Transcripts For BLOOMBERG Bloomberg Surveillance 20240712

The german chancellor says the cost are two great. 00 too great. Good morning, everyone. This is bloomberg surveillance. I am Francine Lacqua here in london. This is what markets are focusing on, partly what Angela Merkels, partly Emmanuel Macron. Let me go through the impact heavy on the markets. Areou look at stocks, they really fluctuating after data from the economies here in europe, and that is really costing casting doubt on the resurgence virus infection. We have french manufacturing unexpectedly contracting in august. Highlighting the need for further stimulus. I am also looking at offshore to extend less than six months, seven months, actually, when china market from the pandemic became one of the worlds fastest. This is what we are getting in terms of pmi out of the eurozone, expectations or certainly there in mind with what we were expecting. Barring 50. 1. Coming up later, everything you need to know about Exchange Traded funds. Iq europe is back. Exchange data funds. Pmi worse than expected. Now lets get to the bloomberg first word news in the u. S. , we will start with the u. S. And iran, a demand to reinstate global sanctions against iran. The secretary of state, mike pompeo, is hinting out at european hitting out of european allies, accusing them of failing to lead and refusing tehran. Iran is pushing back, saying the u. S. Is attending to mislead the world. Former trumpet advisor team trump advisorer steve bannon is out on bail. Of saying he would build the wall for a campaign and then pocketing the money. Alex is being treated abroad. Doctors say his condition is too unstable to travel. He is still in a coma. A plane has already arrived to transport him to germany for treatment. His team blames that amir putin phrase blames Vladimir Putin for his illness, saying he was poisoned. Bloomberg sources tell us the british negotiators sought to break the deadlock, submitting a draftfree trade agreement based on what they thought was Common Ground with the eu, but so far, that has not led to a breakthrough. And that is our first word news. Lets get straight to our first word news today. Has excepted the democratic nomination to challenge president donald trump. In a speech, he asks for leadership that will overcome Political Division in the united states. Mr. Biden the current president has cloaked america in darkness for much too long. Too much anger, too much fear, too much division. Now, i give you my word. If you trust me with it presidency, i will draw on the best of us, not the worst. I will be an ally of the light, not the darkness. It is time for us, for we the people, to come together. And make no mistake, united we can and will overcome this season of darkness in america. Francine well, joining us to talk about this and the impacts bevan,markets is james chief Investment Officer at ccla investment management. Do the markets believe joe biden will become president . There isthink increasing excitation that is entirely what the market expects. There is an interesting taza whether the additional spending mr. Biden will certainly undertake, per his manifesto, relative to the tax take that i suspect might take some 10 off the s p 500 corporate earnings. Francine so why do you think they will focus on . Is it tax . Is it Something Else . It seems like a lot of the rhetoric now is why President Trump should not be president for a second term. When do we arrive to the real policies of joe biden . James i would say there are four policies i would be having under clear scrutiny. First is the tax policy. As i said, i do believe it is likely to be worth around 10 to the s p 500 earnings in 2022, if fully implemented, given that the expectations are the index earnings would be about 100 65 next year, that is quite a big hit. Of course, this may be watered down, and full implication would require mr. Biden not only to take the white house but democrats also have control of the senate and the congress. There is a risk of course that mr. Biden takes the white house, republicans, however, can control the senate. That thwarts the capacity for him to implement his strategy, may be quite limited. The second issue, which i think is important, relates to his maiden america planning, and a rotation that he will seek to drive the domestic economy, and that will be good for domestic participants. The third issue is he is just as hostile to china as mr. Trump, and that is why you do not see any Material Change in the cold war that is such a big wrist to Global Markets in u. S. China relations. The third issue is mr. Bidens desire to curb climate change, and that will be really bad news for the fracking industry. Francine so, james, when you say, you know, a President Biden is just as hostile to china as President Trump, does it mean that the move we are seeing toward changing supply chains will continue and accelerate, and does that lead us to higher prices . Does it automatically lead us to inflation . James i think it certainly leads to a reorganization of the supply chain. The covid19 episode and lockdowns has reminded everybody that many supply chains are fragile, and it is not smart at having production from abroad if you have no control over the process. In terms of the possibility of inflation, i would say that one of the really interesting and important drivers of deflation over the last decade has been new technologies, and new technologies have the capacity to drive down prices by assisting productivity and enhancing processes and procedures, both for manufacturing but also for product specification. So it is not necessarily the case that the disruption of globalization leads to a step shift up in inflation. A far bigger issue, which i think markets tend to not recognize, are the involving demographics that are involving so many economy. Japan, as we know, has a rapidly aging population and is being mired in low, slow Economic Growth and almost no inflation for decades. I think europe and china are following in the same direction in terms of the demographic pattern, and most have a Slower Growth in my generally been expected than might generally have been expected. I think it is therefore underpinning continue to overweight u. S. Equity markets. So your favorite in all Asset Classes is, what, u. S. Equity markets Going Forward . And what is your least favorite . James well, i would say, stylistically, i am very much focused on the growth, and i am less concerned about which country i am invested in. Of for example, in terms growth, there is obviously the u. S. Information technology, but in europe, for example, i would highlight kearing, which is a luxury Goods Company whose principal brand is gucci. Fantastic european company, just not in luxury. Pharmacyuropeans growth is relatively risky, because they are pricing discounts, a return to a european recession. And although the pmi, the index numbers today were not strong, they are almost certainly not consistent for. A return to resurgence. For a return to resurgence. Francine james, thank you so much. James bevan from ccla investment management. Coming up, europe should Work Together to avoid another lockdown. That is the message from the german chancellor. She says shutting down just cost too much. We will discuss that next with james bevan. This is bloomberg. James bevan. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. I am Francine Lacqua here in london. Now, lets get straight to the Bloomberg Business flash we start with pfizer. The Covid Vaccine they are working on is on track for Regulatory Exchange next october. It would make it one of the fastest moving vaccines in the world. They previously secured a deal to supply 100 million doses to the u. S. Has a stay in california. A judge has allowed to challenge a previous order complying with the state law. The state wants them to treat workers as employees, a move that would upend their business model. Pay 1. 6 agreed to billion over is now withdrawn essure device. It caused bleeding and failed to prevent pregnancy. 39,000 lawsuits, considerably more than bayer paid to the company that actually made the device. And that is the Bloomberg Business flash. The german chancellor made comments during a visit to french president Emmanuel Macron. She said closing borders should be avoided at any cost. Meanwhile, brexit talks said to end today without an agreement. Bloomberg understands negotiators submitted a draft, free trade agreement, but so far, it has not led to a breakthrough. Ofs get back to james bevan ccla to look at europe and the u. K. As well. James, thank you so much for sticking around. We were talking about things that you liked and did not liked in the market, and you prefer u. S. Equities to european ones. Do you worry about the u. K. Leaving without a deal, and what kind of a pressure without put on europe . James oh, i think it is a terrible risk and with quite a high probability. I had assumed that with the implosion of the u. K. Independent statute, that mr. Johnson would go for an the basis he was always very hopeful to get full agreement on the way forward done by the end of the calendar year. He seems absolutely adamant that he will have a deal or no deal in place by the end of the year, and therefore in january of next year, we will have whatever we is a and that, i think, huge risk for the economy, one that is far more damaging, to my perspective, for the u. K. Economy. We fired an awful lot of money at the covid19 crisis through sunacks at mr. Fiscal largess. I would expect fiscal integrity across the arena meeting we can introduce for the first modernme in europe theories, whether the European Central Bank Activities actually Fund Government spending. I think we might affirm the commitment to buyin, 1. 3 inllion of Government Debt the eurozone, and the bank then 160itting by very roughly billion euros, all the cash. Ability tonies the be critical and is not get Corporate Cash flow. We need Corporate Cash flow to get the sector moving forward, to therefore restore government revenues. Expenditure on capital, and then to improve household confidence. So this shift, i think, from relying on the European Central bank to emancipating government is really important. I have a james, headline on india, which i will get to in a second, but first of all, today we found the u. K. Government talks about 2 trillion pounds for the first time ever. Going back to what you said, this is a theory that was really derided 10 years ago. What are the dangers, you know, unintended consequences of actually doing lmt . The modern, lmt, theory, is indicating that the market is better at allocating resources, and the efficient down with these aficionados is different, it from where it was. Talking about shrinking the private sector and allocations of resources. This is, i think, an issue of politics rather than economics. The jury will be out about whether modern monetary theory works. But the idea is a rising expectation that what we provide the market is not quite limited and is akin to pushing on a piece of string. The Government Spending route can absolutely drive forward. The question is what happens when inflation accelerates . Because the real factor of modern monetary theory is we pull back spending when government rises, because that would be the keynesian approach. However, there are a number of academics writing on modern monetary theory, saying what the hell, we can carry on even when inflation is higher, because we think government is a really important part of building a better society. Francine so, james, we have a headline from india saying india is slashing new curbs on visas cards coming from china. China may be a bit more marginalized in terms of influence, certainly when it comes to, you know, u. S. China trade, india taking a further stance to curb that influence. Does it have any implications on the chinese economy, and therefore on investment . James i would say that the real issue for china is dependency on dollar and flow to provide capital. I have to say most people anticipate that china generates its own capital. In fact, there is a very strong flow from the u. S. , leading by the federal reserve, typically by the french banks, sometimes via the japanese banks come into china, and that has been a significant factor. Reigning end be a of that dollar availability, i think the China Economy would weaken and present a significant risk for investors. That said, some chinese tech companies, like alibaba, our global giants and do merit portfolios. Francine do you see any value in some of the emerging markets . Yesterday, we also have the Turkish Central Bank decision. I am veryncine, absent or underweight exposure to emerging markets, because i still believe that they have over borrowed in the u. S. Dollar, and i think there is a risk that the u. S. Dollar rises again this year. The liquidity in the dollar begins to reduce, and that leaves emerging markets relatively restricted. I also anticipate that there is no reason to take on additional risk when there are so many great opportunities in developed markets. I can still buy fantastic companies with high returns on Investment Capital and or free cash flow. Stress see the need to for additional risk, albeit in exchange for significantly higher risk. Francine ok, so lets get back to what you like, which is u. S. Equities. How many bankruptcies are we going to see in the u. S. . Does that make some of your Equity Holdings in the u. S. Stronger, or do you worry about side effects . James i would say that we are likely to see a rising tide of bankruptcies in the states over time, but i would make two sub points, one is that an awful lot of those bankruptcies are in the old energy sector, and we are absent the hydrocarbon complex on the basis that it is on as wellthe planet as losing money, and in that it is at is a very risky place to invest in. Jp morgan is a giant and very regulator, so it is a core holding in our u. S. Exposure. The other area, of course, are the smaller retailers, because of the competition that they receive from the online players, such as amazon, and amazon is also a core holding in our portfolio. Francine james, very quickly, i love having you on, because i always ask you things that, you know, during the week you kind of have my little grace, i was thinking. James that i am annoying you with. [laughs] germany, negative, what is the reason behind that . Does that makes sense . James from my perspective, the negative rates are an absolute reason why i would not be in the bond market. Actually, one of the things about the corrosive implication about the negative rates, it means that an aging population, as is the case with germany, needs to save more to hit the capital they require for retirement. The more negative you make these rates, interestingly, the higher the saving rates is moving in germany. The same is happening in japan, and that is why the negative rates are absolutely not shifting economic recovery in core aging economies, and we ought to see a change, we ought to see a shift. Meanwhile, i think the german Banking Sector is uninvestable. Francine all right, thank you very much for the insight, james bevan, chief Investment Officer at ccla investment management. Now lets get more on u. S. Politics and the latest from new york. Postmaster general louis dejoy is said to be questioned over two days and capitol hill. That is as he has become embroiled in a political fight between the democrats and President Trump over mail and votes and the integrity of the november election. Joineddelighted to be for more on this by jennifer, our bloombergquint take reporter. Always great to speak with you. Why are the mail Service Cutbacks contentious, and how do they offset the election . Jennifer i do not know about you, but i feel like i have been saying postmaster general more recently than i have in my entire life. It is a big issue, mainly because, as you mentioned, President Trump has really tried to delegitimize voting by mail, and that is an issue for democrats, because this year, several democratic voters have said they are opting to vote by mail as opposed to voting in person, so the reason this has come into the spotlight is because louis dejoys costcutting actions earlier this year delayed voting and getting mail to voters, and, you know, leading up to the election, it is going to be an issue, and democrats do not want to be an issue. Democrats have spent the last few days during the dnc trying to reassure voters that voting by mail is safe, there is nothing wrong with it, they should trust it, but also, we are going to be paying very close attention to what dejoy says over the next few days. Today, he is on capitol hill, testing in front of the house committee. Monday, he will meet in front of a senate committee, so it will be really interesting to hear lawmakers pressed him on some of the decisions he has made and how this could potentially impact voters and impact mailin voting specifically, leading into november. And just to note, you know, his testimony on monday is something President Trump is not very happy with. He actually tweeted and tagged Senate Majority leader mitch mcconnell, asking him why the timing happens to coincide with the first day of the rnc. Francine . Francine jennifer, the Republican National convention is next week. What are we expecting . Jennifer details are still trickling in about what exactly we will see at the rnc. Unlike the democrats, who opted earlyvirtual convention on, President Trump was hoping to do something in person and crowds, which is what he is used to, but the speakers that we know for sure are going to be some upandcoming republicans, like nikki haley and senator tim scott, also some unconventional choices, like the missouri couple that waved assault style weapons at Peaceful Protesters earlier this summer that caused a lot of controversy. But separate from that, you know, President Trump is expected to make a personal appearance every night of the election and accept his nomination at the white house, something that has been criticized on both sides. But, you know, i think we all have to remember that President Trump is a former tv producer, and he has been following what has been happening at the dnc very closely over the past few days, actually live tweeting a lot of the events. And so we can only expect that it is going to be quite different from what we saw this weekend. You know, i am assuming he is going to want to paint a very drastic contrast what we heard from the democrats about unity and restoring democracy, francine. Francine jennifer, thank you so much for the update. Jennifer zabasajja there, our bloombergquint take reporter. Coming up, it is august, everything you need to know about exchangetraded funds. Etf iq europe up next. Journalists and analysts in more than 120 countries. 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. Francine welcome to bloomberg etf iq europe. Over the next 30 minutes we will be your guide to the market and Exchange Traded funds. Where you need to know everything about the funds and the flows. Francine still shining, eight of the 10 were focused on gold. We will ask of gold bullion can keep on climbing. European etf assets top of the 1 trillion mark. Equity and flows have underperformed. Fixed income. We will ask why. After a slow start, Exchange Traded funds are taking off. We will discuss how high they go. Despite that, Gold Holdings and etfs backed bible he unsnapped increases,treak of registering a weekly drop. Join us to discuss this is krishan gopaul. Great to have you on the program. You also have a new etf. What was behind the decision . I think what we have seen in etfs is tremendous interest, and that has been backed up by the inflows we have seen, so we have seen a record level, about 900 tons to the middle of it to around 3800 tons. It has really developed over the last 15 or so years, and the kind of environment we have seen currently has highlighted the benefit that gold can play, so we are seeing three key drivers for the investment inflows we have seen into these products. Firstly, we have seen increasing , the kind of risk mounting expectation that the economica recovery is likely to rather than aape v shape. Uncertainty over the coming months and years. And also the resilience in the equity market value that we are seeing currently is posing questions for investors. Thesecond key driver was Interest Rate environment that we have seen. From bothry policy governments and Central Banks has helped to lower Interest Rates, and that has brought down the opportunity cost of gold for holding investors. This year. The price gold is around 30 up for the year, or just under that. And that has helped flows as we see the rally progress. Anything there with two gold etfs . Krishan the demand we have seen is links to more products, absolutely, and there is increased competition. But at the moment we continue to see demand outpaced new products, and we continue to see inflows. I dont see that abating anytime soon. We will see added competition, we will see costs go down. Management will continue to be as a moment, demanding gold etfs remains strong. Demand in gold etfs remains strong. It looks like it will persist for some time yet. Francine if you look at flows in gold etfs, do you tell us when people want to hold it longer or shorterterm, and does that give us a sense of the risks that people perceive out there in the markets overall . Krishan absolutely, i think what we have seen in this year in particular with the inflows that we have seen, there is a growing interest in a Strategic Holding for gold, not just a tactical one. That has come over several months, and that is also due to the environment that we are seeing come as i mentioned, with the low Interest Rates but the heightened uncertainty. And . s about the and . Marks aboutestion the future. Thestors have recognized value that gold can play in this kind of environment, but Going Forward as we look to see how the impact of the coronavirus pandemic plays out, not just over the next several months but potentially even longer. Francine how many of these funds are actually backed by physical gold . Soshan so of the 18 or funds that we track, we look at those that are backed by physical gold. Normally that is in the region of anywhere between 90 and 100 . So the vast majority of these product are backed by physical gold. You look at the etf gold markets, some would say that it makes it a lot more volatile, the gold market more volatile. If we didnt have these etf, gold etfs, with the gold market actually look very different . Krishan i think it would look different in that it is an element of demand that wouldnt be there. Demand seen increased this year and not just this year but for a number of years. That has meant that there is kind of a demand for these type of products. I think they make it much more accessible to access the gold market, improve the ease at announce,omes in at per ounce. Tonssaid, with 900 globally, it shows that actually this is something that the market wants. It has become a huge element of demand that we see on an annual basis. When you look at, you know, the gold is doing well at the expense of what other etfs it is unclear to me, given who we speak to in terms of investors, whether the goal position is itd protection against inflation or if investors are afraid of deflationary pressures. Krishan we have shown that gold has worked in both situations, but what i think the western marks at the moment kind of suggest, there is a general lack of certainty. Round what when they happen absolutely, people are asking, rightly so, what does the future hold even the expansionary Monetary Policy and the fiscal stimulus that we have seen, and the risk that that may bring. And the altar low Interest Rates that i have already mentioned. I think it is reasonable to hask that this uncertainty led to some of the flows that we have seen, not just in etfs, but in news with gold more broadly. I think it is likely to be the case that this will persist for some time yet. We seem no closer to knowing the full Economic Impact of the pandemic, and governments continue to adopt a relatively easy stance to support these economists. So for the time being, it seems very much that the drivers that support gold, what we have seen in the first half of the year, are likely to continue. Francine when you look at etfs positioning for the future, i dont know whether there is a technical level for gold, and actually would mean a selloff in etfs. For those of us watching at home, or for those viewers watching at home trying to understand a little bit better the gold etf market, are they supported by Technical Levels . Dont necessarily look at the gold pricing that way. I think what we tend to look at is more of the fundamental drivers, and as i have said, there are many which are kind of propelling this etf investment that we have seen this year, at the record levels of 900 tons or so. The gold price is reflective of many of the drivers, which have been driving etf demand, and there is a good reason why it is where it is. Thank you so much for joining us. We will have plenty of course on gold. I didnt know this, but i went on to a world gold council, and they have, you know, Global Demand transfer q2. I think that is available to everyone. That was our great guest looking at gold, and we will have plenty more, of course, on gold throughout the day. We continue more on etfs. Coming up, active etf launches will offset to take passive launches of etfs this year. Why investors want to add it to their portfolios. This is bloomberg. Is bloomberg etf iq europe. Im Francine Lacqua. Lets discuss one of the biggest etf trends of 2020. Set tolaunches are overtake passive launches for the first time ever. Rule fcc rule a new sec joining us now on the phone our guest from bloomberg intelligence. Thank you for telling us. Thank you for joining us. Why the sudden interesting in active etf this year . One thing that you alluded to, i think there are two things one is regulation and the other is performance. This new sec rule has been fully implemented this year, and what it has done, it started last year, the biggest different the biggest difference is it treated active and passive etfs similarly. The other piece of regulation was disapproval of nontransparent etfs. This was a big hindrance for the traditional active managers that wanted to jump into the etf landscape because they were reluctant to show this. The new structure is approved, so you are seeing a big uptick in active launches. You are seeing new participants jump into the market that were not there before. T. Rowe price, federated esa, these are all big active shops in the u. S. , and they are starting to jump in. The other element is performance. The uptick in launches and the passing of regulations, coupled with the really Strong Performance this year, is drawing a lot of attention to the area, and that is why youre starting to see a pickup inflows in these active etfs. Thecine what are some of key reasons european investors might want to look at these . In the u. S. , to draw this parallel, there is a very big tax advantage to the etf in europe. Even if you dont believe in active or you dont like the strategy, you already gain because of the tax advantage. Advantage ise tax not really there, but there are in europe. Its to it the volatility we saw in march really highlights this, and i think what is the important benefit of the etf structure is the isolation of activity for shareholders. U. K. Property funds locked up why . Because there were a lot of early redeemers in these funds and they end up locking up anyone who is still left in the fun. What an etf does is isolates the activity from the other shareholders. This is really key. If you want to get into a funder out of a fund, you are now passing shareholders that are in the fun. A desknew creation or fund, theo a mutual etf isolates that come and i think that is one thing to consider when looking at the active etfs. Andve more efficient isolated way to get out of this fund without passing by other shareholders. Francine thank you so much for the update. At the nuncios several fungus more next. This is bloomberg. Francine this is bloomberg etf iq europe. Assets under management, you jeff that etf in europe has crossed the 1 trillion mark. Equity inflows have underperformed. Since the march bottom fixed income etfs have taken in three times joining us on the is addressing andreas zing. Thank you for having me. Discussion active versus passive is a discussion of the past. It is more a question of high versus low cost, and a lot of investors have actually realized that cost is the main driver of return, and they have decided to allocate more assets, be it active or passive, into lowcost vehicles, and that is why etfs have benefited so much in the last three years, with tremendous growth, above one billion. The future looks bright. We think the growth will continue at about 15 per 20 sent about 15 to 20 per annum. Francine if you look at some of the flows in etfs, what are the big trends . Is it because it is running into gold and forgetting about equity etfs . The trends andreas you mention fixed income etfs. You mentioned the asset class in the fixed income market with the highest inflows dominate the market. If you years back, fixed income etfs were not really redolent, it was pure equity and to a certain extent commodity gain. It has completely changed, and we have seen inflows this year potentially because the fed and other Central Banks started to buy bonds and etfs, fixed income etfs. We have seen even higher growth, but for me it is also a good thing for the coronavirus the coronavirus is a bad thing, but a good thing is that it could prove that they hold what they etfse, and for me, it are kind of heroes of the crisis because they delivered with they promised. There was always liquidity. It came at a price that is very clear, but they delivered on the promise and they were always tradable at reasonable costs, very transparent. So this is why we see so much more in fixed income etfs, and the other trend i would like to mention is sustainable etfs. It is incredible this year. You mentioned the etf in equity low flows, but sustainable etfs are on a run. We have seen about 17 billion inflows in that relatively new category. Want to talk i about more about ecg etfs. You tell me it is boring, but you tell me they are also picking roads for markets. That is not boring at all. Now lets look at there is an etf for that. Every week we dig down into some of the big trend Exchange Traded funds. This week, here is Annmarie Hordern with a new etf for that. Annmarie good morning, francine. This week there is an etf for that. We are looking at all the stoxx that are exposed to the work from home sector. We are working from home, shopping online more, even socializing virtually, and we see massive inflows into thematic. These areows starting to heat up in terms of these inflows. They are set to drive record inflows for the category. Assets to or than 70 billion, thatmberg says that could push thematic to the number two sides among etf sectors. 2020, 11. 3 billion were added. So in this case we could far outpace the 2017 record of 11. 7 etfs. Quickly, the getting to one of those, i want to show you Cloud Computing. This one etf within the Cloud Computing fund, they have names like zoom, which purchased the nasdaq 100 overnight into a fresh record. Flying,it absolutely outperforming a come and we also see these massive inflows. So obviously investors that do not want to take on a specific exposure to one company but want to get that work from home exposure, are really flying into these etfs. Francine Annmarie Hordern with a full wrap up. Emory basically describes my life shopping online, staying at home, not going out. Abouts, we were talking esg. If you look at the european etf market, it is definitely not as mature as the u. S. Market. Will the pandemic and what we have seen on the other Asset Classes mean that the european etf market will mature more quickly . I guess so. It is almost difficult to compare europe with the u. S. Because in the u. S. , there are several factors in play which are not relevant in europe. For example, pension saving is a thing which people rely on the government and dont self invest. It has a lot to do in the european etf markets, to bring it at the same level as in the u. S. But nevertheless, i think we see tremendous growth. We will continue to see tremendous growth because etfs are such a fantastic instrument, and they make lowcost investing , they democratize lowcost investing and everybody has access so you dont depend on a just router who kind of puts that etf in your portfolio who dont depend on a theributor who kind of puts etf in your portfolio. What it will take a few years to catch up with the u. S. Andreas, very quickly, and 20 seconds, what is the most exciting out there . Is it esgs, or is it these trends on working from home that you can buy through etfs . Reas the etf of the week no, i think what is really exciting what excited me, as i said initially, and the corona crisis we had a perfect storm. Nothing was liquid except for two instruments, one was government bonds and the other instrument was etfs. That excited me very much because everybody kind of was waiting for that perfect storm to happen, and everybody challenged us, the industry, whether etfs are liquid in such a market environment. And they have delivered on that promise, and that excited me, and a lot of people have seen it, and they will have assets from singleline and actively managed funds from other funds, into this. Francine andreas, thinker so much. Andreas zingg, thank you so much for your insight. That is it for bloomberg etf iq europe. 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. Democratic nominee joe biden causes that calls his opponent a national embarrassment. He promises to reform the working class and taxation. Propelling Global Equities higher, european stocks post modest gains. This as pfizer says its vaccine is on track for regulatory review. Angela merkel says europe should never return to a another fullscale shutdown. The german chancellor says the costs are too great. Good morning, everyone. This is bloomberg surveillance. Im Francine Lacqua in london. Tom keene is in new york. Manufacturing pmi not as good as expected. That is underlying the message from Angela Merkel and Emmanuel Macron that we had yesterday, saying despite a resurgence of cases, they will try to Work Together as a team to make sure they cannot go into full lockdown again so that a transfer still happens. That was a