Obama. Plans. Adens we will bring you our interview with the ceo. Asian stocks edge higher after break a500 fails to record at the close. European futures point to a negative just over an hour away from cash trading in europe. Atures suggest we could see lupita of ever treat a little bit of a retreat. They just went up for the morning. We were flat and positive across europe. , we faileded states to make a new high at the close even though we traded above those february high levels. There, wouldd got there have been the breadth to make it mean that much . We have gothe gmm, south korea, closed yesterday. Broadly speaking, we are flat and positive across the asian equity segment. Drift, whether it is asian stocks, u. S. Futures. The dollar is drifting. Making some moves to the downside. Treasuries a little higher, yields come down. Still questions around u. S. Stimulus, an unanswered question for Global Equity markets. Some breaking news across the bloomberg. Persimmong sector, saying first half pretax coming above4 million pounds, the estimate of 274. Excellent start to the second half. Wasnstruction industry that roiled by the lockdown. It did not take long and they were back to it. Perhaps making up for lost time. Ticked upg market has as a result of shifting demand patterns. Also we have seen, supportive government. In the retail space. Some jobin the u. K. , reductions. 7000 rolesf about over the next three months. A structural change that predates covid, the demise of high street retail. Clothing closing on homes significantly down but improving. He really top stories here are the top stories we are covering. The democrats are holding a convention. It started with a series of attacks on President Donald Trump Michelle Obama made a personal endorsement of joe biden. Canadas finance minister has resigned after a rift with Justin Trudeau over the response to coronavirus. Trudeau did not immediately name a replacement but sources tell bloomberg that he will not be former bank of England Governor Mark carney. A uturn over a downgrade. They have determined to let the results be determined by teacher assessments rather than an algorithm. It comes in the face of outrage from students and parents. The education secretary admits there with unfairness in the system. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Oil jumped to a fivemonth high. U. S. Crude stockpiles in easing. Gathering. Pecplus markets witho the editor whoe, our joins us from singapore. The question you have been throwing around is what would it take to get oil back to 70. It might be surprised to some that we have not seen more weakness in the oil markets. What is your assessment . Mark i think the way you are looking at it is exactly right. I dont think we ever get back beyond that 70 per barrel. I think the only circumstance is if we see severe dollar weakness, just because it is priced in dollars. The longerterm story is that oil prices are in inexorable decline. I think that each year we will see progressively lower highs. Maybely hold except for brief spikes. Generatedobably risk, a bit of weakness by increasing supply little bit too quickly. The northern as hemisphere moves into winter, whether we will be able to avoid any wider lockdowns. The stock story in the United States, the s p family to create to create failing a new high at the close. Volume was low. Breadth not what it would be in other months. Do, we make it and if we does it matter . I think it will matter. It is a really important psychological signal. The headlines it generates for retail investors. It is really emphasizing get again to a newer audience, the idea that this stockmarket rally is looking impervious to everything thrown at it. Makenk, if we actually closing i, that is a big message. I am slightly worried by this rally still. Risingtimulus deal, u. S. China trade sessions trade tensions. It continues on impervious. There is not been a drawdown of 2 for a month now. One way to look at that, nothing can harm it. I would say that all these flows are harming the market. Ages will make it more vulnerable. I still am worried for the last couple of weeks of august. Anna vulnerability is interesting the extent to which the market is pricing in fiscal progress. , ifthing that caught my eye you have a risky looking portfolio, you are talking about two parties that cant agree right now on the price of a stamp. Do you think the market is expected in fiscal deal to be done . Was i think the market definitely expecting a fiscal deal they month or so ago. We may not get a deal until the market corrects first. Because the market seems to be trading fine, there is less pressure on either side of the political divide to reach some kind of compromise. Therefore, the stock market andts trading negatively the stock forces both sides back to the table. Certainly everyone at the moment seems quite relaxed. Thanks very much for joining us, mark cudmore bloom gorbach at live managing editor. Loomberg market life managing editor. The dollar slides. We will speak to the head of fx strategy at bank of america. This is bloomberg. To theelcome back European Market open. Until the45 minutes start of cash equity trading. Lets get a business flash. Some of the top corporate stories we are covering. Oracle is entering the race for tiktoks u. S. Business. The move may complement make complicated microsofts attempt. Investors include general into gant Sequoia Capital. And sequoiatlantic capital. Bp mike of bhp is making a push to shake up the portfolio. A transition to copper and nickel to meet expected demands from Renewable Energy and electric vehicles. Softbank has invested nearly 4 billion into 25 of the worlds Biggest Technology companies. The softbank founder is expanding the companys activities and tech stocks. Last week, he unveiled a new Asset Management arm. That is your business flash this morning. The dollar is extending declines. Chances for a comprehensive stimulus deal before september diminish every day with neither side willing to make concessions. Democrats and republicans turn their focus to their party conventions. On the first day of the dnc, speakers attacked the president. Good morning to you. Thinkghs of march, do you dollars selling is overdone and if so, why . Definitely short, particularly a stretch position according to many indicators. You wouldnt try to catch a falling knife. Is bearish on the dollar. A market that is trying to find excuses to find the dollar. We are not far at this stage. Driven by thet assets, effectively the same trade. Theill determine whether dollar selloff can keep going. Anna you see a number of reasons why may be the risk rally has gone too far, why the dollar selling has gone too far. The Global Economy is one of them of course. But you also see the market as to complacent. How would you be setting up for fx as we head toward november . Thanos giving the high uncertain the the high we believe that the market is too optimistic on the global recovery. We believe that the market is too optimistic on when we are going to get a vaccine. And also, the u. S. Election is the big known unknown. Market willn the increase before and after the u. S. Elections. Highruth is that there is uncertainty about the policies after the election, no matter who wins. Some of them are good for the dollar some are for the dollar. Areor the dollar, some negative for the dollar. Anna is there anything you can do about that volatility that you foresee . A number of fx commentators talking about volatility into november. You have a strategy around call. Puts and again thanos we like to be short dollaryen. Short euro again. In volatility, we like dollarswiss and euroaussie. That globalms of Economic Growth story, if you think the market has sold off the dollar too much, why do you think consensus is positive risk assets and why are you not . Thanos the expectation is that Global Growth this year will be 8. 9 . 5 . Mf and world expect these are huge differences. The market us that is pricing a scenario of a vaccine by the end of next year and this will be followed by a vshaped recovery. We believe the timing of the vaccine will be uncertain. Whether we get at this year or next year makes a huge difference because you have the winter in between. A lot of permanent damage that has already been done in the economy. In the data we have seen during the reopening, which is just because of base fx, a much weaker recovery in the months ahead. Anna you might able to get a vaccinate a little sooner in russia. Let me ask you a little bit about havens. You have mentioned some of your trades around volatility. Which other havens do you had for . Do you like the swiss franc . Thanos the swiss franc is overvalued but it is still correlated with risk sentiment. The very bullish Market Sentiment on euro. Infections have started rising again. We believe that infections in europe remain well below the u. S. , the european economy is still suffering and cannot really go back to normal. We also believe that the market is way too optimistic about the fund. Will not beis money available now. 20232024. Will be from this point of view, the swiss franc given this risk ahead of us. Anna thanks so much. G10 fxvamvakidis head of strategy at bank of america. We will turn our attention to europe next. Looking at its jobs scheme with sharp growth expected. This is bloomberg. Anna welcome back to the European Market open. 40 minutes to go until the start of cash equities trading. Futures little weaker. U. S. Futures look flat at this hour. Germany is looking to extend its job support scheme. The finance minister proposed running subsidies for two years instead of one, saying the measure would cost the government an extra 10 euros. The furlough scheme in october. The head of g10 fx strategy at bank of americas still with us. Difficult for the german strategy to cut through and affect the euro, perhaps. But which of these strategies seem sensible to you, extend these furlough support schemes into the future or cut your losses . Exactly blacknot issue. Definitely, germany has the fiscal room to do more. They were very conservative fiscally before this crisis and they have been doing the right thing finally. Economies, these next round of fiscal stimulus has to be much better targeted. This is relevant for the u. K. And u. S. The first round was just trying to keep everybody above water. And absent fiscal concerns debt issues, Going Forward, much better targeted, more sustainable, and also to address any moral hazard concerns. Anna has the euro run as far as it is going to run on market excitement around the Recovery Fund . Does it justify further gains in the euro . Thanos i think of the positive side, the Recovery Fund is muchneeded fiscal stimulus. Grantst that it includes is important solidarity in a very important moment for the european economy. It to bet has taken something much more than that, evidence that this framework can also address the longterm. We do not know the answer today but we think this is completely wrong. Fundly, the recovery cannot be used to support from this point of view, looking beyond this pandemic, we are concerned about sustainable debt levels, particularly when they stop the fed program and the fiscal rules will be reintroduced. Anna briefly, your thoughts on the pound. Were talking for the past five years about brexit. Covid19 pushes that to some extent of the agenda but it looms large toward the end of this year. Bearish inould be the shortterm. The recent rally we have seen against the dollar. The pound of a risk of market direction given the u. K. s large current account deficit. The recovery would be slow. Looking to next year, if we do get the correction, more positive because we do expect a trade deal between the u. K. And the eu. Anna we will look to that toward the end of the year. G10 fxvamvakidis head of strategy at bank of america. We speak to simon french. More on u. S. Politics coming up. This is bloomberg. Anna welcome back to the European Market open, 30 minutes to the start of the tuesday trading session, shares weaker, 6 , u. S. T 4 , 5 6 , futures flat, even negative, the nasdaq flat with the futures market. Lets take a look at some of the key events that we are looking for this week. The latest round of brexit talks between the u. K. And the eu begin today, as we were just and ag about with thanos, guest joins us. The former National Security adviser to President Trump, john bolton, speaks to the National Press club later, and there will be an Online Meeting to review strategies when it comes to oil supplies with opec, and we will question whether we will ever see 50 a barrel oil again. Also on wednesday, european leaders will meet by Video Conference to discuss sanctions on belarus. On thursday, chinese tech giant alibaba posts First Quarter results, and then football returns or soccer, depending on where you are, with the league kicking off with marseille playing at 6 00 p. M. U. K. Time. Drift aftertures the s p 500 fails after another attempt to break a record high as a deal with congress that renews the comprehensive diminishesckage every single day. The democrats and republicans are focusing on their conventions. Today, it was the democrats. Senator sanders for those who may have voted for donald trump in the past election Governor Cuomo they want to watch new york suffer, and they learned absolutely nothing. Ittoday, six months after began, the nation is still unprepared. A nationalif we had strategy, so everyone who needs a test get ones gets one for free. Than 150 thousand people have died, and our economy is in shambles because of a virus that this president downplayed for too long. Senator sanders the truth is, even before President Trumps negligent response to this pandemic, too many families have been caught on an economic treadmill. Joining us now is our Bloomberg International editor, jodi schneider, with analysis. Was the most important speech . We heard there are number of democratic voices speaking at the convention. What was the most important voice, do you think . Were two thatere were very important. One was Bernie Sanders that we heard, because democrats would like to unify the party, take that left wing that rally for Bernie Sanders and get them in the house, get them to vote for joe biden in november, and Bernie Sanders is very important for doing that. Did not rally, he behind Hillary Clinton, and it cost her. It cost the democrats. And this time, they want to make sure that does not happen, and Bernie Sanders stepped up. He said he disagreed with president Vice President biden on many areas, but he does think he is the right person for the moment, and the speech that mattered as much if not more is Michelle Obama, the former first lady, who came out and not only supported joe biden that made the case of why it is so important to elect him, basically criticizing donald trump, saying donald trump is clearly over his head, is unfit for office, is the wrong andident at this time, those are the words that the democrats are hoping they will remember in coming months as they try to take on the incumbent president. Yes, it seems a lot of what was happening at the dnc was about party unity, and as was the case a few months before the election about reaching across the aisle, about trying independentany voters or republicans who are unhappy with President Trump to come over, like with john kasich. Is that something that was resonating . The theme,that was but you are right. Perhaps more than in previous years, democrats are reaching out to republicans, saying, we understand you are republicans, and we are not saying you should not be republicans, but do not vote for donald trump, and here is why. They are going to be making that case, not only for moderate republicans, but also in the swing states that they want to win. They use that card, john kasich, also a representative from new york and two women who had democratic president ial candidate Hillary Clinton in 2016, and a tech executive, meg whitman, and former governor, whitman of new jersey. All of them making that case. So they are trying to widen that to get some republicans to go along with them. Of course, this is the democrats that, and then it will be the turn for the republicans in a few weeks. Anna how these messages go down. So much. Nk you jodi schneider, we will hear more from her in the couple next couple of weeks. Back to corporate news, and elon musk is now the worlds fourth richest person, tesla shares up, boosting his net worth by almost 8 billion. Just one day. Joining us is dani burger with more on the stunning development. Dani it is really difficult to wrap your head around how much musks net worth has increased, nearly tripling since the start of the year, so now, his net worth is above that of bernard arnault, and that means that the allest inner people are in america, including Mark Zuckerberg and behind him now elon musk. About 20 of tesla, he owns, so no doubt, his wealth is tied up with the shares, which have gained about 300 40 yeartodate. A lot of that is the enthusiasm that it might join the s p 500 index, but also, we have seen a huge retail audience jump behind tesla. Now come he also gets a substantial part of his net worth from spacex, as well, but also, his compensation package when it comes to tesla is tied up partially on the market cap of the company itself, so every time it hits a milestone, he gets more stock options, and that is really a huge reason why we have seen it accelerate. Besides just bezos jeff bezos, elon musk has seen the greatest rise this year. They have come under a lot of scrutiny this year with tech executives, where their wealth has increased whereas america has gone through economic strife. People are unemployed. People are closing down. And congress has grilled a lot of the tech executives, and now with this increase in net worth for musk, will it also put the lens on him to see just exactly how that unfolds . But for now, it shows no signs of slowing down, anna. Anna yes, tesla. Next stop, walmart. A really interesting development. Dani burger on the personal fortune of elon musk. Coming up on the program, has the coronavirus led to a green revolution for minors . We will hear from the ceo of the mining giant bhp for his plan for a reader future, albeit continuing with some of their coal businesses. This is bloomberg. Welcome back to European Market open, and what 20 minutes before trading, and the futures European Market open, 20 minutes before trading. Lets get a Bloomberg Business flash update for you, some of the top stories we are covering for you at bloomberg. Boeing is planning more cuts than their original 10 target, looking for a buyout from their employees for a second time this year. And there is a declining demand for jets. These are hard but necessary, the layoffs. Regulators, a wall street bank mistakenly paid , describingillion it as an operational mistake. Some have returned the money, others have not, and they are now suing those who initially refused to return the money. , a trading firm recently valued at under 9 billion, but that was because it posted record trading figures for june, greater than any of the publicly traded rivals. That is a Bloomberg Business flash. Now, the worlds top minor, bhp, announced steady profits despite miner,the worlds top bhp, announced steady profits despite the pandemic. They talked about going green. Think we will see a lot of volatility and uncertainty and the way the rest of the rubber covers, and our broader Economic Forecast is for it to take about a year to get back to before covid levels of Economic Activity and two or three years to get back on the trajectory that we otherwise would have been on. But that is the broad economic outlook. In terms of iron or itself, demand remained strong in china. To be holding up quite well. Of course, on the supply side, we will see more supply coming from our competitors, and our strategy of being the lowest cost supplier, continuing to improve quality, and delivering Continuous Improvement year in and year out, that is a winning strategy. Or pricesexpect iron to average 100 a ton next year . I would not want to give an exact prediction. In, we supply comes could. But bhp is a diversified resource company, and we have got other portfolio items. We expect that will result in, perhaps, more, so the resilience of the portfolio that we have, which has helped us see through the last six months of covid, is going to stand us in good stead Going Forward despite all of the uncertainty out there. The resilience of our portfolio and our people will allow us to continue to perform strongly. Anyou are looking to make exit in coal. How confident are you that you have enough buyers and can get thereght price, or is investor appetite for a spinoff . I want to be very clear. This is an exit from four of our coal operations. We continue to see an upside to our coal. As steelmakers moved to reduce their carbon footprint, and with this utilization as one means of doing that, there will be more demand, so we remain committed to that part of our portfolio. We have other assets whose values will be realized through things like Capital Investment and which are unlikely to compete well for capital within bhp given our broader portfolio intent and the other options we have available to us. Now, as to how we go about doing that, we are open to all options. This gives us the ability to get out there and explore, either a trade sale or a demerger. We will land the right solution in the next year or two, and that solution will be the one that maximizes value for shareholders. Some oil and gas assets in australia. What is the plan for bhp in oil . We see oil as being attractive on the basis of both ongoing demand for oil, given its underpinning to human mobility and many of the industrial processes, better standards of living, coupled with, on the supply side, ongoing supply curves, which are a feature of the industry. There is going to be more oil supplied as needed. We see there is great value and returns in oil for the foreseeable future, certainly the next decade, likely beyond that, so we will continue to invest in oil and growing value returns. Anna that was mike henry talking to bloombergs haslinda amen. In mines meant closures and cutbacks while global shutdowns hit demand. Now, mining offers one of the best outlooks towards the recovery with commodities close lets dig down into the sector with bloomberg intelligences contributor with us. Green, but not totally out of coke and coal. It comes in many shades, green. Is this pivot just one of the challenges facing the Mining Sector . What are the big items facing the Mining Sector . Good. The challenge of facing covid19 and how that impacted operations, and i must say that i think to the larger cap mines have done a very good job in handling uncertainty that it brought. Implementedhey have very strict social distancing and testing protocols, and they have had to change a few things around to try to minimize contact. But when i look at performance, in some regions, bhp has done very well and actually had a record performance in the last quarter. Is i guess the second thing technology. These are trends. Is runninge, bhp their escondido mind. Mine. That is a cutting edge, and that serve to them very well. And things like having to commission to projects, with technical experts to inspect. So i think all things considered, the Mining Sector has done well with covid. Anna ok, so it has adapted. What about the finances . Itsave seen bhp changing portfolio, having to act nimbly, selling assets, but also still exploring, so what does that mean for dividends . Deleveraging since 2014 since the last dip we saw in the commodity cycle, so with this dip in the cycle, they all have very strong Balance Sheets, and bhp as an example is at the bottom end of the range. They have got a very healthy Balance Sheet. Or, there with iron is chinese demand and some supply disruptions, but demand has been very, very strong, so bhp is paying 6 billion for the third year running. The outlook is strong. That will be reflected on some income funds. A little just disappointing versus expectations, and this is where the caution comes in. I think even though the Balance Sheet is very strong, bhp and some of the other Mining Companies have opted to be just a little bit conservative to avoid any further volatility that covid brings. Grants, thank you very much for joining us with the analysis. He will be continuing the conversation on Bloomberg Radio at 7 20, a little bit later on. Now, coming up, we take a look at your stocks. And a british retailer is cutting 7000 jobs over the next three months. We will delve into the future of retail and what stocks to watch next. This is bloomberg. Welcome back to the European Market open with eight minutes to go before the trading session, in futures deciding lee negative deciding lee negative. Joining us is bloombergs dani burger. She has got a run down, and lets start with the u. K. Housing sector. positive numbers, and we saw the first numbers come in for profit, meeting expectations at about 292 million, and the estimate was million, and their order books so far was strong. Good news on the dividend front, as well, with an interim dividend certainly lower than theyyear, 100 10, however did cancel their payout at the beginning of the year, so the fact that they are proposing any at all is certainly a sign of progress. Yes, of course, the trouble for the Retail Sector predates covid19, but, my goodness, they have been made much worse, and another retailer in the u. K. Cutting jobs, m s. Ni their clothing arm has fallen in the left in the past weeks, so they are cutting 7000 jobs over three months, mostly through attrition and early retirement, but it really shows how much they need to cut costs, but so far, it looks like the market will receive these cost cuts, because they need to get it done, so shares higher about 3 , anna. And what about the guidance from pandora in the jewelry space . Seeing sales dropped about 20 , because they were up, more than 50 this year, but now, they are saying that what was a positive result in the market come what was progress, has now reversed. Its progress has stalled in the third quarter. They feel there will be a pretty negative share reaction to this just because the market needs to adjust and now needs to price in the following sales for what pandora predicts this year, anna. Much, dani you very burger. We will keep an eye on these things as we had to the start of the trading session or as we get trading underway. And the negativity with european 100, yourhe ftse stocks down around half of 1 . Euro stocks down. So this remains in focus. Do drift, butide they are increasingly pointing downwards. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Anna we are a minute from the open of cash equity trading this tuesday morning. Deadlock in congress. Senate republicans plan a butmed down stimulus bill democratic support looks unlikely. And joe bidens campaign gets a boost from Michelle Obama. A greener future. Coal. Oadens plans to exit we bring you more from our interview with the ceo. Higher as thedge s p 500 fails to break a record high. European equity markets are set for a negative open. Indexesfor the european pointing to the downside. Expected to be down by about 0. 7 . That is what the futures ftse futures suggest. Let us get into the markets and reflect on some of the drivers we have moving things around here. Concern around fiscal stimulus in the u. S. And the underlying virus as well. All regions to be all reasons to because this but that did not stop the s p 500 from trying to top its record last seen in february. A lot of interesting dynamics still resulting in a stronger equity market despite all of the concerns. We have the u. K. Market opening, down by 06 . Down by down 0. 6 . Markets are opening lower as the s p 500 stopped short of a record. Upped thedonald trump pressure on china over huawei. And democrats attacked the president on a number of fronts at the start of their Democratic National convention. Just one of the uncertainties the markets are dealing with. What does the u. S. Mean . People say there are some factors that would seem to be dollar positive and others that would be dollar negative. There are some real unknowns regarding where we put the dollar. It seems difficult to judge right now. They expect a lot more volatility. That is just one of the uncertainties we are dealing h in the Global Markets right now. , dani burger was telling us about the Construction Company and how it is sharing. Faring. Marks spencer is up over 2 as we care about job losses. 7000 positions to go at that u. K. Retailer. Bhp down. We heard from the ceo of bhp in the last 24 hours. Let us get an update on some of the news stories we are covering at bloomberg. A first word news update for you. Senate republicans plan to introduce a scaled back stimulus bill amid a standoff over a new virus plan. Among other things, the plan would include 300 a week in enhanced unemployment. And additional funding for the Postal Service. Getting democrats to support the scaled back plan seems unlikely. 25 billion of funding is to be added to the embattled Postal Service. It would prohibit cutbacks i head of the november election. The Postal Service has warned that election ballots to many state may not make it in time for the election. Hong kong later carrie lam says she is having trouble using her credit card. That after the u. S. Imposed sanctions targeting chinese officials in the city. She was one of 11 hit by the move earlier in the month. She says restrictions are totally unjustified. Israel says bahrain and sudan will likely be the next countries to make peace with israel. The are expected to follow united arab emirates. Israels president has invited the uaes leader to visit jerusalem. A trip that no other senior golf leader gulf leader has been known to make since the finding of israel. 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. We are getting some news coming through from norway. This is from the Sovereign Wealth Fund in norway where we look to see what they are doing with their Energy Exposure in particular but right now, we are hearing their topline numbers. 3. 4 ys wealth fund lost in the first half of the year. Where thatn terms of money was lost from. Some of our most recent live fromhas shown a the governor on that fund. We will get more details on where the fund lost 3. 4 . We have seen a lot of volatility in the market as a result of covid19. I was just about to say that coming up we would speak to simon french but simon french is with us. European equity markets reflecting perhaps on the uptick in virus cases across e urope, on the failure to pass fiscal stimulus in the United States does it fit strangely for you that we are talking about record highs while we are dealing with a pandemic and uncertainty . Simon it comes as no surprise to any of your viewers that there has been a sharp decoupling between economic fundamentals and the markets. That is not news. As we get more data, what is emerging is there are clear winners and losers. We are seeing strength and a number of real estate sectors around the world. Significantlyales around the world. And a lot of that is diverted demand. Spending that has been constrained due to social distancing leading to earnings upgrades in some sectors where there is a vshaped recovery going above year on year levels. The weaknesses, defaults, and writedowns across sectors where that demand is permanently impaired meaning you have a strict picture in terms of the economic sector but also the underlying performance of the risk markets. That is an interesting way of looking at things. When you look at the lack of progress on the fiscal side in the United States, and how they support benefits, what is your view on the u. S. Coming up with a seat will to the stimulus a sequel to the stimulus they have already put in place . Sequel. T is a difficult like albums and films, the second is more difficult than the first. Fiscal support, rather than being universal and effectively keeping the economy and the attachment between employers and employees in cold storage are now expected to support a transition to what might be permanent a permanent shift in demand. In the case of the United States, the closer we get to november, the more politics they are always relevant to bailout packages, become more salient. I expected a deal to be done early in august in terms of the cares act. To be innship seems short supply on capitol hill and that is a real problem for households. Net income is potentially permanently impaired. Anna youre not the only economist expecting that to come through in that time horizon. Some are telling me it is an election year. Asone wants to be seen standing in the way of supporting americans. , wehe markets live blog have been talking about oil prices. And the likelihood of oil prices ticking up again. We are at 45 a barrel for brent at the moment. Will we see 70 brent . The demand story is very uncertain, i suppose. Simon it is. I will answer your question directly i do not think we will get back to 70. I think there is a lack of cooperation between the opec and nonopec levels. The issue is it has triggered some quite significant inflation worries particularly in recent days and inflation protection has been taken on as a higher cost. Not because people are seeing but because we are seeing depressed levels. Oil will be the vanguard but there may be other demand sensitive sectors that will experience a significant uptick. I dont think it will be sustained. But a real challenge for some people or policymakers to watch trying to deal with what might be a significant bounce back in headline inflation. Anna simon, stay with us. Simon french from penn mayor gordon Panmure Gordon company. Talks resume in brussels on with either side standing their ground and seven weeks to go, who will blink first . This is bloomberg. Anna welcome back to the European Market open this tuesday morning. The trading session is weak across european stocks. Let us get a Bloomberg Business flash for you. Top corporate stories. Cuts spencer plan to about 7000 jobs in the next three months after its business was hit hard under lockdown. Last fell 39 in the quarter. Storesmain weak as reopen this summer. Coal. Planning to exit , mikees as the new ceo henry is making an urgent push to reshape the portfolio. The company is laying the groundwork for a transition to copper and nickel to meet expected demand from Renewable Energy and electric vehicles. Softbank has developed almost 4 billion into 25 of the world they Technology Companies including amazon, netflix. Expanding investment activities at record highs. Last week, it unveiled a new Asset Management arm for the business. That is your Bloomberg Business flash. On to brexit talks resumed in brussels with seven weeks remaining. U. K. Havee eu or the yet to budge with officials in both camps saying they are waiting for the other side to blink first. Simon french has spent much time like the rest of us to follow the latest moves. Issues surrounding fish, the irish border. Impactingou see this the markets . Do investors need to focus on this as we head to the end of the year . And will it be october or december 31 . Simon i am hopeful that october will be the moment when the grownups are allowed back into the room. It is good to speak to you about this. The history of brexit negotiations between the u. K. And the eu is there is a rhetorical battle which sterling and the dollar have been sensitive to. In terms of where it goes over the course of the second half of the year, i think we have. Nother falling out a significant threat to walk away for both sides. Going into the fourth quarter, and the back end of october where we get a European Council where the u. K. Will be invited. Some of the concessions on the issues that you mentioned including the level Playing Field, the european courts of justice and fishing, they will get thrashed out. And that is where the opportunity comes to close some of the gaps that sterling has generated in the last four years. 140 target. Some upside. Investors need to be patient. In terms of what we are looking for as the months unfold or rather as we head into next year, we have talked before about how we end up in some sort transition or ongoing dialogue. Withhing like the swiss europe. Constantly in flux. That sounds difficult for business to navigate. Simon it is but it is the reality of two trading blocs having to constantly evolve their relationship. To be a not going stroke of a pen from donald trump, joe biden, or chinese officials that will put that away. This will be a constant trade dialogue between these two economic superpowers that will go on for decades and that will be the same for the u. K. And its relationship with the eu. The question around how business navigate that that is what you are looking for is some mediumterm certainty regarding , andionships, equivalence the level Playing Field so the rug is not pulled out on short notice. Beyond december 31. But some new terms will allow business to be done with some degree of confidence. Anna how important is the brexit outcome or the trade negotiation outcome in the context of covid19 and everything the u. K. Economy has been through . Simon there is a real divergence of opinion here in so far as the flux generated by covid19, which is unprecedented. Economically. Can you hide the disruption of a brexit amidst such a massive other external force . That is one school of thought. The other is with an economy so weakened, you do not want to be restrictionsurther or adjustment costs. I think the politics is largely unchanged by covid. Brexit, itext of a think it was always going to go down to some of the principles here that get compromised through negotiation. Thecovid does not provide air cover to do something fundamentally different. Anna simon french, a chief economist at Panmure Gordon company. Let me get into what is happening with a couple of companies that we talk about a lot. Nokia and daimler. A ruling from a Court Suggests that daimler had broken some patents owned by nokia. Daimler has lost the ruling over the nokia mobile phone ruling. Violating this according to the court. Another headlines does nokia must enforce the ruling. We have yet to hear what kind of punishment that daimler will face as a result or if there will be some sort of ongoing legal process. We will watch these headlines. In terms of market reaction, both of these stocks are moving to the downside. S is a dropping market. Job cuts at m s. Slashing 7000 jobs in the next three months. We will get details next. This is bloomberg. \ anna welcome back to the European Market open. 23 minutes into the trading session. European equities are on the back foot. Struggling is Marks Spencer as it has announced it is cutting 7000 jobs over the next three months after its clothing business was hit hard by the coronavirus locked down. That adds to a growing told of job loss in u. K. Retail sector. Why is a business cutting staff now . This has been a long structural trend i suppose. M s in particular. It has been trying to turn its business around for the last decade. One of the reasons it is doing this now the government job support scheme. It isrlough scheme as known here is coming to an and. A lot of jobs that have been supported companies are looking at their costs. Themain reason really is shape of trade. Although the stores have reopened, people in britain are still quite nervous about going out and footfall to the main streets is still down massively compared to a year ago. To cutrs are having their costs accordingly. There is also a slight bit of opportunism for m s. Ishink their thinking now this is the time to take these job cuts. Wondered it wa m s should have been protected by food which we know is selling well over the pandemic. Their Food Division has done with m sthe big issue is clothing and home divisions which are still sizable parts of their business. They have tried to move more online for the past decade. But what they have been seeing during the pandemic crisis is that more of their customers are turning to online shopping. They have had to devote more resources to that. They are having to do more home delivery. They are seeing the shape of trade Going Forward which means they will not need as many stores in the future. They have announced plans to close about 100 stores. This is part of a wider structural shift that has been happening and it has been turbocharged why the pandemic. Are some big retail venues we are talking about and perhaps expensive ones. Thank you, deirdre. Willxt on the program, we talk about geopolitics. Upheaval in belarus. Thousands of workers join mass protests against a longtime ruler. We will get the latest on that story and the role of russia and what it wants to see from this. We will talk about that next with analysis. 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 welcome back to the European Market open. 30 minutes into a negative trading session. We are decidedly on the back foot. Stocks down by 0. 5 . The ftse 100 is down by 0. 7 . U. S. Futures are flat take negative are flat to negative. I have pulled up the grr screen and the biggest losing sector is media. No sectors are in positive territory. Ofseems to be some unanimity thoughts. Let us get a bloomberg first word news update for you. Ae democrats are Holding Virtual National Convention to formally endorse the president ial ticket of joe biden and kamala harris. It started with a series of attacks on President Donald Trump. Michelle obama delivered a personal endorsement for biden. Minister hasnce resigned. His exit comes after a reach with the Prime Minister over the response to the coronavirus and amid an ongoing scandal. Justin trudeau did not name a successor but it will not be mark carney. The u. K. Government has been forced into a uturn over exam grades. Theyve agreed to let the results be determined to buy teacher assessments rather than through a controversial algorithms that downgraded results. It comes in the face of outrage from present from parents and students. Gavin williamson admitted there was unfair and the system. Israel says bahrain and sudan will likely be the next countries to make peace with israel following the lead of bit united arab emirates. Israels president has invited the uae leader to visit jerusalem. Gulfip no other senior ful leader has made since the founding of israel. 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. Belarus. Thousands of workers join mass protests against president metander lukashenko who was with calls to resign. The long time ruler insists he will not step down and instead proposed changes to the constitution. The Opposition Leader says she is ready to take over until new elections can be held. Eu officials will discuss a response tomorrow. The russian president has yet to weigh in. He has offered to send support. We are joined by Alexander Baunov. Good to speak to you. It is the russian stance i would like to pick up on. It seems as if we have a problem with our line. To alexander. We will try to reestablish that. Interesting developments and questions around what president putin wishes to achieve in belarus. This is not ukraine. The nation does not seem to be divided in the same way as ukraine was divided between the prorussia and proeu camps. That is not the belarusian story. We will try to reestablish our connection with Alexander Baunov to bring you that kind of analysis. Revenue slumps we speak to the chairman of one of africas largest groups, ecobank about how they are weathering the coronavirus. This is bloomberg. Anna welcome back to the European Market open. 36 minutes into a trading day that is negative. Nasdaq futures slip with a flat line. Banking. Lk about and a conversation that we tried to bring you yesterday. Pan African Banking Group Ecobank facing sudden contraction in revenue. Shares and the lender have slumped more than a third since their march high. The bank has operations across 33 countries across the continent. And it has named a new chairman in the midst of the crisis and i am pleased to say he joins us now. Alain nkontchou took over the role on june 30. Thank you for joining us. What is the biggest challenge that you face operationally with the coronavirus . Alain thank you for having me. I guess the biggest challenge we have faced as a group was essentially to make sure that the bank continued to serve its clients. And i am happy to confirm that this has more or less been the case. And we have been able to serve our clients through this pandemic and even reduce the cost of the service to a certain extent. With this kind of shock comes the notion of a challenge and the Balance Sheet. This is something we assess on an ongoing basis. We believe that somehow this crisis will essentially be transitory and eventually they will find some medicine or a vaccine down the road. It will allow us to go through this cycle. What will happen by and large within this crisis . The world has faced a simultaneous shock from the demand and supply side. This has brought the world to a standstill. And the governments have had to expand physically fiscally and across the board. This is true in africa. Believe that this has gone a long way towards helping the country for the first time to apply a policy where Central Banks can cut rates, provide additional liquidity. And this is one of the very first situations where we see expanding. Where do we go from here . Anna ok. You are pointing out some of the positives and some of the things that Central Banks have done to support the economies and africa. But that still leaves you no doubt with a headache in terms of loans going bad. What will need to be restructured . Early to assess that. And in this environment, it makes perfect sense to allow banks to have more time. [indiscernible] the way we view it is twofold. We are taking advantage of the fiscal expansion provided to the countries and discussing with believe that we this crisis will be transitory which means that some facing challenges will eventually recover. View. Hat is a longterm but we hope this will materialize soon. Between now and the end of the year, probably additional fiscal support those economies. And support has been offered in the form of forbearance which allows banks to consider the impact of their Balance Sheet. And by the way, we view this kind of situation as an opportunity to challenge our capital in the most efficient way. We believe watching our can allow us to expand our capital. Ok, you point to a lot of reasons to be helpful. And banks in europe and the u. S. To count themselves as part of the solution rather than the problem to get through the coronavirus. Maybe African Banks will face this distress. Do you expect the Banking Sector to be distressed . Anything can happen. It depends on how long the crisis will last. Obviously, within two years time, if we still have not found any meaningful product, it is growth willlobal dwindle. In which case, we do expect some on the Balance Sheets of some banks. We have to make to face the situation where there could be challenges on the Balance Sheet. But this is not our base assumption. Having said that, you need to polity hasthat micro been relatively helpful. We may need more expansion to cushion the crisis. More needs to be done but as a bank, we are in the wait and see situation. We still believe it will be a transitory phenomenon. Anna thank you so much. Joining us here on the European Market open. Some of the top stories, corporate stories we are covering. Oracle is entering the race for tiktoks u. S. Business according to the financial times. This may complicate microsofts efforts to take over the operation. And oracle may partner with investors including Sequoia Capital and atlantic. Boeing is considering more job cuts than the initial temper sent. And voluntary layoffs may calm. The layoffs are hard but necessary. Employees will get more details next week. Isaccidental payment at citi now heading for regulators. The wall street bank mistakenly paid money to lenders. Citi described it as an operational mistake. Some returned the cash but others have not. Suing brigade who has refused to return the money. Wek to the geopolitics and will attempt to get our conversation around belarus where thousands of workers joined mass protests against the president , Alexander Lukashenko. What is the role of russia . Let us get to our conversation with Alexander Baunov from Carnegie Moscow Center who joins us. What happensutin here . Alexander first of all, russia wants their union with belarus and russia to remain. Gorbachev for destroying the soviet union. It is the only thing that remained of this structure. Wants to keep before he leaves is this last remnant. What kind of support would you expect him to send to Alexander Lukashenko . Alexander there is a big difference between ukraine and belarus. In ukraine, only a part of the consideredis friendly towards russia. In belarus, it is quite the opposite. Inole population ukraine, russia is concentrated on supporting the regimes. And in belarus, the regime is the whole population until now has been much more friendly than half of ukraine. We do not see antirussian slogans in the streets. Kiev. Ent from minsk and putinthat suggests that would be happy to see the transition to another leader. Alexander exactly. We can expect to see these kinds of antirussian feelings and slogans. Wouldst solution for him the not to support lukashenko. But to find a leader that wants nato. Immediately to join will this developed into another election . Will we see another election taking place . Or will there be a handover in power another way . Is not possible because as far as we know they can did herbal amount of ballots have already been destroyed. Lukashenko is proposing may be proposed to him by the kremlin. A change in the constitution. Mysterious changes to the constitution. That would allow him to stay for a while and transfer the power to the next leader. Population, the , do not accept this solution. We do not know exactly which kind of transitional solution will be proposed but in the inerest of the kremlin and the interest of the belarusian , to find a transition make belarus a democratic country but keep strong ties with russian market and the russian economy because dependent on the russian market. Alexander, thank you so much. It was really good to speak you and get your analysis. Alexander baunov, senior fellow at the Carnegie Moscow Center. Coming up on the program, what would it take to get oil back to 70. We have a guest that does not think we will get there. We put that question to Kristine Aquino who leads our and live market our mliv market here in europe. This is bloomberg. Welcome back to the European Market open. Some of the markets managing to recover from earlier lows. Joining us now is Kristine Aquino who leads our market live time here in europe. We are talking about u. S. Equities. , trying toparticular take out alltime highs. Kind of astonishing when you think about all of the headwinds that markets face right now. Where do we think u. S. Stocks are heading . For the remainder of the summer, i think they will do what they do best which is slowly retire in the absence of any had list. We have had developments on the stimulus front in the u. S. China trade talks in terms of us knowing these will continue and will continue to be risks for markets into the autumn. Yielding anysarily concrete results or developments as of yet. In the absence of any major changes on those two fronts, stocks seem happy to drift higher. It is interesting though that there is a bit of a contrast with some of the other risk indicators. We are seeing a bit more of a buildup in risk aversion or credit andss in fx fixed income. The question is when the equity shoe will drop . And it might not be until september. Anna if equity markets are quite willing to put the selloff in march behind them, we dont see that elsewhere. Commodities is one of those places. I know on market live, you have been talking about oil getting 70 if it well. It is 45 now. Responses we have gotten pertain to supply of course and it is really crucial that the Opec Plus Group stays together in terms of their common goal of controlling supply. The other side of this as well is demand. Not flying, if there is reduced travel even buy cars after the summer season, it is difficult to see it getting back above those levels and that bothat we need as well, supply and demand doing the work year. This could control supply as much as they like but if the demand side is not there and people do not have the confidence to travel as much as they did prior to the pandemic, it will be a tough call to get it back to 70 even by the end of the year. Is a politics in the u. S. Hot topic. The Democratic National convention taking place. Volatility seems certain ahead of november even if market responses to some of the events have yet to unfold and are unclear. It is the usual tact for markets and politics. It is difficult to price until it is imminent. At this point in time, thinking back to the 2016 election come a similar set up for instance in the dollar which was languishing. We did not see it motor higher until up until weeks into the november 2016 election which brought the ascent of President Trump to power and that came with the expectations of changes that would spur u. S. Growth. We are in a similar set up with the dollar where the summer before the election languishing near lows. We will see how that plays out in november. Anna Kristine Aquino from our market live team. European markets. Surveillance is next. This is bloomberg. Senate republicans plan a slimmeddown stimulus bill but democratic support seems lower. Competition for microsoft. Oracle said to be interested in buying tiktoks business in the u. S. The worlds top miner bhp reports that he underlying earnings. Mike henry speaks of plans to exit coal. Good morning, everyone, and welcome to
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