The declines in technology and real estate shares on the stoxx 600 and then the Pound Holding on to declines we saw yesterday as figures show that the u. K. Economy contracted more than any other in europe in the Second Quarter. Plenty more of markets shortly now lets get straight will raise more questions over the governments handling of the pandemic. There are worrying signs the bounceback may run out of steam. Hard times are here. Hundreds of thousands of people have already lost their job and sadly many more will. But i will say to people, although tough decisions lie ahead for all of us, no one will be left without hope or opportunity. Up ina plans to bring tiktok in talks with the u. S. It is likely to take place as soon as this week. We are not certain what beijing hopes to achieve when bringing up the app. It comes just days after President Trump signed a ban on transactions using the app on National Security grounds. Protests in belarus. Protesters took to the streets to have claim of an election victory. Hong kong media tycoon has been released on bail. He was arrested on monday and there is a new National Security law accused of he has n with foreign long been critical of beijing. Global news 24 hours a day on air and powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine . Francine thank you so much. Lets get the latest on the u. S. President ial election. Joe biden has picked senator Kamala Harris to be his running mate. She is the first black woman and Asian American on the president ial ticket. She is of indian jamaican heritage. She had long been considered the number er for two spot. Thank you so much for joining us. When you look at the pick for Vice President , how will it change joe bidens campaign . Well, i think the view with the harris nomination is it wont fundamentally change bidens campaign. He is ahead in every single tracking pole. By any reasonable standard he is winning now. That is a very different thing from winning in november but he is winning and has been winning. The first rule of politics is when youre winning, dont rock the boat. Harris was the obvious choice for a number of reasons. She had positioned herself very well to be the v. P. Choice. She had been the bookmaker favorite for sometime now and i think biden took that axiom when youre winning, dont rock the boat to heart. I think it will generate some parts of his constituency. Especially in wake of the george floyd protests, the fact that he put a woman of color on the ticket is very important. He has tried to find a middle ground between the Progressive Party and the more moderate party and his concession could be somewhat left of what democrats have been taking on policy along with his pujols policy on the virlte and economic stimulus. Francine if you look at the joe biden strategy so far, is it the fact that he is winning or President Trump that is doing so badly . We vn havent really heard from joe biden at all. Well, we havent heard from joe biden much because there has been so much going on. He has been giving speeches, attending political events with a certain amount of caution. Coronavirus and he is trying to model good behavior. You can see him in public wearing a mask in contrast to trump. Ere is also the nap olian never interrupt your opponent hile he is making a mistake. They dont trust him on handling of race relations, and the comm has been deteriorating and biden has been leading him on n some poles on that front now. The strategy is to give trump enough rope and i think that so far has been we still have lakeeffect of time to run until november but it is not that much time and the conventions come up in a couple of weeks and after that absentee ballots will start to be directed. Portion of the vote will be made before november. Or biden to stay in this position, the pick of harris reinforces that strategy. Rancine do you 100 trust the polls . There is little evidence of a shy trump vote. The polls in 2016 did actually predict the National Vote effectively. There was polling in the crucial states that slipped to trump, michigan, penl. Those polls were off. That is different from saying all polls all the time are wrong. The big caveat is this is going to be a very, very unusual election. Were in the midst of the pandemic. There is Economic Contraction and uncertainty. President trump is aggressively trying to reduce peoples ability to use mailin ballots which may impact his vote. Well change the way votes are counted. So francine i think we just lost jacob. Well get back very shortly. Lets talk about u. S. Assets and risks going on to the november election. Joining us now, the managing director at Goldman Sachs private management. Thank you so much for joining us this morning. When you look at some of the risk factors out there, how do you look at the u. S. Election and how does that change some of your Investment Advice depending on what administration get in november . Good morning. Thank you for having me on this program. Ve a long time view of and we keep remming clients having overexposure to assets. We dont see the election as being a shift perspective that are obviously two main things that we think the markets and our clients will be focused on. Bind l be the administration in office and second, what would happen to the dynamics between the u. S. And china and the relationship. There irst, what we is not much of a difference between a democratic or a republican president. Is the impact on the u. S. Quity markets. Despite the fact that our the possibility of tax hike in the u. S. , particularly corporate taxes, our view is at biden is likely to pursue he tax agenda. The economy will still be weak from recovering from the pandemic. There seems to be a widespread view that fiscal policy needs at emain if you look current debate in congress, the republicans and democrats differ on the side of the stimulus package where democrats would even if there were to be some tax it continues to support the economic francine i was going to ask you a bit more about the trade tensions. How does it play out under a Biden Administration . Are we doing with to see more antagonizing of china or less than what we have seen from the Trump Administration . When we think over the structural issues that are going on between the u. S. And china not just in trade but also in technology, the democrats and the republicans in the sense that there is a idespread willingness to change the relationship. The r what can change is new relationship that is put in place. Trade reduce the relationship between the u. S. And china. More focused on trying to get playbook, technology. That could be a possibility for the market. Our own Research Department is basically estimated very interestingly that about 10 billion increase on the chinese goods. 2019. Something around 1. 2 of the s p. If the west can be less with he relationship, that could be welcomed by the u. S. Dollar y the u. S. Increases, the japanese general and depreciates as a consequence. Francine thank you so much. Up next, britain in recession. The u. K. Economy up more than 20 . Well talk about the countrys outlook next. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. Im Francine Lacqua in london. The u. K. Economy was hit harder than the other major european nations during the coronavirus lockdown. T saw a 20. 4 contraction. It raises questions over the governments handling of the pandemic and puts it under fresh pressure to deliver a recovery. Were joined by our guest from Goldman Sachs private wealth management. The u. K. , how uch impact will this economy take . It can continue to underperform. Stronger than what we were seeing in the u. S. And when we look forward, we think that that the u. K. Economy will continue to recover but at a slower pace than other major developed countries. Now the recovery the largest , the in activity lockdown was longer but there clearly there could be a rebound. We will not 2020 be at the level that we had been. Now these the u. K. Economy is not new. Ou said, there are two brexit and we have seen that before the less referendum. The u. K. Was one of the best performing developed countries. What we expect. We expect the recovery would be bolstered by policy stimulus on the monetary fund. We expect the bank of england to continue to pick up pace. So think that brexit eing able to trade goods and so there having to will be some consequences good will arly any be far less comprehensive and thats it was under the single market. Trading think that the it is not francine when you look at the 10year treasury yield, it jumped the most since june. We are expecting a lot of corporate debt issueance. It had supported gold for example. How do you see treasuries developing from here . We have a very gradual increase that is an increase in treasury yields. You have offsetting valuables here. There is going to be an increase in issueance. We have a very accommodative monetary policy. Ontinuing q. E. Clients are beginning to take some exposure to a steeper u. S. Curve. We have started the trade recommendations. Think over the medium term, he economy will recover. Inflation will get closer to the policy rates target of. 5 . Francine thank you so much. Managing director of the Investment Strategy group at goldman strategy group. Coming up, the chancellor warns there will be many more job losses in the coming months. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. This is what the markets are looking like today. Edging higher partly due to bond yields climbing globally and a little bit of a feeling that well get some kind of stimulus or certainly that maybe the markets are focusing on some of the advancement in terms of vaccine or medication. Gold snapping back after dipping briefly. Looking at some of the bank stocks. The European Bank stocks gaining 1 . Hsbc offsetting the decline in technology. The Pound Holding on to the decline cred. We saw some Economic Data showing that the u. K. Economy contracted more than any other in europe in the Second Quarter. Up next, exit on Corporate Finance outside europe and a major restrasburg of its corporate and Investment Bank. Well hear from the dutch lenders chief financial officer. That is coming up shortly. 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. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Bloomberg first word news with leighann gerrans. Democratic president ial candidate joe biden has picked senator Kamala Harris as his running mate. She becomes the first black woman and first asianamerican on a major party ticket. Harris is known as an aggressive campaigner. She has a legal background as District Attorney of san francisco, then California Attorney general. The u. S. Is risking oversis at the u. N. Sanctions. Restrictions were eased after the nuclear deal that President Trump quit more than two years ago. Russia and china have threatened to veto the proposal. U. S. Allies germany and france may side against it. Hows Economic Advisor larry kudlow is dismissing concerns as tensions may jeopardize the u. S. China trade deal. He says the agreement is fine and that china is substantially increasing purchases of american goods. The deal in january paused trade war between washington and beijing, but their relationship has deteriorated since then. After last weekss explosion, the United Nations is sending grain to lebanon to avert a to avert a food crisis. On august 4 tour through major grain silos in the capital, leaving the country with only six weeks of flour. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Francine thank you so much. The u. K. Has entered its deepest recession on record after a Second Quarter slump with the economy contracting 20. 4 . Chancellor rishi sunak confirms says the Data Confirms that many more jobs will be lost in the coming months. Joining us is paul dales. Great to have you on bloomberg surveillance. What does that mean for boe policy Going Forward . Paul well, i think it means the bank of england will have to do much more than the Financial Markets currently expect, so i get the since that the market by 100 billion pounds by the end of this year. At capital economics, we think it will eventually do 250 billion pounds in three steps. So the message here is that although in some ways the recession is over because we know output is growing, it is going to feel like a recession for a long time, and i think policymakers will have to continue to give the economy or support. Francine is qe enough, or with the bank of england go into negative rates . Not completely rule that out, but the bank of england sets a fairly strong signal last week that it does not think it is going to use negative Interest Rates soon, or at least while it is worried that the banks are on the hook for loan losses. So for me, that probably rules out negative Interest Rates for the next six months, maybe the next 12 months. But it could be used at the latest stage of the recovery when the recovery is well underway, banks are doing ok, and the economy needs a bit of a burst. I think the messages that there is going to be more policy support. The bulk of it will come through qe, but there is also going to be a few other things thrown in their, probably Forward Guidance in the and the like. Package measures rather than focusing on one policy such as negative Interest Rates. Francine what does this mean for pound . Think the global influences have certainly helped the pound in recent months with the weakness of the dollar, having raised it to 1. 30 against the u. S. Dollar. Our forecast is that it takes another leg up, so about 1. 35. That is based on our assumption of brexit. That whole thing we used to talk about, before the coronavirus came along. Our assumption is there will be some kind of brexit deal at the end of the year, probably a slim trade deal, maybe a foot here or there, and that could be enough to give the pound a bit of a boost. Even if the bank of england were to loosen policy much more, as long as there is a brexit deal at the end of the year, the pound could at the end of the 1. 35 againstound the dollar, perhaps 1. 30 against the euro. Francine how do you view yield curve control and other things the bank of england to do before going into negative rates . Paul it is one of those things that we have all talked about, and i would not rule out anything. Over the next six to 12 months it would be clear that the Central Banks around the world will do more and become increasingly innovative. At the bank of england is not very keen on yield curve control, and you could say there is not much point at the moment. We know real yields are low across the curve with the 10year yield around below 25 basis points at the moment. So unless you are going to target yields much lower than that, youre not going to get much bang for the buck for it. You could be on the hook for buying huge amounts of assets to maintain that yield curve target. So i think the main policy talk will come alongside other forms of Forward Guidance, and that is going to be quantitative easing, and that is why we think quantitative easing could be extended by another 250 billion pounds. We take the stock of asset one trillioner ounce. Amro announced a major restructuring this morning, the dutch lender set to cut a third of its Investment Bank and start stop providing Corporate Finance outside of europe. We have been speaking with the cfo, clifford abrahams. 700 million is a decent amount, which is why we are breaking even for q2, but those provisions, we are down in q1 and we expect impairments for the second half of the year to be below the first half of the year, so it is possible we peaked for this year. We expect impairments to be elevated next year, likely down on this year. We are hopeful we have seen the worst in terms of overweight impairments. About thender Investment Bank performance in the quarter and your plans for the division for the units in the future. Clifford our Corporate Bank outside europe had a tough quarter, so most of those provisions, that 700 million, was in our Corporate Bank, and a lot of that was in our global business. Our plan for that business Going Forward outside europe, we tend to wind down that business, and that is about 10 of the group. That reflex our decision to focus the bank and the Corporate Bank on our home market of the netherlands at northwest europe. We want to derisk the group to a moderate risk profile and allied the whole group to a common strategy, so we want the Corporate Bank to work closely with our other businesses in europe, and here in europe we will invest in and grow those businesses. More focus on the european business. Part ofsee the selling the business that you will take three or four years to wind down . Clifford that business is around 10 of the group in terms of capital. We will work with those clients and take our time and what is still a tough environment to wind down a business, and we will do that to do the right thing for our clients. Beexpect the wind down to capital accreted over that period. Matt the ciba had some very large losses on individual clients recently, clifford. How is it possible that ame that abn amro was involved in so many writedowns, and what are you doing regarding controls and that business . Clifford we are a big bank that operates around the world, so we have seen perhaps more than our fair share of issues. We have taken a good hard look at our Risk Appetite. Across our businesses, particularly in the Corporate Bank, and tightened up a Risk Appetite where necessary. As you can see, we are derisking further some of those businesses where we have seen elevated impairments in the past. Was cliffordt abrahams speaking with us earlier on. Coming up, moderna will distribute 100 million doses of its experimental vaccine for the coronavirus in the u. S. This is bloomberg. Francine this is bloomberg surveillance. Lets get to the Bloomberg Business flash with leighann gerrans. Leighann investor carl icahn billionng a 1. 3 windfall from brickandmortar retailers, started making the and itre short in 2019, paid off in the first half of this year as the coronavirus led to even more store closures more consumers shopping online. A major deal could be on the horizon for brookfield. Sources tell bloomberg the alternative asset manager is in talks to buy blackstones stakes in Shamir Energy partners. It is holding in the its around in the company is 8 billion. No official word on the deal yet. Microsoft is delaying halo infinite, the biggest video game plan for the november lodge of its new console, partly due to the challenge of working from home during the coronavirus crisis. The delay of the latest entry in the multibilliondollar halo franchise may hurt sales of the xconsole. Eries, that is a Bloomberg Business flash. Francine the battle against coronavirus, russia has said it has improved to the first vaccine in the Coronavirus Vaccine. The u. S. Has reached a deal with moderna to provide 100 million doses of a potential vaccine. That is alongside the deals it has signed with pfizer and johnson johnson. We are joined by bloombergs Health Care Reporter, james. What do these supplies mean for the rest of the world . James good question. Countries are not waiting around to find out which of these vaccines are going to work. We have seen the Trump Administration, the u. K. , sprint ahead to mark up hundreds of millions of doses of future vaccines. The e. U. And japan also signed recent yields. The moderna announcement is only the latest. The economies had already secured more than a billion doses. That number is only growing, so clearly, Health Advocates and some poorer regions are concerned that the rich countries will put their own interests first year, and a number of groups are working hard to tackle that issue and them from being at the back of the queue. W. H. O. And global groups trying the equitable deployment of vaccines. There are still questions about the pace at which the rest of the world will get access, so this trend is only going to continue in these issues will heat up in the coming weeks and months. Most people believe it is going to be an inevitable supply deficit. We are talking about a world of 7. 8 billion people, so who will get the vaccines and how soon our crucial questions. Francine how are vaccines like moderna actually being priced . James the pricing is a complex one. Moderna will be selling its thatne in the u. S. Deal roughly 15 per dose, 30 for a twodose regimen. The companies are receiving close to a billion dollars in assistance. That is one of the key factors that the sides had. You mentioned the visor deal. Pfizers prices are slightly get. Than what they will a number of companies such as astrazeneca have pledged to profit during the period of the pandemic. Companies are taking different approaches. Sums some will pay off in terms of reputation and longterm benefits. Others like moderna are clearly keen to earn return and keep investors who bid up the share price happy. The industry has been slammed in the past for charging high prices, and given the global billions are being poured into these efforts. It remains to be seen whether that support is going to be reflected in the prices. Many people, whether it is advocates, investors, governments, they are all watching this issue very closely. Francine thank you so much, Health Care Reporter ames patton. James payton. Operating profit better than billion at just over 39. Be respecting a 35 billion euros a 35 billion you uan figure. Monger term forccine is needed restoring confidence in leisure travel. With alix steel and guy johnson, uncertain about the travel industry, how it will fare post pandemic. Certainly people are seeing inngs better than the lows april. Ertainly things have improved that being said, so we get a vaccine or prospective treatment, travel is going to have some issues. Things are better than they were, but we are so far away from those occupancy numbers. Hotels are not profitable. So what we really need is that safety. People want to feel it is ok to travel. And the thing that will help us get there is the vaccine, and hopefully will see something in the not so distant future. Is the worst behind you, do you think . Where do we go from here . Is it better or is it plateauing now . What kind of trajectory do you think we are on . Glenn i think people are talking about different flareups and parts of the world, where places have been fairly good, but now all of a sudden they are there are more infections. You look at australia and some of the issues in hong kong, there are parts of the world where things were great for very good at now they are not so good. Even in europe, you are seeing a bunch of flareups here and there. I think we will be on a bit of a roller coaster for quite a while. Until we get that vaccine, we need vaccine or some sort of trade because when you read these things, the terrible news items, when people are still getting ill, unfortunately some people are not making it through it scares people and people want to feel safe. Alix all of that leads to hash burn, etc. To cash burn come etc. You are cutting some workforce. How many levers left do you have to make it through until there is a vaccine . We did raise over 4 billion, so we felt good about that. We are feeling comfortable in terms of wherever Balance Sheet is. We have no problem getting through this crisis. That being said, what will the other side of the pill look like . What is going to change in terms of the industry . You were mentioning business travel. Business travel does provide a lot of revenue to some of the big chains, and certainly the front of the airplane is where those airlines are paying those big fares. What is going to happen . Will people go on those business trips the way they did in the past . From our point of view, where much more leisure oriented. There is a Silver Lining for us because when there is a lack of demand, those people on the supply side are more interested in working with adjuster like us to fill that empty seat on a plane or empty room in a hotel. That is unfortunately a little helpful to us. We dont want it that way, but that is what is going to happen. Francine that was the Bookings Holdings chief, glen vogel with guyel, speaking johnson and alix steel. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets get to another of our top stories on tesla, putting its pricing shares in a five for what exchange, each shareholder on august 21 will receive a of additional shares for each share they already own. Joining us to discuss all this is dani burger. First of all, what is teslas thinking in issuing the stock split . Is then one way, this management signaling confidence they think shares will go higher from here. Stock,g this, tesla which is trading just under 1400, if it stays around the same valuation, will be about 300 per share. It also means this is a benefit to retail and other Small Traders who otherwise had trouble affording tesla stock. This should not really affect the price in theory, because the value of tesla as a company itself is not changed by splitting its stock. We do know that the retail crowd tends to favor tesla. Robinhood, for example, the trading app based in the u. S. , has 550,000 accounts that hold tesla, up from 180,000 back in march. Also a signal to them that it is safe to jump in and buy more shares because it is now cheaper just to buy an individual share of tesla. Francine apple also split stock recently. What was the ultimate effect of that . Dani about two weeks ago, apple split shares in a four to one exchange. We saw apple shares reached a record high. It was also around a positive earnings result, and this follows in the positive footsteps we have seen in the past with Companies Like alphabet, for example, also splitting their shares. Amazon did something a wily go as well. It emphasizes that as you look at these tech stocks, they have pricing evaluations pricing valuations, pricing share, and they think those share prices can go higher, francine. Francine thank you so much, dani burger with the latest on tesla and some of these stocks being split. Wequities are being are seeing them on a trend with european stocks after gold rebound, finding a support level around 900 a bill. Bloomberg surveillance continues in the next hour. We also speak later in the day chair, bobston fed rosenkranz. Eric rosengren. This is bloomberg. Francine Kamala Harris wins the veepstakes. Joe biden picks the california senator to be his running mate. Harris becomes the first black woman and first asianamerican on a major Party President ial ticket. A record slump, the u. K. Economy shrinks over 20 in the Second Quarter, worse than its european peers. The chancellor, rishi sunak, warns of many more job losses to come. And vaccine deal, moderna will manufacture and distribute 100 million doses of its experimental Coronavirus Vaccine in the u. S. Shares jump in extended trade. Good morning and welcome to bloomberg surveillance. Im Francine Lacqua in london. Lisa abramowicz stepping in for tom keene in new york this money. Great to have you on the program. There is so much to talk about when we look at gold finding that support around 1100. Lisa we are also going to take a look at the Political Landscape around the united states, with the democratic candidate firming up what it is going to look like. A big question about political
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