations . Newh yes, it is all of the seizures, and think about the long term for this industry. How will Customer Behavior change over time . What are the products and services they would like to have in our hotels and how they participate in that . That is what we need to think about. How does travel evolve . Somebody asked me, and i believe that 2021, 2022, 20 23 will look will more like 2023 look a lot more like 2019 than 2020. Yourself to am wedding, so technology will change this. People inherently want to travel. They inherently want to connect. We think it will be more similar in the future than different, but there will be some slight changes. Experiencemy hotel on a recent vacation, keith, having my temperature taken. Keith, chief executive officer at Intercontinental Hotel us, thank you for joining us. Numbers out of the u. K. , the , driven largely by the schema does not reflect the reality on the ground. July, it is perhaps a little more indicative, jobless claims rising by 94,000, and the estimate was for a drop of 300,000, so perhaps there were some mixed figures in terms of the data picture in the u. K. , but it is important to understand that we go into this data to really get a sense of how reflective it is of reality. And, matt, just briefly, on markets, the futures and the expectations, and we are much stronger in the asian session, the Hong Kong Market up to. 3 percent, japan up 1. 9 . Matt . , Hong Kong Market up 2. 3 japan up 1. 9 . Matt the move has been sharper than the average of the past 30 days. I want to quickly get back to some early numbers. Earnings numbers. 833 billion yen. And there are a number of other softbank numbers here. You also see earnings coming through that you saw at the better of your screen, wind systems, vestas, and they came out beating estimates. They came out with earnings before interest and taxes, 34 million euros. That was under the estimate. But they gave an outlook for the full year of between 14 billion and 15 billion euros in revenue, and that is better than the 13. 8ate that we had seen, billion in revenue. Coming up, we will speak to the ceo of vestas, shortly after and the 2020e, forecast, Natural Gas Prices remain low in europe, and up next, we speak to the ceo of unit lever. This is bloomberg ceo of unip schierenbeck. This is bloomberg. Welcome back to european open. We are currently about 45 minutes away from the start of cash Equities Trading. We have some very green arrows across European Equity indexes, so looking at gains of about 1 in terms of the futures trade right now, and that could come of course, translate into a decent open this morning if you are long stocks and that could, of course, translate into a decent opening. Reported lower prices for fuel in europe. The company has also announced a target to make their Power Generation portfolio in europe Carbon Neutral with a focus on gas, hydrogen, and renewables. We are going to talk to the ceo right now. On thehe ceo of uniper , andreas schierenbeck. Longer us about how much you think prices will stay at this level . thank you for having me. We are reporting higher numbers, million, more than double what we reported last year. Adjusted net income is up. Cash flow is up. We have a good run at the moment. That is why we are adjusting our forecast, as mentioned. And the business, we are optimizing our storage system and low prices have had an effect. It has worked out very well for us. On the other hand, the other part of our business, supply ourgy, is benefiting customers, and our customer is very favorable to that. We have customers who are credit worthy, so that is very promising. So, on the other hand, as you mentioned already, we are focusing on hydrogen. Decarbonizeg to our portfolio and to switch to hydrogen. Anna yes, and with that in mind, recent legislation passed ,2038, i wonder when you think it will come to an end in germany . Many other European Countries have much sooner deadlines. Germany, itcourse, has passed some hurdles. I cannot speak for the whole industry. Off our assets, 2025, and the newest one we just put into operation recently, we will try to operate that as long as possible. Nonetheless, we promise to portfolio, our 2035. And they all will be gone. We will see how the process works. I think we will have a rather fast exit at uniper. Matt i have to ask. A number of german newspapers recently published that u. S. Officials from three different Government Departments were on videoconferences in recent days with european contractors to sort of support, to underline, their aim to stop nord stream 2 and to talk about new sanctions, etc. What is your view on the possibility of this project being completed, and how does this affect uniper . Andreas we are one of the investors, and the final part has ended already. There is what is necessary to complete the project. We cannot answer some things because we are just financing the project. The europe situation, supply and production groaning, and it will stop soon, as well as in other parts of germany. A gap opening up. We need nord stream 2 for that. The safety and supply, we need both of these things. We need American Energy and russian gas. That is why we are really regretting the harsh sanctions announced to hinder the project coming through. We are not really following the law. We are financing the project already, so from that point of view, we are looking at that very carefully and observing the situation. Are observingou the situation. With that in mind, just briefly, does this affect your ability to do business in the United States because, as you described, your limited involvement in the nord stream 2 pipeline . Andreas not at all. We have good operations in the lng, and wexporting were the first to export it to europe and two other places, so from that point of view, we are not concerned about our american operations from that we were the first to export it to europe and other places. Upiper t o of uniper there. Coming up, President Trump and a stimulus deal remaining elusive. That is coming up next. This is bloomberg. Back to thee european open, and put about 37 minutes away from cash Equities Trading in europe and the u. K. , and we see futures pointing higher welcome back to the european open. In the u. S. , democrats and republicans remained deadlocked, the both sides exchanging blame. And republicans brought no new ideas for restarting talks. Of course, President Trump has brought a new idea in terms of executive actions. He is also considering a cut in Capital Gains to add to the of four he has to the effort you are he has already done. A cut inconsidering Capital Gains to add to the four. Economist,ed by an and lets first talk about what is going on in the u. S. In terms of the stimulus. Seen a lot ofve opinion about the executive orders as a stopgap. I think Mohamed L Arian called it a bandaid. Arian called it a bandaid. The stimulus is really important, and in particular, we are extending unemployment benefits. We know that there are millions of people on continued claims, and so to get their recovery, to get the u. S. Recovery, to continue, we do need some more fiscal stimulus in the system, because the u. S. Is suffering from a second wave, and we are seeing many states being locked down, with the opening of the economy on pause, and so, with that, you need additional fiscal stimulus. Anna and as we work to the what abouten, piya, the conversation around fiscal stimulus and how it will play into electoral calculations . The macro model, if you model the election, it has biden winning quite comfortably, so we think about trumps backdrop, suffering from low approval ratings, and the second wave is becoming more contained, and potentially, the recovery is beginning to stall, particularly in the labor market, so this fiscal stimulus will be crucial for the economy to continue recovering, but for both candidates, economic recovery will be on the agenda, so to some extent, both trump and biden are looking at fiscal stimulus, and they will be talking about it even in a years time. You, our economist from schroders. Stay with us on the program. Matt,i will mention this, because we talked about u. K. Unemployment, and we will talk further about that. U. K. Implement has followed the most since the Global Financial rices, and what about graduate since the financial crisis, and what about the support . Inn will bcb spike up employment when will we see a spike up in the u. K. Is bloomberg. To bloombergback markets, this is the european open. 30 minutes away from the start of cash equity trading. 100 inat gains almost terms of deck futures, ftse futures, cap futures. Lets get the bloomberg first word news. Lebanonstreet government has resigned after the ocean at beiruts port. The Prime Minister hit out at opponents in stepping down, blaming a corrupt political elite for sabotaging his administration. Ministers will continue in a caretaker capacity until a new government is conformed. The number of Coronavirus Infections around the world has topped 20 million. The virusx months for to hit 10 million. It has doubled in just six weeks. The early doses of a vaccine will likely be reversed reserved for key workers. President donald trump abruptly left a News Conference after a person was shot near the building. The secret service ushered the president out of the room. The incident occurred around the white house, but not within its gates. President trump returns nine minutes later. Canadian Prime MinisterJustin Trudeau is asking mark carney for help in reviving the economy. Five months after leaving the bank of england, he is now an informal advisor to trudeau. Carney is also a u. N. Special envoy on Climate Action and finance and an advisor to the u. K. On the now Climate Change conference. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna, matt . Anna next very much. Laura wright here in london. U. K. Employment has fallen by the most since the Global Financial crisis. 220,000 in the Second Quarter. Coronavirus restrictions were at their most severe. That labor market crisis is expected to gather pace as Government Support is withdrawn. Piya sachdeva is an economist at schroders and still with us. Data,e had a swath of some better than anticipated in terms of the u. K. Labor market story. Maybe that is testament to the amount of protection the labor market is being protected from reality at this point. Piya exactly. We know that the labor market situation will become a lot clearer when it ends in october. To the extent we are looking through some of these unemployment numbers right now and then there was also the question of participation. Participation in the labor market has fallen quite sharply. We think about how unemployment is measured, it is the number of unemployed as a proportion of the labor force. As people exit the labor force, that also holds down the Unemployment Rate. That is another key factor to watch. See significant you know, countries that have significant social safety nets like here in germany and other social democracies do you see them recovering better from this severe economic hit then countries that dont . Piya it is a great question. Initially doing our forecast, we saw countries like germany, japan potentially doing better because they had used furloughs before. Sometimes, you see weakness in other parts of the economy. If activity can recover quite economieshen those can do a lot better. What we have seen in the u. S. Is they have had unemployment rise, but now the fiscal support is really needed to keep the consumer going. Anna we are going to get gdp data out of the u. K. Tomorrow. That could look quite dire, couldnt it . If people are on furlough and not actually producing things, that impacts gdp numbers. Bloomberg economics is forecasting secondquarter gdp to drop by 21. 5 . The is your estimation for Second Quarter story for the u. K. . Is a our expectation similar number. It is a huge number. Pretty crazy. That reflects the large effect the u. K. Has and the long locked in the u. K. Has had, too. The difference in the u. K. Gdp data and others is that we get the gdp data months later. So we have a good idea about what this number is going to look like. Is theou see, brexit issue that is looming, i guess like the sort of damocles, actually making any difference or are people not thinking about it at all . Piya i think it is a key factor driving sterling. Is havingr that it market implications. Otherwise, when we were previously discussing the impacts of a hard brexit, these arrows and now just forecasting the covid crisis. This vshaped scenario and lshaped. Comparedoff the chart to a hard brexit. Combined with other elevated political risks like u. S. China tensions, we could see this becoming a theme at some point. It is not as important as the shape of the recovery. Brexit reduced to the size of a forecasting era. The context is always important. Piya sachdeva, economist at schroders, thanks very much for joining us. Coming up on the program, the worlds second largest gold producer plans to play it safe, even asset waits for bullion to rise. Our interview with the ceo just how high do you think all prices are set to go . We will get the thoughts of the ceo of barrick gold. This is bloomberg. To bloombergback markets, this is the european open. Im matt miller in berlin alongside anna edwards in london. We are looking at futures showing gains. About 21 minutes ahead of the open. We could see risk on tuesday morning. I want to talk though about something that glitters and literally is gold. The worlds number two gold producer sees higher prices as the pandemic hires the Global Economy. It is not planning to take a more aggressive approach. Barrick gold ceo mark bristow says the company will continue to make decisions based on the longterm price of 1200 an ounce. You want to keep the relevance of being a Large Cap Company in the Resource Base and you want to continue to replace the gold you mine, you were going to have to get your head around the importance of coming with the gold. We have to move to bigger and bigger deposits, which are then usually deposits that come with gold and it is the same process, very little difference in the technology, but i dont think we have to spend too much time on that. We have built a great business Barrick Group and we are being able to deliver highquality returns to our shareholders at a time when they need it. And we are just to answer the question about are we going to be seduced by the price . Definitely no. Ive talked to you many times over the years, mark, and you have always tried to play with a straight deck when it comes to the gold price and talk a little bit about making sure you are doing it on a reasonable and sustainable metric. There are people around the world shouting at the television right now saying, ask mark where he thinks the price of gold is going. It has come up very quickly. Where do you think it is going . Mark it is a good question. What i would say is if you look back to 1972, there have been two gold sparks. 1980 and 2011. Of course, we have one now. They are all spikes. But what is important is if you look post each big rise in gold form. Is a new basis i will try to explain to you why. What happens when gold prices run up like this is that the paper money is at risk. On top of that, you get a flight to safety. The flight to safety comes off as the Global Economy stabilizes. You dont have to be a Rocket Scientist to understand that all this printing of money is going to result in damage to those core global currencies and the measure of that is an elevated gold price. We are expecting the gold price to settle let a new base. We are going to see lots of volatility over the next while. This is an unprecedented global event. It is going to take some time and certainly more time than what we saw in the post2008 great Global Financial crisis. But at the end of the day, there will be a new base. We will wait to see what that base is. In the meantime, sticking with 1200 is the right thing to do. We have allocated our business on a 10year plan at 1200. We have those defined. For us to change the gold price in which we allocate capital, we would take away from those margins and we dont want to do that. There is opportunities to take additional production on the margin outside the 10year plan and we are definitely looking at those opportunities Going Forward, but that would be my point. Anna that was the barrick gold ceo mark bristow speaking to our colleague at bloomberg. Lets get to somebody else thinking about the relationship between money printing by Central Banks in the price of gold. Mark cudmore, r Bloomberg Markets let managing editor is here with us from singapore. Sticking with this gold theme, because it is interesting, you have been thinking about the link between what you see and where gold prices go. How high do you think gold heads . Irk c. i mean, like mark, dont know about an exact figure, but i do think it is going significantly higher in the next 510 years. I wish i had heard the interview before this piece. We are seeing modern monetary theory by proxy coming into the equation. It is now just assumed by both sides of the political debate in the u. S. And globally it is not just the u. S. That we are seeing that a response to any kind of dip in markets, any kind of dip in the economy is just to print cash and pump it into the system in anyway possible. We are just quibbling about how fast we get there. That means people are going to like assets which are akin to a store of assets or are perceived as a store of value. Embarrassing for me as a longtime cynic of bitcoin, think bitcoin will also qualify. Land values in some places will struggle, so youve got to be very much informed which land prices and that is probably the same with art or wine. Where is gold or bitcoin which are assets that are interchangeable around the world, therefore they are the easiest store value plays to make. Matt maybe supercars, as well. Lets not forget about limitededition for aris ferrar ferraris, etc. Getting back to gold, im always fascinated by the idea that if i wanted, do i buy physical gold . Do i buy etfs . Do i buy Something Like the miners as a proxy instead . Where does the best opportunity like . Mark c. it is a great question and probably warrants further analysis. As a general guide, whether the s are a better value there is not one simple answer. I havent run the numbers about which is better at the moment. In terms of whether you want futures or physical gold, to me you go for the cheapest option. As i said, while many people like gold for the haven if the Financial System collapses, that is the worst time to have gold. Owning gold is like having a knockout. We get the zombie apocalypse, your bars of gold arent going to be very useful running around when you are trying to survive. Much better to go for guns and shotguns without gold. Goldthink that ultimately trade off that apocalyptic forecasting of the Financial System, it does not warrant that extreme outcome. I think people who buy solid gold in their holdings, because they believe in outcomes like the whole Financial System collapses i want to hold my gold i would say you would have bigger worries or concerns. I would go for the cheapest one, which would be futures. Anna let me ask you about your Inflation Expectations. On mliv, you have been throwing about the question, are inflation concerns building in markets . Some people hold gold for that reason, to hedge against future inflation. Yet, that maybe flies in the face of what we have been saying about mmc and that risk creating inflation. How do you tie these things together . Mark c. i dont think that inflation risks are in the market. I think the tail risk is building. Therefore people are putting on more hedges. The idea that it can come. If we do get a big inflation spike, that will just really, really disrupt so many other Financial Investments out there. The tail risk is so dangerous for markets that more people feel they have to hedge against it and that is why we are seeing a change in pricing. It is not like everyone is suddenly going, we are going to get inflation. The disinflationary pressures are just too strong. I think not only from the demographics and technology side, i think also the fact is that the policy of Central Banks at the moment are disinflationary at the moment as well. Im not seeing any major threat of inflation. Marketsm seeing is increase their hedge for the tail risk outcome. Matt all right, mark, think you very much for joining us. Mark cudmore, bloomberg mliv managing editor, talking about what was one of the hottest questions of the day and that is the mliv question. Are inflation concerns building in markets . I would say i got more email from viewers about laois and and disagreements on that than really any other topic in financial markets. A lot of people are insistent that inflation is already here. Always quoting food prices to me. Other people are saying i went out to lunch last weekend it was halfprice. They are very different views and there is a basket of stuff that i guess as a market we have all agreed on, but not every participant thinks it is a great basket. Lets get to the Bloomberg Business flash. The top corporate stories from the terminal. For that, we go to london. Uber and lyft have to conferred their california drivers from contractors to employees. The judges ruling wont be the last hurdle in the matter as Rideshare Companies are bowing to appeal. If companies have to reclassify drivers, they would be on the hook for overtime, health care, and other costly benefits. A 6. 6 billion impairment charge as the collapse and Energy Prices has taken its toll on the shale producer for occidental. Ever is more valuable than and so is ceo tim cook. According to the bloomberg billionaires index, he is now a billionaire. He has never had a huge stake in apple. Most of his wealth comes from equity awards he as received since joining apple. That is your Bloomberg Business flash. Matt, anna . Anna thank you very much. Laura wright in london. Minutes away from the open of the European Equity market. Expecting things to move higher in europe. Up next, your stocks to watch, including hello fresh. The Meal DeliveryCompany Cease sales almost doubling as the pandemic persists. This is bloomberg. Back to thee European Market open. Eight minutes to go until the start of the cash equity session. Futures point to the upside. That is the overall market expectation. Which stocks are we watching specifically . Lets get to our stocks to watch with the dani burger. Good morning to you. I see that they are confirming their 2020 forecast. You can say that about all businesses. Dani that is certainly right. Again, we say the stayathome kind of play is shining. Zalando being the Online Shopping retailer. They are confirming their outlook about a 15 20 revenue growth. For their second, their adjusted ebit was double what they saw last year. It is clear more people are shopping online. They also talked about on boarding more brands onto their platform. It is helping other retailers who otherwise are having trouble selling brickandmortar. We already saw zalando rally premarket on trade dates. Matt i have to say, sometimes i comment on Companies Whose names i find unappealing. And but we never say when someone has a great name. Fresh is alike hello great name for a company that sells food online. Dani yes, and it is a meal kit. I feel like it is a good reactionary name of what you might do when you get it. This is definitely another stayathome play, much like the lando zalando. They were up more than 8 after their margin jumped impressively. It did raise its guidance for the third time this year. It said the summer is going to be even better than they expected given the seasonality and they are seeing demand for an unfortunate reason especially in areas where fear of the pandemic is starting to come anew. They are seeing increased orders. Anna yes, no matter how strange the lockdown might get, lets food. Art looking to our what is the update in the wind turbine business . Dani Second Quarter, a tough Second Quarter for them. Missing because they had bigger charges because of different turbines they had to fix, but they did give a full gear estimate at the highend. They see revenue of 15 billion estimated with 13 point 8 billion. Matt thanks very much. Dani burger there with some of the stocks we need to watch at the open. These are stocks that could move around. The market open is just five minutes away. Futures pointing higher. They are not as strong as they were at the top of the hour. We were looking at dax futures gaining well over 1 . They are not there now. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Anna good morning, stocks push higher as u. S. Coronavirus hospitalizations dropped, even as global cases top 20 million. Fresh stimulus, as President Trump floats a cut to Capital Gains taxes. Softbank reports profit after record losses, and springing back there 2020 guidance. We will be speaking to the company ceo in about 20 minutes. And able. The central bank will step up qe program as u. K. Employment drops the most since 2009. Pointing higher, we are not seeing quite the gains we saw at the top of the hour. Still, pretty strong, the dax futures up, the ftse futures up about three quarters of 1 , and we do have gains in u. S. Futures, as well, up to 3 10 of 1 on the s p, the dow, and the nasdaq. Take a look now at the open. We are going to pull up the global macro movers scream, as we tend to do at this time, as we tend to do at this time. These are showing gains. Now, we have the cac 40 open and anddax in frankfurt open showing gains, the strongest in germany up almost 1 now, but you see most of them are up 8 10ths of 1 , and we see this across the continent and the u. K. Right now. We have got companies that we talked about this morning, like one up 6 , leading the charge, and we will talk to the ceo of vestas, coming up. Asian markets posted their biggest in a week, and the risk on sentiment continues. President trump says he is seriously considering a cut to Capital Gains tax. Meanwhile, jobs data in the u. K. Falling the most in a quarter since 2009. Joining us is an International Portfolio manager, and both of these, you know, both of these encouraging pieces of news have caveats, right . President trump cannot cut the Capital Gains tax. He can change the way your but a lot determined, of people probably did not get out of the house to get to the Unemployment Office and file, so that number may be misleading, as well, so what is your take . Certainly, we are seeing quite mixed messages, but there are green shoots coming through in terms of the stimulus, some of the economic strength in the economy behind that rebound, and also just coming out with earnings season, there is a bit more certainty in the market, and investors are looking at that as they are moving on, and now they have that data point with more Companies Issuing guidance, and yesterday, we had that value trade strong again, so that rebound coming off of some of the growth names that have done so well. People are starting to look at that and the economy effect and some of the names that have not been rewarded so far are starting to push higher, as well. Louise, good morning. About the earnings season in europe, are you concerned around balances she Balance Sheet strength . Performance . Louise it does vary a lot across sectors, in terms of profitability, a lot of companies are capitalizing on having to reevaluate their business chain, and therefore, that profitability is starting to come through, and certainly some of the employment numbers, they are redeploying staff in value added areas, and that is looking quite strong. On top of that, we have also got as well as profitability, the Balance Sheets strength is, like, it is what investors in a big selloff, so it is likely that Going Forward, despite the uncertainty, we could come out of earnings season, and because it has not been quite as bad as they expected, in general Companies Beating market expectations, i think we will actually start to strengthen from here. Know, it is interesting. I love talking to you, louise. You have a masters in engineering and have also worked in the corporate sector. You are a csa. You can look at this in a multifaceted way, and we are going through a time of real transition, right . There is going to be some habits we got into during the lockdown that are sticking read the way people do business is different. Is there anyway we get through, even with a socalled vshaped rebound, without having a massive disruption on the jobs front . I mean, isnt a jobless recovery for some time a definite . Louise there are different types of jobs, where they have to reevaluate the business model, particularly if they are looking at the supply chain, which is they are having that around the world, the disruption. And the virus early on in asia, they may be look to source things more locally, so in terms of that, but the biggest trends, what the pandemic has really accelerated is the digitalization, so there are a loss of jobs in the Tech Industry or other drugs that may not be coming back. There may be different types of jobs, and we are seeing that in some of the tech companies, putting up these numbers and hiring, and that all comes through and will move the economy forward. Louise, do you see any reason to be cautious around technology, either around valuation or around geopolitics . Contention,oints of if you like, between the u. S. And china at this point . Is dampeningthat the mood a little bit. As you mentioned, valuations have been quite extreme, so investors are starting to see, are things being revalued, but again, coming through the earnings season, a lot of companies met or beat expectations and rose again, so that is not a trend we expected to see. Perhaps because of their size now, the growth rates are coming down. In absolute terms, in terms of what they are gaining and with some of the underlying earnings, as well, it does continue to be spectacular. And businesses do have exposure across industry, so this is across the economy. Hospitality, services being weak, and then doing well, essential businesses. Help,rials continuing to so they have that diversification, and, again, that kind of exposure to the digitalization trend, as well. Much,louise, thanks so joining us there from international federated, where she is portfolio manager. Louise stays with us. We will get more thoughts from her and discuss her pix and get into some stocks. This is bloomberg. Matt welcome back to bloomberg market. This is the european open. We are 10 minutes into the session, and we are looking at x, and,n the cac and da really, the ftse, as well. Lets get the Bloomberg Business london. Th laura in laura . Laura thanks, matt. An exit tax will derail their exit plan. Er says an exit tax will derail their plan. They have plans to unify their headquarters in london. Push tontinuing to streamline its business, sources telling bloomberg they are exploring the sale of a unit, and they have reached out to potential buyers to get interest. They make a range of chemicals, including those in agriculture and medical industries. Uber and lyft have to convert their california drivers from contractors to employees, and the ruling from the judge will not be the last on the matter as the Rideshare Companies have appeals. If they have to reclassify their drivers, they will be on the hook for medical and other costs. That is your business flash. Matt and anna. Laura, thank you. Louise is still with us, a Global Equities portfolio manager. Lets get to some of the sectors you like, some of the companies you like, and talking about geopolitical tension, an individual names, with opportunities in places that you might have thought might be impacted by that, and you have got a couple of taiwanese names that you own. So how do you manage to look through the politics and focus on the business is . Yes, so as investors come we are very much focused on the fundamentals of the company and try to avoid a loss of the macro topdown sentiment, and we are quite longterm in our focus. Of these shortterm gains from a macro perspective will kind of run out in the wash and get things reversing with averages, so looking for exposure across sectors, and that often protects us a little bit from some of the uncertainty. We are certainly not looking to take concentrated bets on individual decisions. Andre seeing through trump and brexit,exi so we also like to look at a three to fiveyear horizon, and we are looking to be quite broad. Again some protection. Year to date, we have had a big selloff and lots of mergers. We suffered through that. And then we had to be stronger rebound than what people expected. To try to predict that topdown is difficult, but with the longterm, you will see that protection and that ongoing marginal gain on a longterm basis. Louise, let me also ask you about the retail space. I see that you like some of the names in the u. K. I wonder, is that the kind of business that can be challenged by people traveling less by train stations . What is it about that kind of takeout business that you like . And again some, of that longterm focus, where they have about 15 of their business in travel. But those are things that are not going to go away. , those at high street types of convenience names, and certainly in the last couple of years, their positioning has been very strong, so we certainly have not seen it rebound as yet, in line with the broader market, but there is the portfolio positioning that we see concentrated growth, that we do want that resistance when things do selloff. Lululemon,lso have right . A retail oriented, consumer discretionary. I know you like them because they do not have an expensive real estate footprint and our online. I want to talk more about of an louise, because that situation, and you like the wind power. , for example. S we are about to talk to their ceo. Gamesa, and atns least four vestas we are seeing better, raised forecasts for the full year. Yes, we are seeing a lot of demand for those names. We are seeing, again, with the positions in the economy, very much up and running across the gamesaso both siemens and vestas have that. In the last year or so, we have had weakness from the indian market, with a transition to renewables, but we see that coming back. Because there has been such a strong kind of innovation drive within those companies, it is just becoming more and more efficient, and we continue to see gains in profitability within the companies. All right. Louise, it has been a pleasure talking to you. Thank you for joining us. Louise dudley, a portfolio manager. She will be continuing the conversation with anna and myself on Bloomberg Radio at 9 00 a. M. U. K. Time, so if you want to hear more from louise, tune in on digital. You can use the Bloomberg App to listen to radio or can use the google Bloomberg Radio, like probably so many other people do. Coming up, as i said, vestas, wind turbine maker, reissues guidance, and it is better than what the street was looking for. We will speak to the ceo, next. Henrik andersen. This is bloomberg. Bloombergme back to market. The european open, and we are 20 minutes in. Equity indexes, looking at a gain on the cac 40 in paris, almost as much for the dax in frankfurt, the ftse up in london. Helping to add to the european gains is vestas, the worlds biggest wind turbine maker reintroducing their guidance ahead of the street estimate. It had suspended its target due to the uncertainty around the coronavirus pandemic and now sees revenue for 2020 between 14 billion and 15 billion euros. Lets talk to the ceo right now. Andersen joins us right now. For your time. The guidance, putting out better guidance than the street has been calling for, is this driven by sort of the green new deal, the government fiscal spending aimed at green that we are seeing around the world . Henrik good morning. Thanks for having me. And i think, first of all, the confidence means the guidance comes from a solid quarter performance of my 26,000 products around the world, and they absolutely get a big thank you from here, because we have been battled. We have seen the covid19, and to some extent, in europe, we forget that even though it has probably relaxed in tension over the last month, month and a half, we still have a number of centers, both the u. S. , india, latin america, and part of africa, really high still, but for us, the quarter has been solid. We have been able to manufacture and ship nearly 10 gigawatts for the first half of the year, and that gives us the confidence going into the second half of the year with maybe a bit higher than usual risk due to the covid19, but it also puts guidance in place that is 14 billion, 15 billion on the top to 7 with ebitda. Anna the Services Side is lucrative for you. Do you expect organic growth, or is it m a . Henrik we strongly believe. In our own business, we have grown in the quarter 6 . We have taken orders across all of the world in the quarter, and we actually had a milestone in the quarter, where we passed 100 gigawatt on the service, which means we are looking at an excess of 47,000 turbines of our turbines, but also on other manufacturers turbine s, so we will continue to grow the business, and i will just say here that this is a highly technical business and also highly datadriven, so there is an appreciation of the smaller colleagues that have been working tirelessly in the previous quarter here. Youre you seeing know, we hear a lot about countries, governments, that are spending more to help the economy recover post covid and also aiming at green initiatives, but are there other countries, are there other governments, that are having to back away from Renewable Energy as they focus on repairing their economies, you know falling back on easier, cheaper, and your dear Power Sources . Here, it is not the timing to try to hang individual opinions out. We have been pleased to see that the whole quarter has been almost one way. All countries and governments are right now looking at how we restart the economy and how do we also add to the speed of the transition from the fossil towards the renewable part of the energy manufacturing, so we are pleased with that. Some of those packages, some of those structures, will then support our business for the coming decade. This is not about how will that affect the fourth or third quarter, but, of course, i am very pleased to see we have taken 4. 1 gigawatts of orders in the quarter, where most of the world has been disrupted, and, actually, that comes from 18 countries across in a quarter like this, so a lot of countries, a lot of customers are keeping, not only keeping but actually accelerating, their investments into renewables. You have taught in the past about consolidation within k. E sector, henri we are looking at an increasing consolidated sector. Do you see that increasing from here . Henrik we are becoming very mature as an industry and becoming mainstream in terms of energy sourcing, so therefore, i think what we have seen in the previous years, it is only natural that we have consolidation. It happens by a certain number of players, but there will always be a minimum and maximum number of players or reasons, so there will be a number of players, and we will be similar, that there will be a number of players in the offshore, and we are going to participate in both. Henrik, thankt, you for joining us, henrik ande resen from vestas. 6 , one of the biggest gainers on the stoxx 600 , adding the ninth most points on the entire index. Lets take a look at some of the other movers. Hello fresh season sales almost doubling, shares also up 6. 5 , and mediobanca. An italian billionaire may boost up stake, those shares also 4. 5 percent, almost 5 , and International Hotels gaining 3. 7 itsrcent, even as it missed first half revenue estimates. It could be a day where a rising tide lifts all boats. U. S. G up, china hits officials with sanctions. We will talk more about that and talk also about next digital. Anna Bloomberg Markets european open welcome back European Equity markets are doing well, up by more than 1 . 4 on the stoxx 600. The futures picture has anticipated for us. 1. 7 . C and dax up by we are upor, we see acrosstheboard. All of these sectors moving to the upside. Travel and leisure getting a boost, up 2. 6 . Troublesing about the around the recovery particularly in china. Oil and gas to the upside. The more defensive sectors, the bond proxies are not gaining as much, but all to the upside. Seeing rising tide action today. Lets get the first word news, the top stories from the terminal with laura wright in london. Laura u. K. Employment has fallen the most since the Global Financial crisis. The number has dropped by 220,000 in april to june. It highlights the economic shock facing the u. K. Which is expected to escalate. President trump said he is seriously considering cutting Capital Gains taxes, a movie decided against last september, saying it would not do enough to help the middle class. He thinks it will create more jobs. He cannot cut the rates without congress, but some say he could issue an executive order. The number of Coronavirus Infections around the world has topped 20 million. It took six months to hit 10 million and doubled in six weeks. Public Health Officials are warning caution on the timeline for a vaccine. One may be cleared or use by the end of the year, but early does his likely be for key workers. A protest ended in violence in belarus as the president claims a landslide victory in the election. The ballots have been marred amid Police Crackdowns on the opposition. Mike pompeo says the u. S. Is deeply concerned, adding the election was not your fair. Not free or fair. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Bloomberg. Matt thank you very much, laura wright in london. China is sanctioning 11 americans in retaliation for similar measures imposed by the u. S. On friday. It does not include any members of the trump administration, but senators rubio and ted cruz as well as tom cotton them pat toomey. The heads of organizations as well, including Human Rights Watch have been sanctioned. We are joined by bloombergs karen lee. What impact are these titfortat sanctions going to have . Karen the important thing to remember is this does not include any members of the trump administration. That can be read as a muted response. Against sanctions were lead officials including carrie lam. The white house saying it was symbolic, and a lot of people viewing it as symbolic. China has not specified what the sanctions will entail, and it comes after last month when rubio and cruz over other symbolic sanctions in december. Cause more tensions which have risen more sharply in the last couple of weeks. Anna let me ask you about stock Market Reaction perhaps connected to the political tensions. And how the security law is being carried through on the ground by law enforcement. We talked about digital yesterday, this Publishing Business surging. The man he find the business locked up in hong kong at this point. What is the latest on that . Karen this is an interesting story, and it looks like hong kong prodemocracy protesters have a new weapon, their stock market trading accounts. More than an is 1000 surge in two days propelling the stock 28 hi. To a high. They have this new protest method after months of street protests and other things they have been doing, but it underscores the challenge authorities face as they try to stamp out the prodemocracy movement. Matt thank you very much for joining us, karen lee talking to us about some of what is going on in china and hong kong. We are seeing more headlines now. It china has voted to extend the terms for hong kong lawmakers for a year. We are talking about the hong kong ledco. Those lawmakers will have their term extended for one year. Some media sources there. Also, china reiterating a warning to japan. It is not just the u. S. Japanating a warning to against interference in hong kong. Ceo of the Financial Advisory business has warned a second wave of bankruptcies could be on the horizon. He said the u. S. Economy has hit a point of significant danger, given that government stimulus will not last forever. Ofwe have been through a map first wave restructuring, and the second wave that i believe will come depends on what we are talking about. Many weaknesses at Many Companies have been disguised or hidden by Government Support. As that is withdrawn or not continued at the same rate, the pressure on many corporates will become more manifest. I personally unfortunately think we will see another wave of bankruptcies across Corporate America. As an investment banker, people want to talk about what you are doing, but this year there have been sovereign advisory work, lebanon being one of them and argentina another. Can you explain what you are seeing for sovereign debt . What demand do investors have to invest in countries who have issues related to the pandemic and then these addon issues as well . What is happening in many countries, some with lazard clients with preexisting conditions exacerbated by the pandemic, but for other countries, the pandemic is causing fiscal pressure just like here in the United States. We are seeing local governments and a substantial increase in the federal deficit. Revenue declines, you need additional spending to cushion the blow from the pandemic. The result is a significant increase in public debt. For many sovereigns across the globe, they are not in position to handle that debt, and that causes a debt crisis. We are having promising signs about creditors and governments coming together in argentina, ecuador, elsewhere to reach agreements to deal with these problems before they become outright crises. We will see if that spirit of cooperation can continue into what inevitably will be other sovereign debt problems over the next year or two. Does the issue of more sovereign debt problems arising, how do you think of that . These are countries in weaker financial position. But what becomes of the United States as the debt bubble starts to swell . Officecommission budget was that with this report for the first 10 months of this year, more than double of last year, that is not surprising. We are running a fiscal experiment but one we have to run because the alternative of not providing support to the economy during to offset the pandemic would be worse. It would cause longlasting damage to the economy. Debt is increasing in United States, but that is ok. You also have a birds eye view of how Corporate America is react to these tensions created between the u. S. And china. What is chief concern to your clients now . The relationship with china is complicated obviously in the technology space, and in particular a lot attention more rapid deterioration in the relationship. And what many people are calling the Technology Cold war. We need to remember the relationship with china is bigger than what you read about in the newspaper or on bloomberg , where the flashpoints are. Most are in technology, that has been building for a while and accelerated the last several months. Any companies are concerned about the implications. That was the ceo of Financial Advisory at lazard. Former head of the omb speaking exclusively to bloomberg. Up next, u. K. Employment has fell the most since the Global Financial crisis. Asld there be worse to come Government Support is gradually withdrawn . We will discuss, next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 43 minutes into the trading session, and it is shaping up to be positive for the cac and dox. The stoxx 600 up by 1. 6 . Forced to write down 40 of its market value in the form of a 6. 6 billion charge. It comes as the collapse in Energy Prices is taking its toll. Most of the writedown is related to the lowered value of its onshore operations. Tiktoks talks with microsoft and twitter are unlikely to end in a deal, according to the china post. Low,ys the price is too making the deal no higher than 20 . That makes twitters chances even lower. Matt thank you very much, laura wright in london with your business flash. The u. K. s economic misery is set to be revealed over the next two days. Unemployment falling the most financialglobal crisis. Gdp is expected to plunge last seen in 2003. Joining us is dani burger. It tell us about the gauges we are watching. Was it employment or unemployment this morning . On employment data, it stayed the same at about 3. 9 . The picture came in better than expected. It might be masking the greater issues in the u. K. Job market because the data only counts people actively searching for jobs. If you lost your job looking for a new one while parts of the country are lockdown, it is very difficult. The picture is not a bright one. Andipped on employment, eight track each other. Look at they can seize, they plummeted. There are not as many job openings. That tells us people are likely not looking for jobs at this moment. The rates of people without jobs is likely worse, especially when you think of the Government Schemes helping people. It is likely Discretionary Spending has been pulled back. ,f you look at the u. K. Retail it is far below france and germany which i have in the blue and yellow. Is half thefootfall level before the pandemic. Look at france, only 15 previrus levels. Restaurants,ation, we did see the level go back to normal with the Government Schemes, but it started to wan again, showing a lot of fear in the u. K. Populace. Anna thank you very much. Fellmployment number 220,000 ending june. The estimate was 300,000, better than expected, but bad news that the employment number is falling. Data versusd estimates, that is more positive. There is limited value in this data. s get into that they kill lets get into that detail with gerwyn davies, Public Policy adviser, cipd. Great to speak to you. We have seen today the Unemployment Rate held at 3. 9 despite expectations that it would go higher. None of this is the picture on the ground. The furlough scheme is high, people who would be looking for employment elsewhere classified as unemployed. Number has risen sharply, so the people actively not looking for work masks the unappointed figure. The biggest worry is the reason why we are seeing employment fall is reduced hiring rather than increased firing. If we look at the next three months, our survey published look tok says employers increase by 50 , which suggests that relationship will break and we will see unemployment rise sharply through the year as the job scheme unwinds. Matt say again, the number of employers that tend to fire people has increased by 50 . Gerwyn 50 over the past few months, and this reflects how effective the Job Retention scheme has been. This is the month when the government starts to unwind that support and gradually decrease it. It will ultimately end in october. Organizations are taking time to reflect, and it is now when unfortunately they have to look at job losses within the organization. Upticke might see this in unemployment as businesses increasingly face reality of a post for low economy. What level do you expect unemployment to peak at . I see some estimates that 7 , 8 to the end of the year. Perhaps we need to look further . Gerwyn i do not want to put a figure on it, it is impossible to call. The numbers will increase and there is a lot of uncertainty given that we do not have the pandemic under control. We do not know what the shortterm or mediumterm future holds. We have brexit negotiations which a lot of organizations are looking at for political developments. Until we get a clearer side of those things, we will have a clearer picture. What we can say in terms of employers early behavior, if there is a resemblance to the recession from 20082009, where tacticss a mentor of of decreases across the board. As well as terminating agency work contracted. That is the right thing to do because if you look at the average cost of redundancy, it is over 10,000. You have the cost of hiring afterwards. Best in the our u. K. To have all our members look at all the alternatives because of the direct financial costs. Matt thank you so much for joining us talking about this important issue. Gerwyn davies, Public Policy adviser, cipd. Up next, investors rush back into risk assets as gold falls for a Third Straight day. We will discuss what is driving stocks higher with our markets live team, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. On a day 54 minutes into the session ever climbing gains. 2 and more on the dax and cac. Joining us now is kristine aquino, who leads or mliv team in europe. The first question, why is there a risk on feeling in these markets . Kristine good question. It is one of these things where it is a combination of different factors, presumably a little to do with the stimulus progress in the u. S. And talks about tax cuts. Inare seeing declines hospitalizations in the u. S. , which helps sentiment. , relations between the u. S. And china always helps. These make for a good combination of risk on tone today. About the mlivk question of the day because this could be the question of the day on a lot of days. Our inflation concerns building in markets . We have had a lot of comments about it the last few days. What are you hearing now from clients that respond . Kristine we are hearing a little concern about it, not necessarily because inflation markets are running away. It is really not. The direction of travel is pointing higher. What is different this time around is we are seeing inflationbased measures in wekets responding to what are hearing from policymakers, whereas before we were in a situation with a fed and ecb were trying to have Inflation Expectations without any luck. This time they are heeding what we are hearing from policymakers. And the broader complex of real yields falling to record or near record lows, all your usual inflation hedges such as gold are hitting unsustainable levels. This creates that nervousness that even though we are not seeing real economy inflation at the moment, the question is when it eventually comes, will there be ways to deal with it . Anna thank you very much, aquino. Kristine European Equity markets are driven up 1. 7 on the stoxx 600. That is it for the European Market open. Surveillance is next. Stock split hire is a u. S. Coronavirus hospitalizations dropped, even as coronavirus cases top 20 million. President trump because capital a Capital Gains tax all eyes are on tomorrows gdp data. And lebanons government resigns amid