Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

There is no return to lockdown here. Europe shouldsays not return to full scale shutdown to avoid another hit to the economy as french daily cases hit levels not seen since april. Tech continues to drive gains. The nasdaq hits a new record, propelling stocks and futures even higher. Pfizere news on a vaccine serves as a tailwind. Plus, biden vows to end the darkness. Calling his opponent a National Embarrassment. He promises to support the working class and reform taxation. Look at the futures right now. In terms ofains tech stocks in the u. S. A new high. Now we see a little bit of a mixed picture with ftse futures pointing down, but continental futures are on the rise. Back all gaining. Lets take a look at what u. S. Futures are showing us. More green arrows. Almost 0. 2 percent on nasdaq futures right now. Alsond dow futures are gaining. What are you seeing on the gmm . Anna it seems that markets, investors taking a glass halffull approach. You can see some of those markets doing well on the screen right now with the south korean market up by 1. 4 . Coming through. There are some reasons to be cheerful. You mentioned the virus, latest news out of pfizer. Also, the tech rally, factoring that in. If you need to read across from the u. S. Into europe and asia, that is one reason for optimism. On the downside, that gloomy data on jobless claims from the above states yesterday, one million once again. This is kind of a stop start recovery. Notlatest on the virus here good news. We will keep our eye on those moving parts. The European Equity markets look to follow the glass halffull approach we see from asia. Lets get a first word news update for you. Former Vice President joe biden has officially accepted the democratic nomination to challenge donald trump. He used his keynote speech to urge americans to overcome deep little divisions. Has done america in darkness for too long and he will be an ally of the light and not the dark. Has made it known to the u. N. Its desire to reinstate sanctions on iran. Mike pompeo is accusing allies who do not want to do it of failing to lead. Iran has pushed back, saying that the United States is attempting to mislead the world. leader is rebuffing european experts to intervene. He has even refused calls from some western leaders. The eu is calling from a peaceful transition of power, but lukashenko was holding on after a controversial election. 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. Matt . Matt thanks very much. Asian stocks, u. S. And european the futures all higher. Technology shares driving those gains. Datais despite weak jobs in the u. S. Jobless claims unexpectedly climbed to over 1. 1 million. Kristines now is aquino, who leads our mliv team. Was interesting that stocks rally in the u. S. Considering the jobless claims once again jumped. Absolutely. That has been the storys for equities this week and the last couple of weeks, this growing divergence against the fundamentals as you would see from Economic Data and what is happening in the stock market, which seems to be that the operating protocol right now is drifting higher in the absence of any definitively bad news and that is what we have been seeing. It is a question of how long is this going to continue . We know that this rally is still largely on the back of tech stocks. If you look at the s p 500, quite a divergent in terms of the percentage of index members that reached new highs. It is less than 5 . I would expect it to be the same for the nasdaq. There is this big divergence built on the back of tech stocks. How long can tech stocks really keep carrying the rest of the u. S. Equity markets here . Really interesting question to explore. We got the jobless claims numbers from the u. S. , underlying the stop start, the forwards and back words and terms of the recovery story here. Over a million new jobless claims coming through. Is this something the market is looking through or has ongoing concerns about because the virus is still with us . Absolutely. I think really what investors are wondering now is are equities leading the way or are they lacking behind other market that may be are looking a bit more cautious . In the asset space, we are seeing a bit of a leading in the japanese yen, which is a traditional risk barometer. Yields have stalled the rise we have seen earlier in august and they are Holding Still near the very low levels. There is a lot of caution built in other markets besides equities. The question is are we waiting for the equity shoe to drop . Are we waiting for them to catch up to risk once liquidity gets back into full swing after the summer . Today, in we see pmis feel like we have european pmi coming out every week these days. I guess we are going to see them for august. What do you expect . It would be interesting to see in particular what companies are saying about the employment situation. While we saw some good numbers out of the emi in europe ross the board, jobs was the one concern. A lot of companies in Different Countries in europe have still been noting week employment developments. Story of theth the fact that furlough schemes are about to run out and countries are looking at ways to mitigate this employment or unemployment spike that we are expecting in the latter part of this year. It will be interesting to see what those employment numbers will show us and whether there is any sort of them prove meant or, if not, how will that square up with the fact that furlough schemes are about to run out here . Thanks very much, thanks for joining us. Joining us from the markets live team in europe. Up next, another round of exit talks set to end without an agreement. Is it getting impossible to avoid . We will look at the latest breaking data points on retail sales and government debt. All of that coming up shortly. This is bloomberg. Matt welcome back to Bloomberg Markets, this is the european open. We are 40 minutes away from the start of cash equity trading. Todays top corporate stories from the bloomberg terminal. Vaccine they are working on is on track for regulatory review. The timeline would make it one of the fastmoving vaccines in the world. The two Pharma Companies previously secure deals to supply 100 million doses to the u. S. Uber and lyft have won a reprieve, urging the companys ruling the companies can operate as normal. The new rule mandates the companies treat their employees as employees which would upend their Business Model. To pay 1. 6reed billion to halt essure claims. The payout is considerably more than they paid to acquire the company that made the device. That is your Bloomberg Business flash. Anna hopes for a brexit deal seemed to be fading as the latest round of talks is set to end today without an agreement. The british negotiators sought to break the deadlock based on what they saw as Common Ground with the eu, but so far that has not led to a breakthrough. Liz, this clearly very important to the u. K. Economy. It has been something that has been in the works for a long time. It is being overshadowed in terms of the figures or statistics of what is going on with the pandemic. What is your focus around the timeline of exit . Are you still assuming that some kind of trade deal is done by the end of this year . Yes. Are, it is overwhelmingly in the interest of both sides to do a deal that at the very least gives tariff free trade with the u. K. By the end of the year. If you dont have that, you will have disruptive event that will affect both sides at a very difficult time. With that said, what we went through, stories of no breakthrough, but eventually we do think adil does get done. Much disruption the deal that is agreed brings. If it were to be something that does not have any degree of regulation, doesnt have any services, that can still be quite a disruptive event at the end of the year and that is what we are assuming. Saidously, we would have that we were forecasting 6 of. Is that coming on the back of these numbers [indiscernible] the issue is how much production does it bring . How does it affect the recovery . Will the recovery be slower than it otherwise would have been . How does it affect employment in the u. K. . Matt a 6 recovery, as you say here, how does that compare to European Countries that dont have to make a brexit deal with the eu . It is a little bit difficult because of the numbers. But i think, yes, where we have u. K. Gdp at the end of 2021 relative to where it was before the covid crisis, it is lower and that is particularly because of lower investment. Business investment, im expecting to be hit hard by this effects by the general of the current economic climate. Anna lets return to some of the data we got this morning. We got the number for retail sales, which i think a really interesting. Retail sales in the u. K. Up 2 month on month. The estimate was for an increase of 0. 2 . What is the u. K. Propensity to consume right now . What do retailers want people to spend their money on . How do things look now . Liz you just cannot get the brits to stop shopping, can you . You are right. It is all about the mix of spending. Food is a driver. We have seen the normalization of things like feud fuel sales. I think Clothing Sales are still lower than they were prepandemic. I think the issue is that retail is only a part of consumption. We are buying a lot more, having more delivered, but are we going out and buying a coffee on the way . Are we using the gym subscriptions . The kind of areas that form the broader consumption sure and which may not be quite as healthy. If you look at the confidence number that came out this morning, confidence has not really improved very much at all. Yes, buying things in terms of retail and that probably was some pentup demand during lockdown, there is still plenty to buy online, but the wider consumption picture is where we are worried. Matt what are the changes you see people making that you think are going to hold up . Time, the parlance of our what are the stickiest changes people have made . Liz i think we have all had a good think about our lives and lockdown, havent we . Some of the things we have been forced to do, we have actually enjoyed. Do i need to go out to dinner as much . Do i need those expensive holidays . Maybe not. Saving money is possibly one. Working from home is another. People who i know would like to work from home at least partially in the future even when the pandemic is a thing of the past. People have just reassessed their habits fundamentally. For a consumer in somebody like the u. K. , that could be quite worrying. Indeed. So the things those Office Workers normally consumed, that can be quite worrying. 38 of people in the u. K. Are working remotely, what i read in your note. Let me ask you about the debt numbers. U. K. Government debt topped 2 trillion pounds for the first time, clearly a lack of tax receipts during the early part of the lockdown issue here. How high does this number get now . We are talking about a debt to gdp number over 100 . Liz yes, we think it continues to rise. We have about 105 of gdp this year and next year, as well. Government borrowing is humongous this year and that is because of all of the emergency schemes the government has put in, most importantly the Job Retention scheme, but other programs, as well, and as you say, a lack of tax revenue because a lack of activity, but also tax breaks and holidays, as well. A little less next year, but it will be hard for the government to come back and say, now we need to give you your tax bill back, we need to cut back spending. I think it will be very hard for them to do that in the current economic climate. It is going to be a lot higher, the national debt. Liz, thanks so much. Thanks for giving us your time this friday morning. 40 minutes to go until the start of the European Equity trading day. Coming up, avoid a new lockdown at any cost. The german chancellors morning. The block deals with a new outbreak of coronavirus cases. This is bloomberg. Welcome back to Bloomberg Markets, this is the european open. 30 minutes away from the start of trading. Onare looking at gains continental equity Index Futures , but slight losses for ftse futures. A Covid Vaccine being jointly developed by pfizer is on track to be submitted to regulatory review as early as october. The Companies Say it is well tolerated with mild to moderate fever and fewer than 20 of participants. The positive news comes as german chancellor Angela Merkel lockdowns. To avoid speaking with french president Emmanuel Macron she set the closing borders should be avoided at any cost. About dealingrn with a Public Health crisis without delivering another blow to the economy, according to Angela Merkel. Good morning. Theme ask first how bad situation is across europe in terms of the virus right now. Really risingng cases almost everywhere in europe. France, yesterday has a rise of 4700 k says, the most since mid april. Also, germany has had the highest numbers in several months throughout the week really. We have also seen rising cases in Eastern Europe and spain. Albia a bit more moderate in italy, as well. It is important to remember that the situation we are having now is still a far cry from the one we had in march, april, where all the hospitals were overflowing in some of the southern European Countries and we had thousands of deaths each day. We are still far away from that stage, but we obviously have rising cases everywhere and that is a worrying trend. How have european leaders been reacting to this . So far and this is what we have heard Emmanuel Macron talk about yesterday so far, they have been doing everything to try to avoid general lockdowns again. Now are just more targeted initiatives then lockdowns in march and april. We have seen mandatory mask wearing being much more widespread. We have france declaring some areas where people eating outside have to wear masks. We have seen local shutdowns. We have seen the closing of nightclubs and other venues that could be spreaders of the virus. We have seen the quarantining of travelers who come from risk areas. Just yesterday, germany declared parts of croatia as a risk areas, so people who come back from those areas need to quarantine for two weeks or show that they have a negative test result. Chancellor merkel said at the moment what will not happen is that will not be any further easing of restrictions that are in place. She also stressed that what she wants to avoid is a closing of orders at all cost. Thanks very much. Not taking the edge off the Global Equity session just now, but something investors are watching mostly. Thank you very much. Next. Olitics biden accepts the democratic nomination and vows to end this season of darkness. We discuss the latest on u. S. Politics. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Anna welcome back to Bloomberg Markets european open this friday morning. 30 minutes until the start of the cash equity trading session. European equity futures suggest they will be a little bit stronger at the start of the trading session. Lets look at what is happening today. We are monitoring events in brussels, where the latest round of brexit talks is due to conclude. The postmaster general is appearing before the senate this afternoon following concerns delays could affect the u. S. Election. That has been a big talking point this week. It we will get another look at how the u. S. Economy is faring. Im looking ahead to the supporters will be excited to see the show down in the Champions League final on sunday. I know where you are, people are very excited about this game. Matt absolutely. It has been walltowall coverage in german media, as you would expect. Bayernmans tend to think munich is the best soccer team on the planet. I sure that could be disputed. Bidenng of disputes, joe has accepted the democratic nomination to challenge President Donald Trump in november. In his acceptance speech, he urged americans to vote for a new National Leadership that will overcome political divisions in the United States. Mr. Biden the current president has cloaked american darkness for far too long. Too much anger, too much fear, too much division. Here and now, i give you my word. If you entrust me with the presidency, i will draw on the best of us, not the worst. I will be an out lie of the light, not the darkness an ally of the light, not the darkness. Time for we the people to come together. Make no mistake, united, we can and will overcome this season of darkness in america. Matt bloombergs kailey leinz has been following the d c. What have been dnc. Would have been the main themes in joe bidens speech. Deemphasized this theme of light versus he emphasized this theme of light versus darkness. There were questions about his ability to deliver because he has bungled in the past. He succeeded. It was not so much policy oriented. He did give mentioned to his economic plan, but it was more about contrasting himself with President Trump also about unity. He says although he is the democratic nominee, he wants to be an american president. He says this is not a partisan moment, it is an american moment. He did take direct aim at the president. Biden spent a good deal of time focusing on the pandemic in particular in his speech. He went after trump for what he called a failure of leadership during this virus crisis and economic turmoil that has followed. He laid out what he would do day one in office if he was elected. He would institute a National Plan and National Mask mandate, as well as rapid testing. Specificthe most policy he really got into during the speech, matt. Anna absolutely. It was interesting looking for any policy and it really was much more about the style and different values he sees himself bringing, rather than the policy. What have we heard from other c . Eakers at the dn a lot of the ones we heard from tonight were his former competitors that were running against him in the primary, like andrew yang and pete buttigieg. They all had sharp criticism of President Trump and broglie tried to underscore this message broadly tried to underscore this message of urgency. Really a Democratic Party trying to put on a display of unity, showing that they are rallying around their ticket and trying to draw in all corners of the party, and really trying to bring back some of those voters who voted for obama in but thenr trump and 2016. They want to bring those people back into the fold as well. Anna thanks very much. Thanks for joining us on the program. Kailey leinz. Lets get a bloomberg first word news update for you. Here are the top stories we are covering. U. S. House Speaker Nancy Pelosi is under pressure from a moderate democrats to restart stimulus talks with the republicans. Fiscally conservative members of her own party are urging her to give saturdays vote on the u. S. Postal service to revise negotiations. They argue a bipartisan compromise is the only solution. Steve bannon has been released on bail after pleading not guilty to fraud charges. Prosecutors claim he laundering money in parts of a border wall scam. They say he advertised it rebuild the wall as a volunteer campaign while pocketing more than 1 million for personal expenses. Wayir ambulance is on its to pressure to bring opposition politician alexi nevada for y to germany. Vel they say he is not well enough to be transported. They say he is Getting Better after being admitted to intensive care yesterday. Are blaming president vladimir putin. Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Dethrones theope u. S. To become the most active market for commercial real estate deals in the Second Quarter. We discussed the Real Estate Market next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Two minutes away from the start of cash trading. Slightstill seeing losses for futures in london. Ftse futures down 0. 1 . The gain for continental indexes across the continent all green arrows in terms of futures. 0. 3 , dax futures up about 0. 4 . The value of commercial real estate deals in europe overtook that of the u. S. In the Second Quarter, according to real capital analytics. The continent dethroned america come along the most active market for transactions, as america, long the most active market for transactions, as the covid19 pandemic hit. Where houses have been a hot uses have wareho become a hot commodity during the pandemic, especially in the u. K. Has the coronavirus accelerated the preexisting trends in u. K. Real estate . Thanks for having me. Lockdowns caused by covid around are staying atle home and shopping from home. All the people who have never been shopping online have had to get used to that. Thats likely to stick, to an extent, and accelerate the existing trend. When you look at the proportion of u. K. Retail sales that were online, it was 19 earlier this year before covid. Lockdown,r 30 during according to national statistics. If you think about how much more Warehouse Space will be needed, that is an awful lot. Anna indeed. Where is this demand coming from for the Warehouse Space . We all know our own experiences buying a whole lot more online. More Warehouse Space, i assume, is needed. Which are the business is buying it up . The demand is coming from online and mixed retail especially, particularly ones looking for ones delivery access to big cities. I think what is so special about amazons new warehouse thats being developed is not only that its going to be the largest in europe, but its going to be inside londons with access to millions of customers. Online retailers like amazon, other retailers, discount retailers also looking for space as well for distribution for Online Purchases and also to distribute to their stores in urban locations. See is are going to these sorts of if these sorts of behavioral trends stick, we are going to see more uptake. We saw a record uptake in the Second Quarter this year of space in the u. K. For warehouses, despite covid. That was throughout the lockdown period, we have seen a record amount of Warehouse Space been taken up. Matt thanks so much for joining us. Appreciate your contribution. Todd gillespie there on the story. Lets get to the Bloomberg Business flash, todays top corporate stories from the terminal. Pfizer and beyond tech say the Covid Vaccine they are working on is on track for regulatory review in october. That timeline would make it one of the fastest moving vaccines in the world. Pharmaceutical companies previously secured a deal to supply 100 million doses of the drug to the u. S. Have won aft reprieve in their home state of california. The companies can keep operating as normal while challenging a previous order to comply with state labor laws. The new role mandates that companies treat their workers as employees, a move that would upend their Business Model. Mark zuckerberg has been questioned by officials from the u. S. Federal trade commission. Sources told bloomberg it was part of an antitrust investigation into the social media company. The ftc is one of multiple agencies exploring facebooks market power and influence. The social network says it is cooperating with the investigation. That is your Bloomberg Business flash. Anna . Chairman and ceo of the investment manager Firm Calendar cowen say the fed has done a good job of keeping the markets the fed was unwilling to take prophylactic steps in order to stave off the Global Financial crisis of 2008. There were a lot of things that they could have done that would have made the impact of the Global Financial crisis at the end of 2008 a lot less devastating. And so they learned from that. Very quick to pull the trigger here to get the markets liquid in march. By the way, i think that was a great move. I know there has been a lot of criticism about the fact that they bailed out the banks. The reality is, like them or aret like them, the banks critical suppliers of liquidity to the market. If liquidity in the market freezes, then all bets are off. Thats what we learned in 2008. I have to praise chairman powell on the fed and the fed to maintain market function and stability while this thing plays out. I do want to bring us back to the elections for a second here. Because it is the biggest thing that people will be talking about once they come back from labor day. What is the biggest concern your clients have as we approach november . I think people are talking about it now. We have been encouraging all of our employees to take a week off. Its really hard, because everybody is engaged 24 7. I think we are in the throes of it already. People are expecting to come back after labor day and everyone be focused on the election. How are you not focused on the election now . I tend to focus on places where there is actually remarkable consistency. Antichinese sentiment is embraced bipartisan. I dont expect there to be a about global tenor trade. Reshaping jobs, industries that will create american jobs, there may be disagreement between republicans and democrats but they both want to see jobs. Honestly, democrats tend to be more focused on sustainability and things work we can create new american jobs, highpaying american jobs that focus on Climate Change and other things like that. At the end of the day, there is an intense focus on the part of both parties to do the things necessary to get americans back to work. That is a really positive element, i think, regardless. People can focus on the differences. I think they are largely rhetorical and political. There is some very big social differences. The markets themselves are looking at this and sangha, it really does not matter saying, it really does not matter who it is. To rounded out, i would like around it out round it out, i would like to get your perspective, how is business . A lot of our clients have chosen to finance. New businesses have emerged. The stack business has actually emerged in a meaningful way. It is a viable way for a Letter Private companies to access the markets. It is an overnight sensation 25 years in the making. Now, they are the flavor of the month. There has been more in biotech ipos than may be any other year. Cowen is good at those and we have chosen to focus on them. Turns out those are really good businesses to be in in this kind of environment. Everybody is trying to figure out how to finance themselves to get access to this capital. I dont see that changing anytime soon, whether it is a republican or democrat the white house. I think at the end of the day, Companies Need to make sure they have the resiliency, sustainability to execute as long as this crisis goes on. The best way to do that is to have access to capital. Matt that was the ceo and chairman of cowen talking to alix steel. He was talking about some of the changes we have seen amidst this crisis. One obviously has been the incredible pickup in tech. That growth has pushed tech stocks to a new high in the u. S. In the form of the nasdaq 100. That optimism has rolled around through asian markets to the continent here. We see, in terms of european futures, gains on the dax and the cac, as well as the ibex, the ftse, etc. Not huge gains, but we are 0. . G at 0. 2 to only 0. 4 . Only in the u. K. Do we see futures down. Anna anna anna . Anna we do have a stronger pound, but also a slightly stronger euro. Lets look at those u. S. Futures come up about 0. 2 on the nasdaq. How overstretched is that rally in tech stocks, or not, in your view . The push and pull daily of these markets. Tech stocks, optimism around growth leading us higher, along with hopes around a vaccine in the lastly four hours. On the other side, last 24 hours. On the others, we have the data theof the u. S. And resurgence of the virus in europe never far from our minds. Minutes away from the open. Up next, we will get your stocks to watch, including bayer. They will pay billions of dollars to halt lawsuits related to a contraceptive. This is bloomberg. Anna welcome back to Bloomberg Markets european open lets talk about what is going on with tech stocks. We have a great chart for you on the bloomberg which asks whether this is deja vu all over again. Does it worry you that the nasdaq 100 and vicks is diverging . It took on external catalyst to break the divergence in february, didnt it . That was the emergence in europe, in other parts of the world of the coronavirus. Now, we are back to that divergent pattern. I wonder what kind of a break from history this release. I was reading some interesting stuff earlier on this week talking about the reliance on tech stocks and actually some in the market think that it does not matter if tech stocks are taking up a larger proportion of the stock market capitalization than they were previously. They are suggesting it is not all that out of kilter from history. Matt after all, they are not really the new economy stocks anymore, are they . They are just the regular economy stocks. At some point, a lot of stocks are going to be what we would have considered 10 or 20 years ago tech stocks but you wont even think about them that way. Joining us now to talk about the movers that we expect to see is annmarie hordern. What do we expect to see in terms of bayer . They are always in the news, typically due to lawsuits lately. Annmarie thats exactly why they are in the news this morning. They are settling about 90 of some 39,000 claims out of the United States. This has to do with this essure claims. This involves a device related to injuries. This is what they are alleging, these women, in terms of this contraceptive device. These women say it has failed to pregnancyjury or has injured them, leading to really strong lawsuits. They will be paying out about 1. 6 billion to resolve this case in the u. S. Becauseat the morning calls, bayer looks unchanged. Perhaps the market has been pricing this in. Anna lets talk about this Consumer Finance payments business. Annmarie some executives are paying out, selling shares of more than 1 . They are really just taking on the moment. The stock has been on a tear this year. They are selling as much as 1. 7 of capital, they would diversify their portfolios. The stock is called down because of this. That is no surprise. This company, again, has been doing very well since the start of the year. You see a lot of people just ditching hard, cold cash, and they want to have contactless cards. It has spurred more ecommerce during the pandemic. Matt of course, that company big competitors in that payments business. One of those two companies having a tough time, obviously. Lets talk about the travel sector, speaking of tough times. Annmarie we could get some moves to the upside. Angela merkel yesterday saying that they really do not want to go back into those draconian lockdown measures that we had to do earlier this year. You see european leaders really just torn between public safety, as was protecting the already be in down economy beaten down economy. We have portugal being added to the socalled nice list when it comes to the u. K. If youre in portugal and come back to the united kingdom, you do not have to quarantine. I believe you and i spoke to the Tourism Industry there. I mean, it accounts for 15 of the economy. There is some bright news if youre a traveler in portugal for the u. K. Angela merkel saying they really want to avoid another closing of the borders. Matt right. At the same time, if you are going to go to croatia, you might cancel your trip. I was going to go to mallorca over the weekend. I would have been required to take a test and quarantine upon my return. Annmarie i have given up on travel this year. Matt just holding up in your apartment. Thanks for joining us. And at work come of course. Coming up, it is the market open. Futures are pointing higher. A minute to go until the start of cash equity trading this friday morning. Welcome to the program. To lockdown. Angela merkel and Emmanuel Macron say europe should never return to a shutdowns to avoid a hit to the economy as french daily cases hit levels not seen since april. Tech continues to drive gains. The nasdaq hits records. Positive news on way back seen served as a tailwind. Biden vows to end the darkness. He rebukes President Trump in his address at the democratic convention, calling his opponent a National Embarrassment and promising to support the working class and perform taxation. Matt lets take a look at futures. A few seconds to go until the start of live trading. We see ftse futures turning around a little bit. They were down is little bit. Rising onutures are the continent. Lets take a look at the live trade. In the far lefthand column, you will see equity indexes as they open up. You can see the ftse little changed right now. Stockholmening up in up 0. 1 0. 3 . We should see other continental indexes open up live. It is taking a little while on this friday morning. Little changed in amsterdam. Part, we do see gains, even if there is little change really in the u. K. Nna yes travel and leisure stocks seem to be making gains. Interesting timing. European Equity Stocks moving higher. Unemployment claims numbers, i should say. We are joined by a senior strategist from bny mellon. Thanks for joining us. Early on, i was talking about where we go with tech stocks. He was basically saying dont be too concerned about overconcentration of gains in tech stocks. Does this worry you, the reliance stateside . It certainly does. This notion of if it aint broke dont fix it. I think we had the earliest indicators that the u. S. Labor market is facing some stress. Ultimately, it got shrugged off. Guess we can say that if you look at consumer staples, discretionary sort of flap on the day. On one sector right now. That does not reflect the u. S. Economy. It has to be corrected at some point. , one we do see the s p 500 of the only major indexes outside of china showing gains year to date. Here is a look at the nasdaq and the overextension. Text opt does the outperformance explained with the big difference between gains in the u. S. Benchmark compared to the ftse that is down 20 year to date . Geoff i thing it does to some extent. The composition is very important. The u. S. Is considered really the only viable Growth Market right now. High productivity growth driven by tech. In that a bit unique the china onshore market is very concentrated with domestic exposure. It is exposed to the domestic economy and if you are of the view that china has handled the Covid Recovery and will be able to manage things, then it can outperform, as well, but there is a greater dispersion of what is driving china. Skull,ly, u. S. For nowhere to be seen right now. China currently has fiscal support and that is going to make a difference in the coming quarters. Anna how are you preparing portfolios for the coming election in november . The more i talked to guess about what kind of impact we might see if we were to see a biden presidency, the more confused the market assumptions have been in my mind. What are you assuming at the arent . Geoff i think there three factors. Will there be any material changes to the covid situation . Probably is somewhat beyond anyones control. Secondly, from a domestic point of view, in addition to regulation, there are a lot of sectors, people will be looking at whether policies will change. We know what happened in 2017, where fiscal stimulus and tax cuts, that was material. Thirdly, what is going to happen with the trade war . What is going to happen with International Relations . I need i think the positioning needs to be more nuanced. Broad debtsanymore rapid changing and u. S. Trade relations. Think theyre going to be disappointed about going back to an area of r. O. E. Globalization. In the short term, i think the economy and the labor market comes through and that is going to be the factor. Matt one of the things i thought was interesting and biden speech yesterday is that he really attacked the president for mishandling, allegedly mishandling the covid crisis and said he has a plan on day one, he is going to handle it correctly. Do you think the market has faith that changing the person in the white house, changing the party and the administration will set the covid crisis on a path to recovery . Not sure the market has taken too strong a view on that right now. Vaccines could come online over the next few months. Then things could turn around very quickly. That is not just the u. S. , that is everywhere. It may be viable come autumn. There are different dynamics. The state response is just as important as the National Response in the u. S. I think what the market will want from the white house is what is the fiscal plan . Will there be a new fiscal injection to make sure unemployment turns around to get back to where we were precovid . That is going to be much more important. Anna thanks very much. Littletays with us a bit longer on the program. The ecb wants clearer signs of a recovery before it decides on a direction more stimulus. Will pmi be the evidence the ecb needs . We will discuss next. This is bloomberg. Anna welcome back to the European Market open. Just 10 minutes into the European Equity trading session. Up by 0. 4 . More markets looking buoyant. U. S. Futures point modestly to the upside. Lets take a look at some of your movers, some of the stocks on the move this morning. Payment company falling after executives sell shares. We have a share price down by around 0. 4 . After u. K. Mbing travel corridors with portugal have been reopened. Novartis is claiming after the fda approves a drug for the treatment of relapsing of multiple sclerosis in adults. That is up by 1. 2 . European Central Bank Policymakers want clearer signs in a lead their next policy meeting. Showed the extent to which they will have to does ploy stimulus. I wonder what value pmi indicators give us right now. Their sentiment has been roiled. What clear signals are we getting through that data or are we getting signals elsewhere . Looking at how high things have been for the august numbers and im sorry to say it gives us an indication of what the potential downside is. , servicesen in europe have been driving the positivity of economies. With the onset of the second wave, we have read about the rise in cases on the continent over the last few days or so, financially, we start to contract again or start to decline again. This is going to drive sentiment. We have had some stellar prints. We know the manufacturing side has recovered. Risk is absolutely to the downside for services and that is what people will be worried about up ahead. Matt can the ecb really do something to move the needle less far as markets are concerned . You mentioned investors are expecting or are going to make decisions on what they get fiscally out of the u. S. Isnt that the same here . Geoff if you look at the Government Support plans, france, two years worth of support, you do have a larger state sector and expectations that the state will play a greater role. From the ecb point of view, it is important to note that the minutes we see just now are taken before the results of the eu summit in july. Important for the ecb is what happens in the shorter term. Here, probably the fed will lead the way if the fed ,dopts some inflation targets that is a widening of policy differentials versus europe versus the rest of the world. Compelled toeel follow that or keep the gap where it is . Now the euro is trading closer to 1. 10. That is a headwind for inflation. Anna that is exactly where i wanted to take us next. The strength of the euro. How worrying is this level for european businesses . I spoke to one strategist to said it would not worry to ecb until it got to 1. 30. What is your line in the sand . Geoff i think the ecb will have to look at things on a basket basis. And a real basis, as well. As domestic demand, as long as households recover, if we see retail sales pick up, if we see domestically driven prices, if those numbers are firm, i think they can be comfortable with eurodollar trading at these levels. If we get another 10 figure is, that could be problematic. Currency, yes, there is an impact, but sometimes it is much more about pace and much less about levels. This time next year, i dont think the ecb will have to much of an issue with that. If we get it next week, i think they will have an issue with it. Matt i wanted to remind viewers we are getting french pmi in about 20 seconds here. We will get german pmi numbers, as well. If you feel like pmis come out every week, it is that you get a preliminary reading and then a final reading and then there is a different pmi figure that comes out, so it is three times pminth you get a set of numbers. In any case, we are just about to get the french pmi numbers. The survey was for manufacturing pmi. That has been widely missed right now. Was 49 on manufacturing pmi. The survey was for 56. 3. That has been missed by a long shot as well. The composite well below the survey at 57. French pmi missed. We get the jump in jobless claims, how important is each little data point . I guess pmi are not a little data point. People put a lot of faith in these numbers. Geoff indeed. Do you look at hard data . Do you look at soft data . Here it is the soft data. , is that actually going to lead hard data . Are we looking at a very soft q3 up ahead . Is it going to generate more volatility up ahead . The clear risk is the sharp recovery. That is really not going to extend into q3. What can we actually do to offset it . Recoveryo have the eu plan, that story for the next two years. Our plans enough . Is anything else going to add to the problems. It is about sentiment, it is about the labor market. Central banks may have a problem. Matt thanks so much for joining us. Yu, senior strategist for emea markets for bny mellon. Cost,ng a lockdown at any including border measures. Area sees a new spike in cases and a battered economy. This is bloomberg. The welcome back to European Equity market open. 20 minutes into the session that is fairly mixed. We started off in positive territory. Now retreating. The ftse is part of that. Largest i. T. Outsourcing companies in the world has seen its business battered by a Global Pandemic and changing immigration policy across the west. They are forcing the firm to pivot more locally hired talent. We spoke with the ceo about how he manages changing geopolitics as the u. S. Election approaches. What we are seeing really is the large western markets and countries have put tremendous responses, policy physical responses, and we see those benefiting the business community, where they are enabling many of these large withesses to continue their sometimes shortterm and mediumterm investment thinking. Has definitely been somewhat of a rapid come back of what we see within the u. S. Market. Inse are different scenarios Different Countries broadly in europe. There is significant policy response there as well. We see so many things in some of the markets that we serve in the asiapacific. For example in australia or japan. Push byconcerted government to support this level of growth or level of activity. Some policy responses particularly here in the United States have not favored your business at the moment. For example, im thinking first and foremost about immigration. U. S. Visa approval. Strain also seen some put on visa approvals in the u. K. As well. Is this a longterm shift . One of the things we put in place a few years ago is a concept called localization. In europe, in the u. S. Market, and australia, we have been recruiting employees from lateral hiring. Last year, for example in the 1200 collegeuited graduates. Since we made this shift over the last couple of years, we have recruited over 13,000 employees within our u. S. Business locally. While there have been some changes in the policy approach in this area, since we have put in place our own thinking and executed our localization, we see less impact into our Business Model as we look ahead. In the u. S. , we have set up six new Digital Centers over the past couple of years. Center ine, a digital indianapolis. In phoenix, and hartford, in rhode island. These are centers that are helping us to scale in the u. S. , as well. Infosys ceoas the speaking exclusively with bloombergs caroline hyde. Jointlyvaccine being is one of thezer fastest moving vaccines in the world. For more, the director of research for Bloomberg Intelligence joins us. Sam, how promising is this development . Good morning. To have this timeline before i even heard once september mentioned, so im glad they got rid of that because that would have been incredible in terms of having data. I have to wait and see how this pans out. Astrazeneca has been added a little longer than they have. They have recruited about the same number of individuals into their trials. There are a lot of things that can go wrong with clinical trials. I remain hopeful, but we have to wait and see how it and south. If they have it by october, great. Wonderingppose im from an investor perspective, what is the definitive piece we are looking for from vaccines that will lift the mood and allow people to see a light at the end of the tunnel . Will it be around a vaccine that works . Will it be around Regulatory Approval and Production Capacity . Or will it be a number of Different Things . Sam i think each of those steps are valuable. Once the phase three trial is completed as it is being conducted, no news is good news in terms of there are no side effects occurring that are causing a potential stop of recruitment of patients. That is already good news. Folksw that eight or 9000 have been inoculated from astrazeneca. So, so far, so good. It is very early days, obviously because the side effects from vaccines sometimes come out only after everyone has been using a vaccine after a year of approval. Then you have the announcement they have completed the phase 3 and succeeded. We need the vaccines to do better than the 50 . Even a 50 reduction in severe disease is a good thing to see. Then you have the fda to look at this. They see a lot more data than we do. There is a risk they go, we are not quite sure about this. Anna ok. Thanks so much for the update. Director intelligence of research. Up next, Bayern Munich takes on psg for the Champions League final on sunday. We are looking at the money behind this sport. More on that next. This is bloomberg. Anna welcome back to the European Market open. It is friday morning. It looks fairly flat. The ftse 100 and the cac underperform just a bit. Modest gains. If we look at things from a sector perspective, travel and leisure is the biggest training sector. Some comes from the aviation sector. Easyjet is higher by 1. 2 . We have a little bit of an upside for summer the aviation businesses. Other businesses including hotels. Some reasons for optimism. Let us get a bloomberg first word news update. Handed the United Nations is demand to reinstate global sanctions against iran. Out at pompeo is heading european allies who are opposed to this accusing them of failing to lead. Iran has pushed back saying the United States is attempting to lead the world. Joe biden has officially accepted the democratic nomination to challenge President Donald Trump. He used his keynote speech to urge americans to overcome deep political divisions. He said donald trump has closed america in darkness for too long and that he will be an ally to the light and not the dark. Hopes for a brexit deal are fading. Bloomberg sources tell us the british negotiators tried to break the deadlock. Based on what they saw as Common Ground with the eu but so far, that has not led to a breakthrough. The latest round of talks wraps up today. Russiasn activist and say doctors are refusing to release for treatment abroad. The doctors say his condition is too unstable to travel. Tolane has already arrived transport him to germany for medical treatment. His team blames president pugh saying his illness he has been poisoned. 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. Matt . Sport is going to be a big deal this weekend not only is there another motor gp race in austria but there is a really big football match. A soccer game if you will. Bayern munich is going to play psg in the Champions League final. The european finals. They may be taking place behind closed doors but the allure of the game and the silverware up for grabs should still excite fans around the globe but especially here in germany because Bayern Munich is one of the teams playing and german sink they are the best team ever. Joining us to discuss this is Bloomberg News david hellyer. What are we expecting of this final on sunday . David these are two of the worlds biggest teams. And psg, for them it is a big dream. And to win the Champions League is the pinnacle of ones ambitions in european football. Is used to being in the Champions League final. A very powerful within germany. Normally wins the local bundesliga. It is a very big game and a lot of people in england have commented on how english teams after last year being in the , there is no english teams there despite eight English Premier League clubs are in the top 20 World Football play in terms of revenue. Anna david, good morning. How will we see the game continued a change . Id meant we did not see it for a long time. David i was heartened yesterday by scottish fans saying that september 14 there will be fans allowed back into scottish stands. Football without fans is in a difficult place. I think so far it has done incredibly well. Restarted in many European Countries have done well to finish without too many hiccups and without fans but to keep interest going, personally at think you need the fans. It is a different experience. It is not as rich and experience. For the moment, we are just pleased as fans to see these big games coming along. Matt the union club here, the former east berlin team, has a cool idea that they are going to be testing fans that want to go to the games. As soon as you get a negative result, you get your digital ticket authorized. They are going to do a trial run. And they need the fans because this is what brings a lot of the revenue. Cobid ost has the how much money has the covid pandemic cost football . It is not just the spectators that are not there. It is the renegotiation of the broadcast contract. Broadcasters are saying we are not getting the same product that we had. A lot of the europe football is the passion and excitement of the fans in the stadium. Games is showing these better than nothing, it is not the real thing. However, if you look at some of the big, take clubs like Manchester United and bayern and liverpool, they are not so dependent on spectators. Only 70 ofit is their revenue 17 of their revenue comes from spectators. They dont need them in the short term as much financially but they do need them in the longer run. If you stop going to football, you can get out of the habit and the next thing is people wont be excited. There are so many different i thinkr contractions, football needs as soon as it can. But the Health Considerations are still considerable. Anna surely something to work out. With, thank you very much the latest on football and how it is changing a midst of the pandemic. We have numbers coming through from germany in the last few minutes. German august and you factoring emi, 53. Unlike france, we see it as above 50, the german number and better than the estimate that only by a bit. The Services Number is also above 50 but substantially lower than the estimate. Was 55. The forecast we have seen a sizable move in the euro as a result. Trade, downere we about 0. 2 overnight. Perhaps or sustaining those losses with the german number. Up next, could owning clothing be a thing of the past . We hear from victoria prew, ceo of hurr collective. What is it like running a sharing economy business right now . We talk about that with her when we come back. This is bloomberg. Anna welcome back to the European Market open. Volatile to start trading today. Downtse 100 underperforms 081 . 0. 1 . Ndemic has the pandemic has dealt a blow. This week the Luxury Department store launched a partnership with hurr collective joining the ranks of the runway in the United States. Targeting millennial shoppers looking to save. We are joined now by the tory approved, the ceo of hurr collective. Good to speak to you this morning. How big do you think this sector can become versus retail of clothing . How big well rental be . Thatria our hope is rental will be the future of fashion. See in the next 25 years, rental taking a major and being a much more every day occurrence. If when i think of renting highend clothing, i think of going to a gala. Easy. Y come it is i buy one tuxedo and im done for the rest of my life. For my wife, going to a ball or a gala, something where you might have just and more than 100 or even 100 or even 1000 pounds on a dress, how many of these things are happening these days, victoria . Victoria rental has moved quite significantly shifting from a , to something that has been incorporated much more each day. And wrench for vacations other kinds of many events. Up there every day wardrobe to be more elevated. For us, it is shifting from something that was just a down something that is 40 pounds to rent for a few days. This is done much more frequently now. Changes havends of you had to make around the business due to the pandemic . I used to do car sharing a lot more before the pandemic than i do now, for example. Does this challenge a model that requires sharing items . Victoria we have always been very clear about our policies regarding hygiene. Deliveriesactless during lockdown and we have also been very clear about what is required from the users. We discuss drycleaning technology. Part, our job is asked leaning how renting is safe. And weve had a great response due to the transparency we have been able to provide the customers about how we operate as a business. Is for theume this highest end of clothing. Youre looking to get 10 of the retail price for a rental . Victoria we accept any items on our platform that are over 120 pounds retail value. It is not just the highend luxury downs. Gowns. Collection, there is a niche between contemporary brands all the way through to the designer and of the spectrum. Atwant to bring high fashion daily fashion prices. That is the goal of the project. Anna renting might make Financial Sense and environmental sense. Is it having an impact on the amount of clothing, the sheer volume of clothing that younger people are buying . That remained something of an issue for the fashion industry. Victoria what we want to try to do is stop the purchase and where it once outfit. We are calling on the industry to become more circular and fundamentally slow down. We want to extend the lifespan of the clothing that is already in existence and get more uses out of that clothing through sharing with other people. Matt where will you look for growth, victoria . Victoria we are based in Central London at the moment but we are scaling rapidly across the u. K. We are launching our second help in manchester lit our second hub in manchester later this year. This marks more excitement for the customer and gives them an alternative. We are giving them access to designer fashion. Want to bring fashion to the u. K. Customer. Anna thank you very much, victoria. Pictorial crew, ceo of hurr collective. We are 47 minutes into a trading session. It has been fairly flat and slightly volatile this morning. Here are todays top corporate stories. Ch say the bionte vaccine they are working on will be ready in october which would make it one of the fastest moving vaccines in the world. Deal toany secured a provide 100 million doses of the drug to the United States. Emirates has decided on a preferred mix of boeing widebodied planes. The focus will likely be on smaller aircraft rather than big jumbo jets. Negotiations are still ongoing about the timing of deliveries. The emirates would prefer the smaller planes sooner rather than later. Ayer has it theb some women say the contraceptive has failed to provide prevent pregnancy. Moreayout is considerably than it paid to acquire the company that made the device. That is your Bloomberg Business flash. Matt . Matt up next, commodities from copper to gold and sugar and cocoa, prices are soaring. That could painted a dark picture for the dollar according to our mliv editor, eddie. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. We are 51 minutes into the session and were looking at loss on the ftse. And slight gains on continental equity indexes. Up 0. 25 . Some individual movers include a the o shall easyjet climbing after the u. K. Portugalrridor with has been reopened. You can see those shares trading. 79. 09. At anna the market is moving. Theing us now from our is market live editor. I want to ask you about what is going on in europe. The euro dropped quite a bit. 0. 2 on the pmi data. Back some of those losses since. The numbers are spooking people a little bit especially the Services Numbers. Those numbers have been fairly weak in france and germany. Simply because people are not spending money. That is going to really hit europe hard. Germanys manufacturing a fairly narrow beat their. There. Matt we have been talking for a little while about the crisis we are seeing for copper really for commodities across the board, it would make you think that investors are betting on a Global Economic resurgence but is it just that the dollar is falling . Eddie i think you have hit the nail on the head. Commodity markets have been so interesting. You have seen a really big slip. Id like to look at the bloomberg Commodity Index excluding oil prices. Oil has been driven so much by what opec has done on the supply side. If you just look at copper, gold, and the Agricultural Commodities come you see a different picture. We have seen those rally really hard from the lows. Gold is trading at multiyear highs. Commoditiest these the fact that they are both rallying tells me that people are not buying this on a demand recovery but are buying commodities more on the expectation of inflation or on the expectation of a weaker dollar. Anna let me ask you about the pound. 1. 32 is where we trade. Up 0. 2 . Figures fromdebt the u. K. Government. What are your takeaways . Eddie markets love big, round numbers. Feels like the pound is not quite done yet. May haverly because we seen the bottom drop out. We have some fairly big brexit deadlines coming up. And the rhetoric has just been building up on that. I think the pound is at the precipice. Talking to my colleagues on market live, most of them are still bullish on the pound in the near term. Matt most of them are still bullish on the pound what are the i wonder what the worst Case Scenarios are . Everyonesrd forecast with a deal priced in and i wonder what people think if there is not one. Eddie the brexit situation and europe more generally has become the boy who cried wolf. Renegotiations it seems like crunch talks every time we think this is it. The whole of everything is going to collapse. Downr we kicked the can the road or we get a deal are we punch things through. I think that is what people are banking on. But that could set us up for a big disappointment if we do not see that coming through. In december, Boris Johnson could say we are not going to extend and we wont get a deal and we will walk away on the btl. On the wto. That sets us up for a significant downside. Much eddie, thank you very. That is it for the European Market open. Surveillance is up next and they will take you through the latest on the markets. That is up next. Biden causes his opponent National Embarrassment. He promises to support the working class. Tech continues to grind to rally. The nasdaq hit a new rally, propelling higher. Stocks pose modest gains, this as vaccines are on track for regulatory review. Europeela merkel says should never return t