The bloomberg. Back to school. Boris johnson appeals to parents to send children back to class even as a resurgence in the virus in europe hits hard. Saysu trade commissioner he is profoundly sorry for attending a golf dinner in the midst of the pandemic. Of as push higher on hopes thaw in u. S. China trade relations area and markets turn their attention to this weeks virtual jackson hole and the fed fighting crisis measures. Trump and powell both on thursday. More than 100,000 people protest against the fellow russian president in rainy minsk the belarusian president in rainy minsk. We are just under an hour away from the start of cash equity trading across europe and in the u. K. Lets take a look at futures this morning. We have some decent green a percentre than half gains across the indexes. One of the reasons is optimism that the u. S. And china are going to get along a little bit better amid reports administration is telling Tech Companies they can keep working with tencent. Take a look at equity indexes. After finishing higher for a fourth week on friday, they are up yet again today to kick off the week. S p futures up 0. 3 . Lets pick up on the gmm talking about we chat, the tech story. That is having an impact on hong kong. The hong kong market, the hang seng up. That is the tencent name and other tech names to the upside. Asian tech getting a boost with what you talked about in terms of the relationship between the u. S. And china. Also in the mix, what the u. S. Is doing on the virus itself. The vaccine is being talked about in some quarters. If that is the case, is that going to be positive . Blood Plasma Treatment also seen as a positive. Back foot. Dollar flat to negative. We have the jackson hole symposium taking place. This time it will be more virtual in terms of that symposium. But it is taking place. Three minutes past seven them in london, lets get a first word news update. Has aent donald trump coronavirus treatment that involves blood plasma from recovered patients will be expanded. Widens access to the before researchers know how works. The white house is considering fast tracking the Oxford Astrazeneca vaccine. A bill to Roll Back Service cuts at the u. S. Postal service after concerns the changes could hit male in voting. Lawmakers have allocated an additional 25 billion dollars, but the Postal Service is concerned by requirements. They see it constrains the ability to increase efficiency and reduce costs. Phil hogan is fighting to keep his job after attending a golf Society Dinner during the coronavirus pandemic. It came after the government said no event should be organized that cafes and restaurants. Hogan had a key role in trade talks with the u. S. And the u. K. Tropical storm laura is making its way to the caribbean. It has hit haiti and is closer to cuba. It will make its way to the u. S. Gulf coast which faces a double whammy. Hurricane marco is rushing to the mainland in louisiana today. Over half of all oil output in the gulf of mexico has been shot. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt stocks rising in asia. You pointed out those gains in hong kong big. Tencent adding 30 billion today area today. The u. S. Also showing gains in futures today as investors are looking ahead to a policy speech by Jerome Powell later in the week. The virtual jackson hole summit, we will cover that event for you thursday and friday. For more on the markets we are joined by mliv asia editor Garfield Reynolds in sydney. I wanted to ask about positive developments that we have had in data. You put up a chart on the mliv blog showing data points have the previousten , thaty a big large and was after a big drop and there are a lot of things that skew the picture. In the immediate scenario, this is quite positive. That is one of the underpinnings for todays rally. You cannot really treat data at the moment the way you might normally treat data. Is seasonally adjusted. That means it is taking into in your standard sort of the year where in the summer people were out doing the work, going on holidays. Way areout the massively the way our lives are massively different this year and that makes it so much harder to try and treat data the way you would normally treat data. Also beatingat, the previous indicators. You cannot really blame investors for looking at that and going, this is positive, because you cannot just exclude data altogether from your calculations, but i tend to think they should be discounting the potential for a lot of problems later on. Inevitably, the surprise factor will turn the other way. With relative to last year. Anna let me ask you about the tech rally. In asia there seems to be a number of reasons this morning to be optimistic about tencent lookinghat or perhaps ahead to the u. S. Election, some investors thinking about the possibility of a bite and when biden win and maybe that clears the way. Story is veryech interesting this week. Is how is concerns the Trump Administration going to deal with tech . The backdoor channel comments, chat, that about we has reassured investors that there will not be any bite, which would reinforce some of their expectations into election season. Let us see how we get this week with Republican National congress. We might get more harsh rhetoric. Will we get action . If we dont, you also mentioned , might limitential any downside. That downside is there to be explored if investors get spooked by some actions that might be taken. Anna next on the program, looking for inspiration. Investors are most overweight european stocks since 2018. Stoxx 600 looks to find recordbreaking gains of the s p 500. We will discuss next with the coutts cio. Matt we are 48 minutes from the start of cash equity trading looking at green arrows. Top corporate stories from the terminal, Goldman Sachs expects almost a quarter of the temporary layoffs in the u. S. To become permanent. It says some 2 billion could remain unemployed well into 2021 while the transition rate from temporary to permanent layoffs remains historically low, the figures nearly doubled from june to july. Some of alibabas biggest investors have converted liens of dollars in u. S. Shares for hong kong stock. That is in part to avoid potential u. S. Sanctions and the delisting of chinese Tech Companies. The firms include Billy Gifford and matthews asia. It is a sign rhetoric from the white house is prompting investors to take measures to avoid the fallout. Saudi aramco has reshuffled its senior management. Inis putting a Top Executive charge of portfolio optimization as the Worlds Biggest Oil producer just lowered crude prices. Adjusts to lower crude prices. That is your Bloomberg Business flash. Investors who have tiptoed into european equities have 20 reasons to stay put despite last weeks selloff. The stoxx 600 has outperformed the s p 500. Part of the economic and Pandemic Recovery stories still look stronger in europe, though cases are rising again. Europe also has unprecedented coordinated fiscal stimulus on inside. We are joined by alan higgins, cio of coutts and co. Let me start by asking about european stocks. The yeartodate numbers, the u. S. Performance today is so much stronger when you look at the essen and the nasdaq versus the snp and the nasdaq. P and the nasdaq. We still like u. S. Equities as well. At the margin we are focused more on value areas. What we know about the United States is the u. S. Stock market is not necessarily the economy while in europe the stock market is the economy. Yes, allocating to more typical value areas, and when you allocate to europe, you are adding value here. Does the vshaped recovery theory still hold up when we see things like 5000 new infections in a day in france . We are starting to see a real pickup in virus cases here in europe. It looks like it could be the second wave. It does look like that. Firstly, weped, know nothing, which is always a good one. If you look back in history there has always been a vshaped recovery from every recession. We are aware this one is quite unique and a very different type of recession. In the u. K. , hospital bed admissions for covid are down 90 from the peak. The burden on the Health Services much much less. A way to goou have through. That is what we are seeing this vshaped recovery. Anna the consumption side. Let me ask you about value stocks. Where are you looking within value to seek some kind of pickup . U. S. , it is not just ope where you have these this mismatch, if you like, between the parts of the stock market that are unaffected or even has benefited from the severe recession and the Health Crisis. If you look at the united bankerswe have added to for example where you have jp morgan or circa 12 times earnings, dominates the sector, and a 4 dividend yield. When you look at that, the ational u. S. Stocks, you have stock market in the u. S. , so even in the u. S. You can allocate, it should be said that comes from a starting point of overweight growth and quality sectors for quite some time at coutts. What we are doing at the margin by adding to banks, by mitigating that. Stocks, isg to bank that i mean, that is a real vote of confidence i would say. I am assuming it is not acrosstheboard the board European Bank stocks, but is that a really good sign for the recovery, that you think bank stocks are going to be healthy . You are right. Recall, we focus more on the debt side. Especially subordinated financial side. Creditor ofeing a National Champion banks in europe rather than stock investors. Where higher return on equity is enforceable and huge provisions have taken place by the major banks, we see more possibility for the Equity Investor in the u. S. We have not quite got in step of allocating in europe. That tells us a lot as well. We are going to get more from the cio of coutts briefly. Coming up, jackson hole goes viral. Investors wait for signals from Jerome Powells speech on the move. Next crucial policy we will discuss what to look out for. For. Anna 40 minutes until the start of cash European Equity trading. Jackson hole is going virtual. The feds procedures annual fixture has been pushed online by coronavirus. Investors will be looking to Jerome Powell beach on thursday. He is expected to talk about the lower rated feds review. Also speaking are Andrew Bailey and philip lane. Alan higgins, cio of coutts and co. Is still with us. The bond market is holding on to all details around inflation this week area what will you be looking out for . I know you are in general underway government debt. What are you going to be looking for from a u. S. Treasury perspective . A may be interesting to the they will have inflation. We are seeing slightly higher inflation globally, quite natural after the amount of stimulus, actually cash injection. If you look at it from our perspective as an investor, what. E see is inflation rising the central bank is going to say we dont care. We saw this in 2011 where inflation went beyond that. Interested i in that very interested 5, 6, seven number, the kind of numbers Central Banks find it hard to avoid. The nightmare scenario for bonds and risk assets, would be higher rates. For now there is a big tail risk. Central banks actually reacting to inflation. Reassurings would be , how they ignore an uptick in inflation. Matt on the consumer level we hear about it all the time with groceries. On big ticket items, you really do not see manufacturers with that kind of Pricing Power. Im thinking about cars or appliances. Do you think they are going to be able to get that Pricing Power back even with this wave of bankruptcies and incredible unemployment numbers . Bankruptcy is very much on the u. S. Side, you are right. There is a oil and retail oriented bankruptcy uptick in the United States area not so much in europe. You just have to look. If you look at the money supply numbers, they are in terms of high. But it isr point, business 101. If you have the chance to raise prices that all, you will definitively. Tentative signs in the u. K. For example, car prices are holding their own. There seems to be a boom in people wanting cars if not increasing in terms of secondhand prices. We would expect modestly higher inflation. Central banks will just ignore it. Anna Central Banks will ignore it. What about the credit market . You have talked about the default rate. U. S. ,y in the particularly for large companies, i suppose. How difficult do you think the situation will become . Because of the nature of chapter 11, the ease of it and the ease of the company is reinventing themselves very the leveraged u. S. Oil and energy area, i think we are seeing a default cycle. Europeansed on europe, credit not quite interesting with the fact that basically one, structurally you dont have chapter 11, two, you have Government Support of corporate sector. Credit i think is still an attractive play. When you go to higher credit you have the Federal Reserve and the bank of england also bank credit. It is hard to say about certain aspects of the u. S. Equity market. Really appreciate your time this morning. Great to have you with us. At coutts. S, cio next, new covid concerns. We were talking about this with allen in europe as the continent seems numbers climbing again. In some places, to records we have not seen since the middle of april. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Anna come back to the European Market open this monday morning until the start of cash equity trading. U. S. Futures point to the upside. Asian dominated by optimism around tech stocks. Coronavirus treatments based on led plasma from people who have recovered from covid19 is set to be expanded in the United States. President trump is calling it a powerful therapy even the researchers are yet to fully understand how well it works. In europe, a resurgence of the virus. France reported almost 4009 hundred new cases over a 24 hour jumpd, the largest oneday since the previous peak in mid april. Maria tadeo joins us from brussels. What is the picture looking like across europe . The number of cases climbed to levels we have not seen since april, may. Yesterday the french put out that data that shows a big oneday increase. When you look at pain, now very much the epicenter in europe, cases have just rocketed in places like madrid. The government is under huge pressure to declare the state of emergency once again. The idea of a second wave is now openly talked about in spain. The numbers have not changed across europe and that is creating a lot of worry that perhaps we are going to see more cases climb up as we get to the flu season. Also questions as to what does it mean for the recovery . With theoing to happen school year . This is a crucial question for europe. Schools open in two weeks time. It is key for parents to go back to normal work hours. Are we going to be able to open schools . A lot of people are saying the Mental Health of children to get back into those schools. I wonder about the economic equation here. We have heard so Many National leaders say they are not going to back along lockdown. What are we seeing already . People who have canceled vacations in the past week. Im sure retail is being affected as well. Masks are being required a lot etc. N what are we seeing in terms of the effects . The country cannot be stopped once again. The Italian HealthMinistry Said he does not see any work a lockdown a need for a lockdown. If you look at the situation right now for a country like spain, it has been a summer of mystery. Hotels,seen restaurants, say this is not a summer like we are used to. About one for every three cancellations. You had very strict new rules come into play like not being and that for a bar, for a restaurant, it is difficult because you have to accommodate that eckley and it costs money. You also see in italy the idea, these restaurants have to close earlier because of young people that are spreading coronavirus. They go out, they drink, they dont respect the rules. You have to take in less people and close earlier than usual, you are not making that much money. We heard last week from Angela Merkel and emmanuel macrons adjusted a lockdown should be avoided at any cost. If youre going to do that you need to do other things. What measures have they taken to control the virus without fully locking down economies. That is a big question at this point. Governments are taking measures. We have seen italy say we are going to cut closed on our night life. You have to wear a mask. There is already speculation that the french are going to make the use of masks mandatory at all times at work. We have seen social distancing has been reinforced. That does make you question what do you do next. A lot of this has to do with stepping up testing and also tracing when you get people coming from other places and that particular area of testing if there able to link is someone who has coronavirus, who has he potentially infected . If you go on the streets and you pretty much 24 7. Absolutely, but i wonder, in france, people where the ,asks, but they take them off and it will be interesting to see if the french make smoking on public streets illegal. It does seem people who wear masks feel like if they want to smoke they can go ahead and take off the mask. Almost no matter where they are. It is interesting to see the laws being changed. Maria tadeo in brussels. Lets get over to china right now. Xt board is rising on the first day of trade under revamped rules that remove daily price limits for new stocks. We have seen ipos and a lot of them have risen 500 percent in one day. For more, Juliette Saly joins us. Talk to us about these changes chinext. Ina no limit for trading on new companies. An average of 50 of the 18 companies that hit the index today. Means doubling. This is part of chinas efforts to really liberalize a 1. 3 trillion market, if it goes well, perhaps similar effect in shanghai and shenzhens mainboard. You mentioned moves coming cord jumpingtric by that much or more. A phone charger maker gaining a valuation of 10 billion within just minutes. You can see just how volatile this index is. We see it go up or down by around 5 . A manager at a beijingbased Capital Management company says new shares are rushing to the market at a fast pace. Its putting a lot of pressure on existing stocks which already traded these high valuations. Let us take a look at how the chinext has fared. At one point it was up 51 year to date. It pared back a little from gains you saw. Still such an outperform or when you look at the likes of the csi 300 and the shanghai composite as well. Is performingndex better today really just shows you as well the trust you have invested. Rebounds come into place. Anna thanks very much. Joining us from singapore. Coming up, the rise and fall of wirecard. We chart the payment companys collapse and ask what happens next. Matt 20 minutes away from the start of cash equity trading in europe. Green arrows in terms of futures on all major european and the indexes. Dac inthose is the frankfurt and it is losing wirecard weeks after the financial Payments Firm collapsed insolvency following years of allegations of fraud. A blames fall sparked game in corporate and political circles with much of that anger directed at the german financial regulator. Joining us now to speak about the rise and fall of wirecard is benedict kammel from here in berlin. The scandal i feel like has been on everyones radar for years, prosecutors felt like everything was cool. Thats right, and that has really there are two scandals going on. One is the wirecard pumping candle, but the other is the scandal of not uncovering the scandal. Regulators and investigators are taking a hard look at themselves. That is the second probe underway now. How can it be that a company that was really under this cloud , going back more than a decade, the first allegations of accounting irregularities going back as far as 2008, how can it be they were not properly investigated . Investigators were investigating people behind this , so journalists and analysts that came up with these allegations. That is the scandal behind the scandal when it was all out in the open for many years. Two scandals run into each other. What is happening next . Wirecard is getting kicked off the dax today, a shortlived career on that index. The 30 biggest companies. The company is insolvent. Administrators trying to flog what is left of the wreckage of wirecard and there is not that much left. Assets are worth a fraction of its 300 billion euros. See greators will not returns on this. We are seeing some assets already being sold in the u. K. And brazil. Also wirecard bank. They had a banking license. Thats not part of the insolvency proceeding. Perhaps really picking apart the company and seeing whats left of it. Matt it is kind of interesting they are replacing what seems like kind of a newfangled newery with another even fangled company. Delivery hero is replacing wirecard in the dax and they dont even make any money. There are some people out there saying, we are replacing one company that does not have much of a business model, or a shady one, with another one that has a business model. People are buying food online, getting it delivered and all that. They have not made a profit yet. A young, unproven company. , no sort of return in terms of profitability. Germany, therst in desire to have more punchy Tech Companies out there, the only Major Tech Company is sap. There was always a desire to build other companies around that, to have more on the dax, which is still a very oldschool volkswagen. Ikes of those dont really exist over here. Heropany like delivery might be able to spawn their own indigenous tech industry. I guess berlin is the hub for these startups. And of course the headquarters of delivery hero as well. Thanks so much for joining us. Door. To us from sale and lets get the bloomberg first word news. Hit a major has natural gas pipeline near the syrian capital of damascus. According to state media has triggered power outages. No deaths or injuries have been reported yet. Syria says it is treating the incident as a terror attack. The European Unions top trade negotiator philip hogan is fighting to keep his job after attending a golf Society Dinner thrown by a Parliamentary Group in ireland during the coronavirus pandemic. He has apologized for the lapse that came the day after the government said no events should be organized at cafes and restaurants. Hogan has a key role in trade talks with the u. S. And the u. K. For the eu. Leaguest ever champions final without fans ended in victory for germany. Munich defeated paris last night. Only 100 people were allowed in the stadium due to restrictions. Europeanet to lift the cup to spending more than a billion dollars on players in nine years of qatari ownership. One of europes most exciting games ends with a score of 10. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Anna i did not stay up for it. I would be lying if i said i did. Let us turn to the mining sector. Matt only one goal, so you clearly did not miss much. Anna there you go. What have been over quickly. Fortescueing sector, boosted by prices. A chinese steel sector that power through the coronavirus pandemic. We spoke to Elizabeth Gaines about whether the optimism in china is likely to continue. It is always difficult to predict the future. We have a strong step in terms of crude Steel Production year on year. Very much seeing that ongoing Strong Demand. In terms of the outlook for the rest of the year we usually see the Northern Hemisphere headed into winter. We continue to watch that carefully. Continued shipment store customers, we have maintained an industryleading cost and are keeping strong margins. Things we can control including strategy and we are keeping cash flow. In terms of the Iron Ore Price, is it front and center, or are there other factors in place . China is the key producer of steel globally. Year,e 2019 calendar china was 50 of global Steel Production. 2020 that would have increased because there are other industries and parts of the world that happen more heavily impacted by covid. Critical toolutely the ongoing demand for iron ore. Production. Crude china is continuing to invest in infrastructure. Their economy has made a remarkable comeback from the impact of covid19 earlier this year. We see the ongoing strength and demand for iron ore. Are you concerned about the supply risks with vale coming back online . Had Significant Impact on supply at the beginning of 2019. Were getting, vale close to that 400 million tons a year of iron ore production. This year they have guided to tonsen 310 and 330 million. Have seen impact of covid19 as well. That production was there previously. The supply side impact. We are focused on influencing those things we can control. Delivering iron ore to our customers. It is a function of supply and demand. We are seeing very Strong Demand. Vale indicated they could get back to where they were previously. A rail project and iron ridge project. That is due for the first half of calendar year 2022. We are focused on our supply and keeping the settings right so we continue to generate strong cash margins. Is it inevitable the price gain in iron ore that we saw this year would be reversed . Predict whatke to the Iron Ore Price might do. It is a function of supply and demand. We are seeing very Strong Demand in terms of that increase in crude Steel Production, even just in 2019. Crude Steel Production in china reached close to one billion tons and is on track this your to exceed that. It is a function of supply and demand. We are developing our business, growing our business, so we remain very confident. The Iron Ore Price is cyclical. History there has been volatility. Cost producer we can continue to generate strong margins. That was the ceo of fortescue speaking exclusively to bloomberg. Next, our stocks to watch, including oil majors. We are on storm watch as weather Systems Approach the u. S. Gulf coast and affect offer production. Matt we are minutes away from the market open looking at stocks to watch this morning. Annmarie hordern joining us with a look at astrazeneca and others. Astrazeneca could get a boost. This comes from a report that Donald Trumps administration is looking to bypass normal regulatory standards to fasttrack the experimental vaccine from the u. K. Vaccinethe astrazeneca they are working on with oxford university. The u. S. Health and Human Services spokesperson said any sort of emergency youths emergency use authorization before the election was false. Thisng at credit suisse, comes after an report that they face a criminal probe for helping belgian clients hide they say they comply with all laws. We have to keep an eye on bp and royal dutch shell. Both of these companies have evacuated. Sohave seen more than 60 or of golf operations have to stop. Between storms coming into the gulf. Something we will be watching the rest of the week. Thanks very much. Bt in focus. Futures point to the upside this monday morning. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Anna one minute to go until the start of the first cash equity trading of the wake. President trump says the coronavirus treatments involving led plasma will be more widely available. The eu chief phil hogan says he is profoundly sorry for attending a dinner in the midst of the pandemic. Stocks push higher on hopes of a sour u. S. China trade relation. And more than 100 thousand people protest against the belarusian president in minsk. Peacefully. Ded matt lets take a look at futures here as we get closer to the open. We are looking at green arrows across the board. Stoxx. In a euro the live equity indexes are opening up, and we can see those as they pop up on the macro movers screen. The lefthand column will populate with indexes as they open up. The ftse usually the first out of the gate. It is up 0. 3 . After theg about 0. 8 Prime Minister of sweden gave a speech saying they need to take advantage of this crisis and move forward. The netherlands opening up, as well as the cathe cac. As these European Markets open andthey are all gaining showing basically 1 or more. European markets opening higher on this monday morning. In hongafter a bump kong and chinese listed stocks after the reports of a thaw in the u. S. China trade relationship. Managers becoming wary of stocks exposed to geopolitical tensions, especially ahead of the u. S. Election. Europe they provide the antidote. Fund managers are the most overweighted stocks. Europe is still 15 off its prepandemic highs. We are joined by our guests, global head of equities. Have beenmething i thinking about a lot because as we see u. S. Stocks, which are vulnerable to xi jinping and Donald Trumps relationship, u. S. Stocks still hitting new highs. 20 pean stocks are 15 to off the close of 2019. Why cant europe do better . Guest thank you for the question. It is a very good question because you have to answer it in two different ways. The first one is the leadership in u. S. Stocks. The leadership is in tech. If you take tech out of the equation, the s p is off its when they started the pandemic. Does not seem to have many Tech Companies, so the difference between them can be explained in one particular sector, when the u. S. Leadership where the u. S. Leadership is. Anna good morning to you. That is interesting. We are mindful of the different sector breakdowns on either side of the atlantic. In europe, where are you focus right now . Are you looking at cyclical names, Cyclical Companies that might pick up here . Guest i think that is the danger for market rotation. So far, what we have been dealing with is the effects of covid and post covid, and that lent a very big hand to Tech Companies, particularly companies exposed to online sales, retail, Digital Payments, companies that deal with enterprise in terms of outsourcing, or also in terms of how to get new customers. So the additional experience. If we do get cyclical recovery, and i said if, then that shifts. What we arey from toing in covid World Companies that are naturally exposed to cyclical recovery. This is what we are talking about in industrials, or even banks, which is banks with traditional exposure. The problem everybody has is theg out when we are problem everybody has is figuring out when. We have to figure out the companies that have the ability to take advantage flowing forward Going Forward. Matt what kind of recovery do you expect . Aest the path to recovery, lot of people have been talking about vshaped, ushaped. Really, the recovery has to be predicated on two things. The first and most important one and the easiest to talk about is getting a vaccine that works and therefore people getting back to the new normal, whatever that is. Actually, for us, what we are looking for is companies that are exposed to how the consumer and enterprise, and therefore the economy, will work post covid. What does the new normal look like . With quite a lot of the changes we have seen right now in consumer behavior, in enterprise behavior, in retail spending, and entertainment, it is likely to stay even post covid. We are going to go into a new world. Secondly, a lot of the focus at from nt is anna i was just about to ask you about stocks. I think we were going on to talk about the same thing. I wanted to ask about esc stocks because you are bottom up investors and you put the stoxx through a filter. People ask you questions about whether active management is the thing to be in right now. I am sure you believe it is. But where are you seeing opportunities in that space . Guest thanks for that. Actually, active management implies also active ownership of stocks. G, it looksok at es through the lens of whether companies are good in terms of people, in terms of the planet, in terms of equal opportunities, socially enabled, etc. For us, looking at esg is looking at companies that fulfill certain values or criteria that we believe will investors isrn for higher than expected, or the adjustment is good. When we look at esg, we are integrating esg into our ideas and in the way that we look at companies and pick companies, for over five years now. When we are looking at where the opportunities lie, you hear all the headlines from the regulators about recovery or change, etc. For us, we look at the companies that can take that or are ofblers of that in terms how you do business, whether it is in terms of opening up to diversity, whether it is companies that are basically looking to improve their ofironmental management their actual supply chains, etc. These are the companies we are focused on, and they dont fit in any particular sector. They are all companies that will be taking advantage of that. Anna thank you very much. Ghadir cooper, head of Global Equities at barings. Seven minutes past 8 00 here in london. European equity markets up by more than 1 this session. Tech has driven gains in the u. S. Since the coronavirus selloff in march. But our valuations starting to look seriously stretched . We will hear from our interview next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are 10 minutes into the Training Session this morning, and we are looking at 1. 5 gains across the continent right now. Lets get the Bloomberg Business flash. These are todays top corporate stories from the bloomberg terminal. Goldman sachs expects almost a quarter of temporary layoffs in the u. S. To become permanent. The bank says some 2 Million People could remain unemployed well into 2021 while the transition right from temporary to permanent layoffs remains historically low. The figure nearly doubled from june shoul two july. These are u. S. Figures. Saudi aramco has reshuffled it senior management. It is putting a Top Executive in charge of portfolio optimization. That as the Worlds Biggest Oil producer adjusts to lower crude prices. Aramco says the new department will assess existing assets and boost access to growth markets. Tiktok plans to file a lawsuit against the Trump Administration, as to challenge its executive order banning transactions with the video app in the u. S. The firm says it strongly disagrees with the concerns raised by the president. Donald trump has given owner bytedance an ultimatum. Either leave the u. S. Or sell its operations in the country. That is your Bloomberg Business flash. The recordbreaking rally in u. S. Stocks has been largely driven by tech, with the sector making up more than a quarter of the s p 500. Even more outlandish is the lack of breath in the rally. Says thef cal stressed current market is not sustainable and encourages diversification. The stocks, those are all doing well because of covid19. Solve this we will Health Crisis, then the question is what happens on the other side. The u. S. And the whole world, technology is at the 99th percentile. At some point, you will have a huge reversion to the mean. It could stay for a while, but at some point when the Health Crisis is solved, we will go back and shop at other places besides amazon. We are continuing to use microsoft as we always did, but you will have a reversal of the mean, and that will always be painful. Lets go back to ghadir cooper. We were hearing there would be a swing back to life before covid once we get a handle on the virus. To backthe risk that we away from the working at home phenomenon, away from the on nine retail from the Online Retail phenomena . It is actually easy to imagine that you would go back to a world that is completely different from the one we have gone through. We have seen the evidence of that post covid in the fact that for example even when they were open, a lot of sales were still online. You will have that change that we were talking about a minute ago. Change frome some the physical economy. We have seen company after company talking about working from home. The new normal will not be the same as precovid. Seen fromhat we have those highly valued companies have been delivered, i. E. What we are seeing is an acceleration in the trends we have in before covid in the change to online away from high street, in the change to Digital Payment away outsourcingwa digital centers. Those trends precovid will continue. The question is different. I am just wondering, is almost 10l years ago now, i read a book called rage against the machine by a couple professors at the sloan school at m. I. T. They said with increased automation and increasingly digital societies, there are going to be a lot more people without jobs. We just did the Goldman Sachs story. They think to million of the temporary job losses in the u. S. Will become permanent. Is the new normal one in which society has to figure out a way [indiscernible] guest we are looking for a society that trains people for new jobs. Moving to digital does not necessarily mean you are going to end up not being able to find a job. It will just be in the new economy. For example, if you are doing a sale online, you will be purchasing something that will for thebe delivered last mile. You will need engineers, developers, all of those to be your backups. Us isportant thing for the ability to move that, to move to the new Digital Economy in a way that allows enough people able to do that. That doesnt mean ghadir, do you see the rally we have seen in stocks, do you see that as out of step with the underlying economy . Or is it just our assessment that the underlying economy doesnt reflect the new reality we are in . Guest i actually think you have always been in another reality. We look at fiveyear earnings. A lot of those companies have priced in quite a lot of that own them now dont despite the fact that we are absolute believers in ocular stories. What matters is bottom up, finding the Companies Going you are able to deliver in terms of your clients by owning those companies, because i think that is the important thing. Aboutwer your question why we think there might be some vulnerability there, it is because what happened at the start of this pandemic, investors were worrying about cash flows and earnings delivery. We believe Going Forward that delivery will come from broader of economies opened post covid, and opportunities are attractively priced in other parts of the economy, not just that very narrow way of looking at the world. And youn i just ask, are not a macro economist, you are a bottom up Equity Investor, although you do hold a phd in theoretical physics, which i think is fascinating. What is your view on inflation . Areas with smaller priced goods like foodstuffs where clearly prices are rising, and some commodities as well. On the other hand, we are in a situation where carmakers or appliance manufacturers have very little Pricing Power. It is obviously a question that the market is really concerned with. What do you expect in terms of inflation . Guest the inflation monster, we call it. Actually, it is very easy to see why the market is not pricing it in, in the way you would originally have done that with yields. We did have the Federal Reserve chairman talk about made up inflation. We have had unprecedented money being put into economies to help with the covid slowdown, actually stoppage. And yet, we are not seeing inflation in the way that you would have thought about inflation coming back. That is really a reflection on the fact that quite a lot of that money ended up in savings, as opposed to being spent. Of the changese in manufacturing, in all of those things the last few years, and also because Interest Rates are very low. That has allowed a lot of companies to carry on working. There was a lot of capacity to produce those goods you were talking about. Thinkr Going Forward, i that is dislocation because of covid and that is transient. Matt ghadir, thank you for your time today. Ghadir cooper is the global head of equities at barings. We appreciate you joining us. Coming up, tens of thousands of protesters have gathered in dense in in minsk in belarus to protest the debated elections there. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. 23 minutes into the session, we are looking at 1. 5 gains across the continent to kick off this week. Massive protests flood the streets of belarus once again. Tens of thousands of protesters have gathered in minsk to protest against the disputed president ial elections and possibly the president himself. Alexander lukashenko denies calls to resign. He has been seen arriving at his residence carrying an automatic rifle. With us to discuss more is bloombergs russia economy and government editor greg white. Thanks so much for your time. Is president lukashenko showing any signs at all of backing down . Really a hard question to pose when looking at these images. Reporter so far, the tv pictures you mentioned are pretty compelling. Demonstrators with riot police and barbed wire around his residence, and he flew in on a helicopter carrying an automatic rifle with his 15yearold son, who also had an automatic rifle. Lukashenko went out and greeted the police guarding the residence and thanking them for their support. He is trying to show a tough line publicly, and he has threatened to take more measures to crack down on the protests starting this week by closing factories where workers have gone on strike and going after protest organizers. It is unclear whether he could marshal the kind of crackdown it would take to suppress such an enormous movement. The protests yesterday were more than 100,000 people at least in the capital, and tens of thousands in other studies as well. Certainly the biggest totals seen there since the collapse of the soviet union. Anna just briefly, i heard the foreign minister of russia calling for dialogue over the weekend. Russia thinks at the moment about all this . Reporter russia is trying to play a balancing game. They have supported lukashenko, criticized the opposition, but they would like to see some sort of dialogue. There are signs they are worried that political damage he sustained in this crisis will make it hard for him to continue to rule, as he had for the last 26 years. They would not be allergic to some sort of compromise, as long as belarus stayed firmly in russias orbit. Matt greg, thanks very much for joining us. Gregory white is russias economy and government editor, talking to us about president lukashenko. Those images we saw were very interesting. Coming up, we will talk about britain going back to school. Boris johnson says the risk to Childrens Health is small. This is bloomberg. Welcome back to the European Market open. 30 minutes into mondays trading session, and it looks fairly positive at this stage, up by 1. 3 on european stocks broadly. U. S. Futures up by 0. 6 so so stress coming some stress coming through there. All sectors apart from one in positive territory. There that in mind. Travel and leisure is the only sector in the red. Looking at some of these movers, we have bt on alert for takeovers. There are talks in the media here in the u. K. About whether there could be a takeover. Bank of america saying beattys pension could bts pension could pose a problem. Prosus also in focus. This is a read across from what we are seeing in the Asian Session with the tencent listing rallying in hong kong, and that feeds through on prosus. Lets take a look at astrazeneca. Trump may sanction a vaccine before the election, and the share price is on the rise by 2. 3 this morning. Matt lets get the bloomberg first word news. Todays top stories from the terminal. One of president trumps longestserving aides is leaving the white house at the end of the month. Kellyanne conway, the first woman to manage a winning president ial campaign, says she is quitting to focus on family. Her husband is also leaving a camping group committed to defeating president trump. Mayay says the two disagree, but they are united on what matters most, and that is their kids. On capitol hill, the house has passed a bill to Roll Back Service cuts at the u. S. Postal service. That is after concerns that changes could hit mailin voting. Lawmakers allocated an additional 25 billion to the usps, but the post office is concerned by some of the requirements and says it can strain its ability to improve efficiency and reduce costs. Is makingtorm laura its way across the caribbean. It has hit haiti and is heading closer to cuba. It will then make its way to the u. S. Gulf coast, which faces a double whammy from tropical storms. Toricane marco is rushing make landfall in louisiana today. In preparation, over half of all outputs in the gulf of mexico has been shut down. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Anna . Talk about the latest on the virus. The british Prime Minister has made a direct plea to parents, asking them to send their children back to their schools when they reopened next week. That as some teachers and Union Officials voice growing concerns that it is not safe to do so, or at least asking for more guidance on what to do. [no audio] he released a statement saying it is far more damaging for a childs development in their health and wellbeing to be away from school any longer. We are joined by our guest. Professor, very good to speak to you. As we brace for the Northern Hemisphere winter, how concerned should we be in western countries . You can talk about europe as a whole or the u. K. Specifically, whatever you feel is more appropriate. How big an outbreak should we brace for compared to what we have already seen from this virus . Guest good question, and i think it is hard to be certain about the way this is going to go. Theink it depends partly on measures that we put in place to try to stop this and how well the general population actually abides by those rules. I would go along with what chris whitty and Prime MinisterBoris Johnson are saying about it is important to get children back to school. I think this really is important. That forpretty clear Primary School children, at least, the risks of them getting the virus or passing it on to others is very low indeed. Where the worries are, i would say, are the adults associated with schools. Whether that is the teachers or the administrative staff or indeed parents coming. There is a congregation of people there from different household. It poses a risk to the adults. We do need to have very Good Measures in place, social distancing, cough etiquette, and so on to make sure adults associated with schools do not get infected. Matt professor, the risks are clear. I dont think a lot of people are worried about the Health Effects on five to 14yearolds. Grandma and grandpa, that is a big problem. I know you specialize in Infectious Diseases and epidemiology, but what are the Public Health and Mental Health effects of longterm lockdown . Dont kids need to be in school and socialize with people their own age . And dont parents need them out . Guest you would think so, wouldnt you . That seems the logical thing. But there is a study that has just come out from the university of bristol which suggests that anxiety levels have been lower in children during lockdown than they were before. I have not studied this paper in great detail, but if this is true, this says something about the stresses of going to school. Maybe it is not as obvious as it might seem. [no audio] Contract Tracing is needing to be part of the mix. How does that relate to standard Contact Tracing, and what is being done to get us ready for the winter . Guest when we talk about backward Contact Tracing, what that means is that people who we we arey as being cases, then looking backwards to see how they might have become infected themselves. For example, if they had been to a pub a few days previously, that might mean that you want to investigate other people from that pub to see if that was a source of where infection may have come from, and then to notify other people who had been to that pub as well. So it is looking backwards as well as looking forwards at the cases that might have contributed. Anna clearly i am no expert in epidemiology, but that sounds like Contact Tracing. Isnt that what Contact Tracing should be doing . If it is not doing that, it is not tracing potential contacts. Guest it is what you should do if youve got the resources and you actually apply them and identify the people who are in the pubs and so on. For example, having systems where pubs, restaurants do take , you simplyy steps would not know who the people were who had been at that pub. Sometimes, it is just impossible to do that backward Contact Tracing because all you could say is i was at this event, but i dont know any of the other will who were there. People whohe other were there. Matt it seems to be a pretty easy thing for the government to do. The interesting thing is the privacy concerns. I guess it has to be done by big brother because people dont want some people dont want other people to know they had the coronavirus. I dont know personally why there is that issue since it is kind of like having any other virus that isnt embarrassing or anything to contract. But it does not really work, especially here in germany. People are very concerned about privacy. I know in the u. K. Also, companies that find out an employee had it will not tell other employees. Issue does not allow it to happen well. Guest no. I think it is surprising. Where if you are contacted and you then give the names and addresses of people you have been in contact with, when those contacts are traced, they are not told who gave any information. That seems to me there is a sort of etiquette involved in this, that if you were naming contacts then it might be good manners to actually tell those people that you had named them, rather than them finding out that some mystery person did this. It seems to me that would be good manners. Anna professor whitworth, thank you very much. Professor wet with, apollo professor whitworth, apologies for the delay. Questions continue over on oil spill off of mauritius. An investigation looks at how and why the vessel that hit the reef was in the. Area at all we get further details. This is bloomberg. Back to thee European Market open. European equity markets making gains. U. S. Futures point to the upside as well. Lets get a Bloomberg Business flash, some of the top stories we are covering. Goldman sachs expects almost a quarter of temporary layoffs in the u. S. To become permanent. It says some 2 million could remain unemployed well into 2021. While the transition right from temporary to permanent layoffs remains historically low, the figure nearly doubled from june to july. Saudi aramco has reshuffled its senior management. It is putting a Top Executive in charge of portfolio optimization as the Worlds Biggest Oil producer adjusts to lower crude prices. Aramco says the new department will boost guest guest access to growth markets. Regulator is reiterating its commitment to opening up the chinese financial sector. The comments come during a deepening standoff with the United States, forcing global banks to walk a tight rope between the two world powers and competing rules. That is your Bloomberg Business flash. An investigation into the Devastating Oil spill in mauritius is still trying to establish why the vessel was there in the first place. The ship was 11 days into a monthlong voyage to brazil when it hit a reef and leaked at least 100 tons of black sludge into the clear turquoise waters off the islands southeastern coast. Is our guest, former president of mauritius, and a scientist. Thank you so much for joining us. Really an honor to speak with you. I think a lot of people were outraged when reading about this and following this over the past weeks, ms. President. Why are these kinds of industrial ships, very large ships, driving over one of the most important coral reefs in the oceans . Fromouldnt they be banned these important areas . Guest thank you very much for having me. In fact, tomorrow marks one month since we experienced the crash on our reef. You have raised a very important question. I think we are also grappling with getting some answers, because the ship was found for designedt it was not to be anywhere near mauritius. This ship is among the 1 biggest ship that has been built. As anthe same size aircraft carrier, to give you an idea of the size. As we speak, we still do not know the exact amount of fuel that has been leaked into our waters. The one thing we know is our beaches are now very badly impacted. Month, we have seen a deafening silence from the shipping industry. There have not been major communiques from them. We are waiting to hear from the regulators because of increasingly being made aware that the fuel which the ship was carrying was not crude oil, but low fuel grade oil that was being carried on a vessel which l. A single hul not even a double hull. Why is such fuel coming to our waters and we have no idea but we are the victim of this incident . President . About what case for compensation russias has. Do you think the owner of the ship could pay damages, but it might be difficult to get from the Insurance Company . Do you think the owner of the ship has a liability here . Pres. Guribfakim there are so many issues linked to the compensation issue. It depends also on how many conventions they have signed. The other thing we have seen, the japanese owner of the ship made the appropriate noises. Is the insurance compensating for the damage done. But beyond the compensation, because there is one more thing we need to add before looking at the compensation issue. This ship was not an oil tanker. We know the compensation for an oil tanker, the compensation level is different. But beyond the compensation, we are looking at the damage which has been done to our wildlife, being done to the livelihood of so many people, and now the information coming out is showing this fuel is very new fuel and the work had not been done in the tropical environment where this fuel had been leaked. This fuel, when leaked into the there waters, we can see were hydrocarbons leaked into the ocean. This is dangerous for wildlife. We know also even if you clean up the ocean, it is never 100 . This will linger on for so many years. This has happened near a whale sanctuary. You have so many whale passages. God knows what will happen to the livelihoods of these animals, beyond those of the fishermen and all the industries and has impacted for us. Tourism brings about 25 of our gdp. Matt you know more than most people what kind of damage this could do. You have a phd in organic chemistry, and of course you were the president of a country that relies on this kind of marine life for its livelihood. Diving in indonesia called misle. They have a 300,000 acre no kill zone. No fishing is allowed there. None of these tankersized ships are allowed to drive through there. Why not make a huge no kill zone around someplace like mauritius . Wouldnt it be better for the ocean, for the earth, and even more profitable for the people who live on that island . Pres. Guribfakim definitely, because we have a huge exclusionary zone. 2. 2. 2 square million square kilometers. Beyond this, this ship hit the reef very close to our marine park. It is one of the most bio diverse regions in the world, and also next to and islet. Unfortunately, mauritius is well known for the extinct home of the dodo. Which is nowslet, surrounded by an oil slick, is precisely that islet where 20 plus years of conservation may be reversed. How can we make an assessment of this in monetary terms alone . These are questions that begged answers, and we are waiting to hear from them. Anna thank you so much. Former president ameenah gu ribfakim. Thank you for joining us to talk about these events off the coast of mauritius. Up next, we get back to the markets. What would no deal brexit mean for assets . We put that question to our markets team leader. This is bloomberg. Matt welcome back to the european open. We are 54 minutes into the session right now. Looking at strong gains on this monday morning for European Equity indexes, as well as the ftse 100 in london, gaining almost 100 points to 6099. The dac is up 222 points, and the cac adding 90. To talk about what is behind these gains is the leader of our mliv team in europe. I think it is interesting, a lot of people are talking about optimism that the u. S. China relationship maybe has not degraded as much as we thought because of reports from unidentified sources in the Trump Administration that some Tech Companies will still be allowed to work with the wechat app. App so important it could drive the u. S. Economy and stock market to gains . Reporter i think that is the nature of this rally right now, where every little bit that markets can get as a reason for optimism, they are going to take it. Story inly is the these markets that we have seen throughout the year. Every time we get a little bit of nuggets to stay optimistic, investors are very willing to take it. Perhaps that is a reflection of the broader environment, which is still very much mired in the coronavirus crisis, in looking to the longerterm Economic Impact of that, which is not expected to be good. But in the meantime, investors are happy to take any bit of good news they can get. The question is how long this is going to last, and at what point will they say, actually, we are going to need more in the form of more fiscal stimulus from governments around the world or more monetary stimulus from Central Banks . Kristine, thanks very much. That will be a feature of the conversation later this week. We are going to turn our attention to jackson hole. The interview is not happening in person. We will hear from jay powell, so a lot of focus on monetary policy, or maybe even the school, if maybe even fiscal. Matt that is it for the european open. Stay with Bloomberg Television because up next, you will see surveillance. Although, you may want to switch over to Bloomberg Radio if you are in the london area. Tune into d. A. B. This is bloomberg. Yousef global stocks push higher on fresh hopes of the coronavirus front. President trump says the coronavirus treatment will expand. Markets turn attention to jacks now. And then youve got defense fighting measures, as well. The Republican NationalConvention Begins in North Carolina today, as the president ial rival joe budden says he would be open to a second term joe biden says he