Installed within a whisker of februarys alltime high. The cash trade is less than one hour away. Your are your headlines. Germany extends its Job Support Team until the end of next year, spains or rules out another National Lockdown as cases rise. Britains vaccine bet, the u. K. Backs a plan for a dnabased maxine. We look at a 50 million rates for a solution. And caveat emptor, u. S. Consumer confidence drops to the lowest level in six years. We will get the latest french figures out this hour. Just under one hour away from the start of cash equity trading in europe. Lets look at how futures are trading. Right now across europe, we are seeing slight green arrows. And i mean slight. You can call dax futures and euro stoxx 50 futures unchanged. In the u. S. , we see most futures contracts falling this morning, although also very slight drops. S p futures are unchanged after another record high yesterday. Nasdaq futures gained about 1 10 of 1 . Anna, what do you see on the gmm . Anna feels like we are taking a pause for breath. The gmm emphasizes the downside in the asian session. The Msci Asia Pacific is almost entirely flat compared with the previous close. The chinese and singapore market are all showing up in negative territory. In terms of where we are heading , or things guiding us around, still virus concerns, of course. The focus of the concerns seems to be drifting slightly from the u. S. Into europe, not in terms of the size of the caseload, but maybe the trajectory of those infections, usually something we are very mindful of here in europe. The focus is on fiscal stimulus. We will see whether that manages to turn things around. Big news out of germany on that front. We will keep an i on that. And on oil prices as well. We see a mixed picture for oil, brent at 45. 49 as we watch a hurricane laura. The second night of the Republican National convention was capped by speeches from secretary of and first lady melania trump. Pompeo sparked controversy for record his speech during a trip jerusalem. The state department prohibits political activity while on official travel. Third night of unrest in wisconsin, after businesses were vandalized and dozens of buildings were set on fire. It was sparked by the Police Shooting of a black man, jacob lake. His familys lawyer says it will be a medic miracle if he ever ws again. Children over the edge of 11 will have to wear face mask use their school is in a high risk area and that includes oil moving around the building and in communal areas. They will not be required in classrooms. In less risky areas, it will be up to the school to decide if masks are necessary. A weeklongicked off tour. Yesterday a minister was in rome meeting with his counterpart, luigi demaio. This comes on the heels of u. S. Victoria state mike pompeos visit in which he once china er threat than russia. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt matt thanks very much. Stalls in global stocks within a hair of februarys alltime high as investors mull the pace of recent gains. And expectations loom over Monetary Policy. Benchmark ande the tech heavy nasdaq climbed backedesh records by gains in facebook shares. Our bloomberg mliv microstrategy is is here. Laura, it has been so long now that we have been hearing evaluations are skyhigh but the outlook for gains is too strong to resist. What is the reason now for these new highs in the second wave of coronavirus . Laura ultimately what markets are telling us is the this bullish optimism prevails. A slew ofriced in for good news, whether that is the slowing u. S. Case count, whether outlook,upgrade in the whether that is there is no alternative in terms of finding returns, ultimately what we are seeing is cash being deployed into the equity market. I think Going Forward, it will be a case of markets being vulnerable to negative news flow. It will be all about jackson hole this week, what comes out of powells speech tomorrow and low for longer narrative in terms of Monetary Policy will continue to bolster the optimism we are seeing in stocks. Anna with that in mind, on the markets live team, i know you have been asking this question, what the bond traders fear at jackson hole . Running up to this event, there is a lot of talk about inflation, average inflation targeting. What are they fearful of . Are expecting a shift in terms of the inflation mandate, they expect powell to confirm this low for longer narrative. Bond yields are breaking away in terms we are seeing of the inflation extradition outlook, so that confirms what they are expecting from policymakers. What bond markets potentially fear, we can look to the post someminutes left week for guidepost, because that is where we didnt see any signs of imminent change in the inflation mandate. We saw bonds come under pressure and yields rise sharply. That frontintment on in terms of a Material Change ahead in terms of their actual mandate for framework, that could suddenly send a jolt through markets tomorrow. Matt speaking of ageold, how concerned should we be about hurricane laura . Pricese are seeing oil at these fivemonth highs, and ultimately, yes, it is constraining supply, we are seeing u. S. Inventory being wound down because of it. But i think the impact will be relatively shortlived. I dont think we are going to punch through and sustain levels above the 4550 dollar a barrel mark because at the end of the day, we still have the downside, that remains under pressure. Notably if we start to see these rising case counts, and consumers not having the capacity to sustain demand on the income side, ultimately, oile will be what pins prices at current rangebound levels. Anna i am not sure we have ever had a hurricane, anna. I keep waiting. Let me ask you about the fiscal stimulus in germany, there is a lot of talk about where in europe we will the fiscal support. We have seen it overnight in germany in substantial to a substantial extent. Does it add to the appetite for risk assets, do you think . Lara absolutely. Extension is crucial to economic recovery, because we are already seeing activity beginning to stall below the pandemic levels in germany where it has been really strong relative to its peers. Thatis evident in the fact the ecb actually sees that unemployment in europe would be closer to the 11 range relative with thelow 8 now absence of these games, so getting this income to the consumer side will help support those recoveries. We are seeing that play out in terms of european futures slightly outpacing u. S. Peers today. That is likely feeding into some Risk Appetite this morning. Matt laura, thanks very much for joining us. Laura cooper, bloomberg mliv strategist. You can check out her work and the work of her colleagues on the mliv blog, just type mliv < go on your terminal. Germany late last night reached the agreement, the coalition did, to extend this Job Support Program until the end of 2021. What does this mean for stabilizing europes largest economy . Was it too soon . We discussed the details next. This is bloomberg. This is bloomberg. Welcome back to the European Market open. Still a few minutes away from the start of cash equity trading. Futures suggest there will be little change. Kicking off the alltime highs seen in the s p and nasdaq overnight. Lets look at the corporate stories we are coming for you here. Palantir plans to list on the new york stock exchange. A proceeds rate is and does not have any traditional underwriters. Palantir has never been profitable. This Pharmaceutical Company has been charged with conspiring to raise prices for generic drugs, one of the significant things to come out of the years long investigation into pricefixing. It is the Worlds Largest generic drug maker and says it is disappointed by the move, Andrew Jackson allegations. Mcdonalds is investigative allegations. He mcdonalds is investigating the ceo who was fired in november over a relationship with an employee. It is alleged he had multiple affairs with workers. The company concluded he lied and concealed evidence in the initial investigation. Easterbrook has denied the claims. That is the latest on a Bloomberg Business flash, matt. Matt alright, we are looking at the extension in germany of the until thet program end of next year. Let as the government seeks to stabilize europes largest economy. The subsidies, originally intended to last 12 months pay the bulk of paychecks and allow companies to hold on to workers through the financial turmoil. Treon,joined by anneka managing director of equities at camkempen. I guess it is not a huge surprise. Is it positive news for investors . Positiveabsolutely news because it is yet another signal and another indicator that governments are willing to do whatever it takes to prop up the economy. Anna that is what makes it positive. Is it invest about, something that will drive further flows in terms of investor allocation from other parts of the world into europe, that seems to be things of that many investors are talking to us about already. Absolutely. Europe in particular has been the last child for a long time. If you look at other geographies particularly the u. S. We saw very offputting statements by other Asset Managers for example, lack rock in its media update, where they addressed the point that europe looks to cheap and too laggard. With a fiscal union which appears to emerge catching up to a longstanding monetary union, we look to redress. And recovery is certainly paramount to that. If you look at europe for the firstince indications of the recovery europeoming together, has had a nonquarter high there , which is remarkable. Statements such as the announcement from germany this morning is simply supportive of that. Governments are willing to do whatever it takes on a national level. From the European Union level, they are willing to coordinate. Matt you know what, we see that investors appreciate that in terms of german stocks. The dax is almost unchanged here closer to theng gains we seeing on the s p 500. But elsewhere in europe, the ftse is down 20 year to date, far underperforming u. S. And german stocks. Actually, most continental indexes outside of germany are down double digits year to date. Is this just because of the lack of tech stocks in all of these oldschool benchmarks . Anneka you have hit the nail on the head. Europe suffers from an old economy problem. The stoxx 600, 10 of the weighting is represented by tech. The s p, 25 is made up a loan six just ask tech stocks tech stocks. There is an enormous derth of tech investment in europe. It is a major problem and no wonder that the Recovery Fund has put such an emphasis on digital transitions, green transitions. It begs the question how quickly europe will be able to catchup in order to attract more Structural Capital and structural investments in the region. That is yet to the scene. But we have seen that a lot of the money which has now entered feel likene, it does the first leg of attraction is almost a cheap option on a potential cyclical recovery. The less fleeting leg of investments will need to be supported by a pickup and a catchup in growth and innovation and in technology. Anna we have seen a strong rally in the euro on the back of agreements in the eurozone recovery. Has that stalled . Thing ishe interesting i think it is important to think and thinket dynamics about Asset Allocation and its entirety. The big shift we have seen that period where0 year europe was left off, you start seeing participation again in the eurozone. What we need to look at further, why are stock markets doing what they are doing particularly in the u. S. , while the Economic Situation seems to be telling a different story . Where is the disconnect coming from . Of course it is the lack of alternatives, say you buy equities in a yieldhungry environment. Perhaps even more importantly than that are the technical factors involved. Passivehink about this retail mania in the markets, which are arguably be magnified forces ofquant things cometh these factors have been enormous drivers in the returns thus far, particularly in the u. S. Forces,un through the the scary thing is it does feel like a of reference. Years ago, we saw a red flags being raised about dangerous developments in market architecture. Years ago, you had statements such as, 80 of the stock market is running on autopilot, and enormously powerful statement. What you have seen since covid, if you think about how in march 2020, the preferred group was. That is why etf inflows have already surpassed 2019 fullyear. The issue is that with great anticipation, it is quite simply compounding the overcrowding that we see in largegrowth companies. Thank you. We will return to those themes in a moment. On the subject of the euros, our colleagues are writing on the technicals. Amec i was just referencing have back to backming with very similar lows. We will be back shortly. Coming up, can anything derail the relentless u. S. Rally . We discuss that next. Hat next. Anna welcome back to the european open. European features such a little more direction, pretty mixed in terms of where we will head in 45 minutes time. U. S. Stocks reached alltime highs. Perhaps that is one of the reason we are pausing. A Third Straight day as the pandemic showed more signs of easing, amidst continuing expectations of Monetary Policy. The s p 500 and nasdaq notched fresh highs as facebook shares rallied. Anneka treon joins us. You talked a little bit about how the way this retail mania might be feeding off each other, snderscored by the role of quat in all of this. The role of quants how do you think they are driving us to higher highs . It is a fascinating topic that is not getting the level of attention given the significance. Answer your question, i want to zoom in on retail and the relationship between retail and quants which is such a permit point, retail participation since covid has enormous, 20 to 35 of contributions to date coming from retail, which a most doubled. It is therefore that robin hood, which has become synonymous for Retail Investing with its commissionfree proposition, a sevenyearold company, is now valued at 11 billion, a valuation up 50 year on year already. Quite remarkable. If you think about the role of ants and how it all intertwines, lets talk about tesla, which it could argue is the poster child of the retail mania today. Au cant help but draw parallel between the dotcom bubble in 1999 and what were seeing today. Stock is truly remarkable. Coincidence that tesla is one of the most actively traded stocks on robin hood. Quite interestingly, when robin hood earlier this month decided withdraw its data access to the street, esau comments and reactions from the Hedge Fund Community and also from the quant Fund Community highlighting this is a problem, because Retail Investing tends to have a momentum bias which works very well in quant models of trading. Anticipatingare where do we anticipate crowding in which sectors and which areas and they are positioning and feedingor that of data feeds from the Retail Investor community, particularly because volatility levels have normalized. That does allow the risk models on the quant side to put more leverage on. Matt fascinating stuff. Unfortunately, that is all we have time for. Hopefully we can get you back soon, anneka treon from kempen. The welcome back to european open. We are looking at a mixed onside not really much order of direction. Spain is emerging as the epicenter of europes run a virus outbreak. The Prime Minister, pedro sanchez, has rejected calls for another National Lockdown. In germany, meanwhile, chancellor merkel is extending the countrys john support program until the end of next year. So a couple of different stories on the continent. Joining us is arrieta dale maria tadeo. We will start with her home country of spain. There is no National Lockdown. Looks like the Prime Minister is pushing the responsibility onto the regions. How helpful is that in combating the virus . Maria it is not actually very helpful. The Central Government is saying that we dont predict anything that looks like the march situation where the whole home, ifad to stay anything, the regions are finding ourselves in a difficult position because cases have rocketed over the past two weeks. They should turn to the Central Government and ask for the state of emergency. The reasons are never going to do this. It is a most like conceding defeat. This is becoming a game between the Central Government and the regional administration, which is not making their response effective. The Prime Minister is taking a communityt from the because the country is not reacting quickly enough. Spain had a poor start to the year. Some are essentially did not happen, in the fall could see a big recession. So there are serious question doingabout what this is to the economy because the damage looks very big fall country like a spain. The concern here is that we head into a deep recession. Maria, instead of fighting the pandemic, germany is extending its relief package to workers overnight. What is the political dust does this signal theres this signal more stimulus coming from europe . Maria the government already said we will continue with this program and it will continue to pay for relief for workers if 2021. On get fired until but germany is a country that is rich, that has a surplus and money to spend. The rest of the European Countries like spain and italy will have to ask themselves the same question, do we still have to pay for this . Though we have the money to provide the same type of support . At this point we know that European Company european money will not come until 2021. They will have to tap into esm. That. May have themselves, how much money do we want to spend to revive the economy. How thell depend on virus goes and whether or not we get anything on a vaccine. But for a country like spain, this is a huge thing, do you protect workers for longer, and can you actually afford it . Given the with the virus is going, that is a pressure mark. Bn fornd shout out to any credible story on this. Saying, maybe this is too early and it could hamper the kind of retraining we need to see in the economy and support Zombie Companies in a way. Maria, thank you very much, maria tondela covering a number tadeo, covering a number of european issues for us. Anna coming up, we will be speaking to the Italian Health minister. Dont miss that exclusive interview today. Perhaps it will include as to whether there is more support coming into that particularly market as well. Lets get the first word news update for you some of top stories we are covering. New york and new jersey are suing President Trump and his postmaster general, over major changes to the postal service. The white feared that house is trying to undermine the usps. The president has frequently claimed without evidence of that mailin voting will lead to widespread voter fraud. The president of the Un Security Council rejected white house demands to restore sanctions on iran. The move was expected allies had a ready told, the u. S. It had no say on the matter as it pulled out on the nuclear deal with iran in 2018. But the u. S. Has it back with its ambassador to the you and accusing opponents of supporting. Errorists hurricane laura is poised to become a category 3 storm on wednesday or early thursday. There are alerts along the texaslouisiana coast as winds forecast to peek at 120 miles per hour. According to a disaster modeler, it could cause up to 18 billion of damage. It is the end of an era for barcelona. After dozens of titles, thousands of goals and countless records, star player the are no messy handed in a transfer request, having grown unhappy after a disappointing season compounded by a humiliating loss in the champions league. But barcelona says it will not ultimately grant his wishes. A legal battle could be coming. That is the latest soccer news for you. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt . Matt oil is a huge story right now, the commodity holding on to fivemonth highs as hurricane laura bears down on key refining facilities in the u. S. Gulf coast area. It is poised to become a category 3 storm when it comes ashore late tonight, threatening to inflict as much as 18 billion in damages and keep some of americas largest Oil Refineries shut for months. The u. S. Energy secretary says the industry is ready. We are very prepared for this hurricane, seemingly moving into this used on, southwest louisiana area. As you know, the houston channel port arthur, big refining facilities there. We have a Specialist Office here at the department of energy that assistantd by an secretary that is responsible for our response. Their teams already evaluating this. We are working closely with the industry and we fee the industry is prepared for the storm. In addition, the president has directed me to make available the Strategic Petroleum reserve this. Tuations like we are doing all he can to make sure we are capable of doing that immediately following the storm. We feel overall we are very prepared. We will have to just watch and wait and see where the storm ends up. Its move to california, where have been these brownouts because it is very hot. What is going on, is it of fundamental problem . Absolutely. California has a long history of Getting Energy policy wrong. You may recall the blackouts, the brownouts from 2001. There was a market issue back in that point in time where people were manipulative the market, but it was because of the wrong policies that california chose to intimate at that point in time. Today. Seeing that california has decided to move to a 100 Renewable Energy generation world. The challenge with that is that when the wind does not blow and the sun does not shine, yet people want electricity, it isnt there. So their overall strategy is to borrow or purchase electricity from neighboring states like arizona and nevada. The challenge with that strategy is that when it is hot in california, sometimes it is also nevada, theya and may choose to keep their power and their electricity because they would like their hospitals to run just fine, and airconditioning to work as well. So there is nothing to sell to california. That leaves california in the position of having to turn off the lights in certain parts of the state in order to meet their energy needs. That takes us to the road. Ental fork in the right now it is between democrats and republicans over renewables and avoiding emissions on the one hand, and relying upon fossil fuels for Energy Dependence. The same time, the pew center did is study in june that says 50 of americans really are concerned about Climate Change. Democrats and republicans see this very differently. Can we have a bipartisan Energy Policy in this country . Sure, you can. Natural gas is a very clean stores, and we are developing technologies here at the department of energy to make it even cleaner. Also the villages to make carbonintense fuels like coal even cleaner. We have had Nuclear Power for the last 70 years, which is entirely emissionsfree. You can do both, you can have a Renewable Generation base and an emissionsfree baseload generation. You just simply choose to do it. But is what the fundamental problem is in places like california, they focus too heavily on Renewable Power like wind and solar at the exclusion of some of this baseload power which you absolutely need in todays world to ensure that you have the energy you need when it. Need President Trumps administration has done a fair amount in trying to reinforce Energy Independence in the united states, relying in a significant part on fossil fuels. What is left to be done if he is elected for a second term . What is your agenda . We continue to build infrastructure. We have them a great job of increasing our production, making ourselves energy independent, relying on new World Technologies like horizontal drilling and fracking to allow us to increase production of these resources here in the united states. Our challenge today is getting the product to market. It is building out pipeline and structure to get it to the oceans and the coastlines, building export facilities so we can make this oil and gas available to the rest of the world, because they will continue to use these fuels for the foreseeable future, perhaps out. Ny as 4050 years anna that was the u. S. Energy secretary speaking to our colleague david westin overnight. In about one hour, we will be talking about the Seismic Shift taking place in the energy markets, with our sestamibi lyst at janus henderson, seery,us yeaama sustainability analyst at janus henderson. Donald will not rest until he has done all he can to take care f everyone impacted by this terrible pandemic. He has and at the end ridiculously unfair trade agreement with china. Home. Jobs are coming back right now our Economic Health is coming back with emergency spending and tax cuts. Americans are going back to work. Now looking ahead, more tax cuts and regulatory rollback will be in store. I dont want to use this precious time attacking the other side, because, as we saw last week, that kind of talk only serves to divide the country further. I believe we need my husbands leadership now more than ever in order to bring us back once again to the greatest economy and the strongest country ever known. Melania trump and some of the other highlights of the second day at the Republican National convention. Dont miss our coverage of the rnc. This evening is the turned off Vice President mike. We just got french Consumer Confidence numbers out. Even with the survey number of 94. 94 was the print and the prior number as well. As the news breaks, absolutely no change from french Consumer Confidence previously. U. S. L difference from the Consumer Confidence number that we got yesterday, it dropped in august to the lowest level since 2014. So Consumer Confidence in the u. S. Dropping to a sixyear low. You have to wonder also what these french numbers would look like if the survey was taken covid case the new numbers skyrocketed. Lets get more with Bloomberg Opinion columnist undrafted listed. Felsted. Andrea fells we have in the past few days seen an alarming pickup in new covid case numbers out of france and spain. Took to us about how this is affecting the Retail Sector. It is affecting the Retail Sector but also general Consumer Confidence about shopping, going out, traveling. This time of year is a huge time for tourism which has been badly affected. So this really affects Consumer Confidence, not just retail. Anna andrea, good morning. What are the challenges retail faces for the rest of the year . Are we expecting any return to normality for a sector that has been so badly affected . Maria i think we have these huge challenges you just highlighted. Are we going to see second waves requiring more lockdowns, and you have the other thing that is happening as highlighted by the u. S. Consumer confidence, it is really also about the extent of job losses and unemployment, because consumers make the biggest changes to their spending when they lose their jobs or when they see friends and family becoming redundant. We have seen this happening at what we are approaching, the biggest time of year for retail called the golden quarter. It will be a very challenging picture Going Forward. Matt i get the feeling no one is more consumer than americans. I sure that is just a western issue. In the east, we have clearly seen huge signs of consumerism growing. How does this situation compare between the u. S. And europe . Maria i think they are actually very similar. I think it is all going to depend on the virus. But also just the extent of job. Osses on both sides we have the debate about stimulus in the u. S. , we also have the uks furlough until october. Coming right ahead of christmas, the busiest time. Those two factors are the same for both eyes of the atlantic. Anna thank you very much for joining us, Bloomberg Opinion felsted on thea travails of retail. Futurespean equity picture has looked fairly flat through much of the overnight session. The asian equity markets have been fairly flat through the session. Interesting to see where we head. In terms of stocks, we will get you stocks to watch, after u. S. Company salesforce blue estimates. And we will get a read across into europe. Matt welcome back to bloomberg markets. This is the european open. We are a few minutes away from the cash equity trading. Does it look like it will be a dramatic open. Ftse futures are up slightly. Futures, little change. Joining us now is annmarie hordern. This is not a lot of drama in terms of the indexes, that we could see a lot of movement in terms of industries and individual stocks, right . Annmarie yes, that is right. First is Software Stocks taking the spotlight, this coming after this company beat profit. We saw a surge in after hours trading. It has been a week for salesforce, because yesterday they joined the dow. An analyst called them monster numbers. Sap will be the clearest year in europe. We can also see names like micro focus as well. Anna interesting to see how far that goes. Companies . Energy we are watching the progress of hurricane laura. Rest and foremost, the residents on the gulf coast, we wish them luck and safety as the storm is poised to become a hurricane. Really, Energy Companies are the ones to watch. Already we have Seen Movement in the price of brent, hovering around 46 a barrel. It is rangebound. The capacity of the refining on the u. S. Gulf coast, which is really key to a u. S. Energy that could be hit. We should also mention this morning that barclays had 70 readings on best had some new readings on european oil companies. Ll was cut to bash shell cut to underway. I would say the whole sector is morning. Tch this matt annmarie hordern, thank you, walking us through some of the Sector Movement we will see today. We dont see a lot of equity Index Futures movement, but we could see a lot of individual Company Movement today, so keep your i for example on telecom want tothat is one we watch today as well as we watch Energy Companies and software na. Cks, an anna absolutely. We are keeping an eye on those. Anna businesses to see if there is a read across from that salesforce numbers. You uptodate on some of the corporate stories we are covering. Have covered stocks, lets get to the business flash. Palantir has vowed to go public via indirect listing. The Company Plans to list on the new york stock exchange. It will not make any proceeds and does not have any traditional underwriters. Volunteer has never been profitable. Company isceutical in is significant case to come out of a years long investigation into pricefixing. Teva, the Worlds Largest generic drug maker says it rejects allegations. More details are emerging around mistakenly sending and hundred Million Dollars to hedge funds. An obscureis down to piece of software the bank is trying to phase out. Colleagues who were supposed to catch the error did not. Businessour bloomberg flash. As we head to where the market open, futures are pretty flat. Matt futures are pretty flat. As we said, we could see some movement in individual stocks. Itallia for example. Watch out for 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 a minute to go until the start of cash equity trading. Wednesday morning ppping germany exsends the its job sport scheme until the end of next years they try to recover from the Coronavirus Crisis. Spains Prime Minister rules out another National Lockdown as the country reemerges at the epicenter of the pandemic in europe. Well look at the multibillion dollar race for a vaccine. Matt very interesting stuff today. Lets take a look at european futures. They are not very interesting. Not a lot of movement. Were getting some sense of moved n as dak futures own to 1 . A Cross Section of risk assets in the far left hand column equity indexes, they pop in there and populate the screen as markets open up. The ftse is slowly sliding lower. Thats the sense you get when you look at the European EquityIndex Futures as well. Possibly moves to the downside. Not huge ones. You can see the cac open down 1 3 of 1 . One quarter d down of 1 . Markets are moving lower this morning but they have been looking pretty darn good leatly, especially on the other side of the pond. The s p 500 closed at a record high a day ago. In europe, germany is the closest we have got to an equity index that is unchanged year to date. 75 . Down now about 1 Everything Else is dropping by double digits. Why isnt europe keeping up with the gains we see in the u. S. . John rowejoins us. Lets start with what is going on in the u. S. Continued gains there even though companies, consumers and countries are loading up with debt after a period of no income. Massive eye watering amounts of debt after making no money for months. Why do markets continue to hit ew record highs in the u. S. . Very high technology. Utilities down year to date. It is the very hightech that we just dont have in europe that is the biggest dwirk factor. Distinguishing factor. Anna good morning to you. Proving the extension of the scheme. Is that an investable thing for you . Something that will make the difference to some of the stocks youre exposed to . Yes, i think so. One of the most predictable features of europe, some of the left wing government also necessarily por their people and youll see longterm packages, generous packages, part of social contract between the people and the government itself. I think in europe then the theme is more around who are the main beneficiaries . For example, in the bonds space, croatian bonds, 15 of g. D. P. , european Recovery Funds. In america, there is a real risk as to whether or not a package is put in place before the election. You saw Consumer Confidence yesterday. The risks around that have not gone away. The u. S. Is a lot less committed in longterm support. In europe, it is more around who are the known winners. In america, it is more of a risk on, risk off. This is a real risk event as to who were the Consumer Confidence matt im curious as to why germany is outperforming the rest of europe. In terms of benchmark indexes, on one hand, john, we can see delivery hero and some of the other Tech Companies feature prominently on the dax whereas oil and Gas Companies and banks have been hit hard. On the other hand it looks like germany has handled the Coronavirus Crisis better than say spain and the u. K. Which is it . I think it is partly the ector decomposition. It is particularly looking to the east is in some way supported. Secondly, dynamics in germany. It has been increasing its debt to g. D. P. 3 year to year in the last five or six years. Huge amounts of firepower there in germany if it is needed where obviously in the peripheral countries in europe, in the u. K. , they have got the uncertainty of brexit to deal with and that is a different dynamic. Germany has vast amounts of money to throw at specific problems if it needs to. Anna this might throw off opportunities for you. We look for you to bring us positions. What do you see in europe that is unloved and left behind apart from entire indices as we just discussed . Apart from entire indices, telecoms actually. You mentioned it a few minutes ago. The telecom is an unloved industry. Poor earnings. We feel there are catalysts for the upside here. It indirect and could give them a little bit of Pricing Power they have not had in recent times. Maybe it will be a little less constraining. Telecoms is an area that we feel is unloved. There are some catalysts out coronavirusd to the and thats why we had it in the last month. Matt youre going to stick with us. Were going to get more from you. Give us more e to insight. As an editorial aside, you were right the first time. Indexs is bloomberg style. Go with it. We beat our path forward in global journalism. Our own path. Anna sometimes i fight against my own cultural background. Matt you have a very cultureded background as a british subject of the queen. We appreciate that as well. We go with indexes. Coming up, Inflation Fears infiltrate the bond markets ahead of j. Powells address at jackson hole tomorrow. Well discuss all you need to know about the feds meeting in the mountains. This is bloomberg. Matt welcome back bloomberg markets. This is the european open. 10 minutes into the trading day now. Were looking at a mixed picture. The dax bouncing a little bit higher. The ftse down 1 3 of 1 . Struggling markets are struggling to find direction. It is very early after weeks of gains. Lets get to the Bloomberg Business flash. The top corporate stories from the bloomberg terminal starting with mcdonalds is investigating if its former chief executive covered up impro tryities for others. For a d in relationship with an employee. They have found he had multiple affairs with workers. Mcdonalds learned he concealed additional information. He denied the claim and said the company knew all about it when they made up his severance agreement. Paving the way for final approval in court next week. Denied aid es was from a bailout fund. Theman satches sachs was debt issue. Or about 130 million was available. One said it didnt offer enough yield for the risk. That is your business flash. Anna . Infiltrating the bond market. Lay melee the ground may the ground work. Between you and me, one of the great reasons to tune into coverage of jackson hole is the incredible views. I know youre focused on the content. What do you expect to hear from jackson hole in terms of the average inflation targeting which seems on the a preoccupation for market house in. The policy review bailout, crucially that in and of itself was announced early in the year. Very little immediate market impact. People didnt really believe it was making a change. It would be a surprise event that would worry markets more. We had several years where we missed on on it. On the average inflation side of things, you talk about the backdrop of where the fed has failed to achieve the target, the mandate over the last five years. Despite unemployment down 3. 5 the lowest in over 50 years. That backdrop is a seeing is believing element. The flip side, this time it is different. It could explode on the back of the coronavirus response. Matt what do you think about the idea that mornede monetary theory has become an acceptable practice or the idea that that is what makes it ok for investors that governments have spent so many trillions of dollars in order to bail us out of this without having the g. D. P. Growth prospects to back that up. G. D. P. Is going to soar and you really dont see that impacting yields or gold or the dollar that much. I think that is true. The reality is that everyone thought q. E. Would cause inflation. It didnt. Everyone thought driving down unemployment levels would drive inflation. It didnt. In the background, there is some Structural Force driving down inflation. That is probably things like nd the global workforce. It can spill out to where there is more space. I think there are structural factors. Maybe this time it is different. There is something around putting money in peoples pockets rather than asset markets and the case that q. E. Will lead to a different response and greater inflation Going Forward. Anna do you think well see inflation big time for that eason . We dont believe it is oming. It will continue. Therefore this will remain. You dont want to stand in front of it like that. We do not think it is different but we do think if you look at inflation markets, just below where they started the year. If we see that break out further, thats when we start to elieve against it. Matt what do you think were going to see ha happen to the price of gold, which has hit highs recently and bitcoin. Back to 11,000, 12,000. These kind of assets that people worried about inflation sometimes might reach for. Yeah, i think so. Gold should be a headwind for it Going Forward. There is a lot of enthusiasm. It is a bit bubbley in that respect. A bit like coin. You can argue the same about lements. I would expect those to be headwinds and expect bitcoin to remain volatile. Clearly it has its pro points and supporters. In the gase of gold, if we saw real yields become more negative in the u. S. , we would continue to go against that and again that would not be supported. Anna what do you think of some of the trades that tend to tap into what the fed is buying. Are you happy to just keep following the fed there or start to divest some of the exposure . We have been short asset rated credit for two months. It just moves so far, so fast. We cut it when it got to around 130 because it had gone so far so fast. There has been a relative pullback. Were looking to going more neutral. High yield spread. There is one area where we think the fed backdrop coupled with the higher than normal spread eaks its attractive. Matt thanks so much for joining us. John roe. He will be continuing the situation with us on Bloomberg Radio as well. You can get more from john at 9 00 a. M. U. K. Time. 10 00 a. M. On the continent by just going to bloomberg. Com radio or you can click on the radio button on your bloomberg mobile app. Coming up, trading the stay at home economy for the first time European Exchange traded funds tracking the nasdaq have attracteded more money this year than funds tracking the s p 500. We can hear more about that on e. T. F. Ly program europe. This is bloomberg. Anna welcome back to the European Market open. This wednesday. 22 minutes into the session. We see some modest gains for the European Market. The ftse 100 underperforming a little. We have more offerings on the docket. Good morning. Give us the details on the latest offerings. Good morning. Two new exciting u. S. Offerings here. Filed with the. E. C. F. C. C. Tuesday. Doubled iff robens, he his target adding gary kohn to that listing. Seeking 600 million. Katie liive of the excitement among u. S. Investors for things that might otherwise might not have been traditional. Talking to folks a year ago. This bag neach part of the market. Matt not everyone understands what a stack is. Basically when a group of people want to buy companies but they dont have the funds. They go to Public Markets and do an i. P. O. In order to get investors onboard and build a war chest and go out and buy funds, a lot of times called a blank check company. P. G. Raising money. Looking at huge evaluations, ell us about that. Looking at a 225 billion evaluation that would include an equity raise of about 30 billion. If it got that number, that ould in fact be thest raise in history topping aramco. This is going to happen on two exchanges. The largest piece is probably going to happen in hong kong but the company will list on the Shanghai Exchange raise rates. They have been viding potentially the risks of being a u. S. Listed company. That might have been the direction some investors will have expected them to go. On the other hand again the exuberance for this Chinese Consumer and as this Company Expands into the Financial Sector well ve to see if this becomes the largest debut on record. Matt thanks very much for joining us on this story. Simone covering the hispanic and i. P. O. s out of doha for us. The spack. Electra had First Quarter profit that beat the highest estimate. That stock soaring more than 13 now. T italy is unlike to block a telecom deal with k. K. R. You can see the full year outlook there cut down to the low enof the range. Not f equity indexes are ting up big numbers, experience the ultimate sports hub. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Matt adversity and volatility are really understatements and were seeing that in a lot of the markets this morning. Lets take a look at whats going on in terms of equity indexes right now. A bit of a mixed picture across europe. We have no change on the cac in paris. The ftse is down. 2 . The dax is up. 2 . You can see the broader benchmark stocks europe rising. 2 . If you take a look at the group ranked returns screen, g. R. R. Go on the index, you can see that banks are the big outperformers today. Media, the big underperformers. I would say this is a fascinating screen to look at year to date if you want to try to explain the difference between what is going on here in germany where were basically unchanged for the year or in london where the ftse is down 20 for the year. The breakup of Industry Groups tells you why that is. Tech stocks are doing well year to date. Right now you can see we have a oneday chart meemple oil and gas and banks are down big year to date and thats why the ftse has so underperformed the dax. Anna . Anna yes. Absolutely. Were still waiting for the dax to get into positive territory. It is not that far away. Just 1. 1 away from being in positive territory. Another day or two, you never know. Lets get an update. Germany is extending its job aid program that has kept millions of people from unemployment. Subsidies were set to last for 12 month it is and now will be provided until the end of 2021. About 5. 6 mill whereon people were on the benefits in july down from 7 million in may. The second night to have Republican National convention was capped by speeches from secretary of state michael ompeo and melania trump. Ompeo sparked controversy. Children over the age of 11 will have to wear facemasks if their school is in a high risk area. That includes moving around a building. They wont be required in a classroom. It will be up to the school to decide if masks are necessary. The end of an era for barcelona. After countless records star player messi wants out. He handed in a transfer request having grown unhappy after a disappointing season was compounded by a hue milllating oss to munich. Humiliating loss to munich. Global news 24 hours a day powered by more than 2700 journal estes and analysts in more than 120 ones. Matt . Matt oil is holding at a fivemonths high as hurricane laura bears down on key refining facilities in the u. S. Gulf coast region. It is poised to back roof ripping category 3 storm. When it come ace shore along the texaslouisiana coast late wednesday. Hopefully those roofs are on tight but it threatens to inflict as much as 18 billion in damages across the coast and keep some of americas largest Oil Refineries shut for months. U. S. Energy secretary said the industry is ready. We are very prepared for this hurricane that is seemingly moving into the houston, southwest louisiana area. The houston channel is there. Big huge refineries down there and several important pieces of our oil and Gas Infrastructure are there. We have a special office here that is directed by an assistant secretary that is responsible for our response. Their teams are working closely with the industry. We feel the industry is very well prepared for this tine of storm. The president president has directed me to make available reserve for instances like this. That is what it is there for. We are doing all that we can to ensure that we are capable of doing that. Immediately following the storm. We feel overall were very prepared. At this point well have to watch and wait to see where the storm ends up. In california, there have been these brown outs. Because it has been very hot. What is going on there . Is there some more fundamental problem . Absolutely. No question about it. California has a history of Getting Energy policy wrong. You may recall the brownouts from 2001. There was a market issue back in that point in time when people were manipulating the market but they were man plathe it because of the wrong policyings california chose to implement amount ath that time. California has decided to move to a 150r7 Energy Rejuvenation world. The challenge with that is that if the wind doesnt blow and the sun doesnt shine, people want electricity, it is not there. So their overall strategy is to borrow electricity or buy it from the neighboring states like arizona and nevada. The challenge with that strategy, when it is hot in california, it is also hot in arizona and nevada. They may choose to keep their electricity because they like their hospitals to run just fine as airconditioning to work well so there is nothing to sell to california. That leaves california in the awful position to have to turn ff the lights. Right now between democrats and republicans over renewables and avoiding emissions on one hand and relying on fossil fuels. Showedsame time the that 60 of americans were concerned about climate. Democrats and republicans see this differently. Can we have a bipartisan Energy Policy in this country . Sure you can. Natural gas is a clean source. Were developing technologies at the u. S. Department of energy to make it cleaner. Were also working on carbon intense fuels like coal to it cleaner. We have had Nuclear Power the last seven years. You can do both and have a renewable zpwren ration base. Generation base. You just have to choose to do it. I think that is what the fundamental problem is in places like california. They have relied too heavily on Renewable Power like the wind and solar. You absolutely need it in todays world to ensure that you have the energy you need when you need it. President Trumps Administration has done a fair amount in trying to reinforce Energy Dependence in the united states. What is left to be done if he is elected for a second term . What is on your agenda . We need to continue to build up infrastructure. We have done a great job increasing our production, making ourselves energy independent. Likeng on new technologies horizontal drilling and fracking. Were billing out Pipeline Infrastructure to get it to the associations and coastlines. It is building export facilities to make this oil and gas available to the rest of the world. They are going to continue to use these types of fuels if for he foreseeable future. Anna that was the u. S. Energy secretary on hurricanes and the first rolling blackout or brownout that they were referring to in california in almost 20 years. With us to discuss from San Francisco is bloombergs ed ludlow. How much is californias Energy Policy to blame for the outages . A t demonstrated achieving 100 carbon free policy is harder than it looks. We have a lot of sunshine here in the state of california. The issue of the last week or so is that it was a case of unprecedenteded demand meeting unusually supply. It was a case during a heat wave consumers turning on their airconditioning at home in the evening at a time when many are home for longer periods because of covid. Californias policy is to import energy from neighboring markets like arizona. They too have suffered the consequences of the heat wave. It is also the policy of decommissioning natural gas power plants on the idea they contribute to pollution to the ocean. They use seawater. Because they were not profitable they chose to shut them down. There is a shortfall they are creating. A broad and bigger issue is energy storage. There is a lot of solar and wind but there is definitely a deficit in capabilities of the state to store the energy they generate. That is something the policy make rs have been focusing on. There are big ambitions. Giving context in the hole whole of this year. We still have a long way to go and the states finances are not in the strongest because of the strains of covid of course. Matt youre on the forefront of our Battery Technology reporting for bloomberg out there on the west coast of the u. S. As well. How does Energy Policy look for california, for america Going Forward or after this . One of the issues is that the battery enthusiasm is largely driven by electric vehicles. Not by the storage component. It is the lesser talked about element of teslas business for example but there are many other options out there. T is not the sexy option basically. Gavin newsome conceded that california needs to go back and readdress the balance how it is eading the energy. There is a big focus on storage and there needs to be investment in battery. Biden wants 100 clean energy in u. S. By 2035. That is 10 years in advance of californias target, 2045. We have seen republicans poke holes in that over the last week pointing to in americas most rich state, the idea that were shutting down things a bit. Yes, there is definitely in california at least there needs to be are rebalance, to go back and look at the policy and see what other kind of base demand options there are to keep the lights on. Anna interesting stuff. Thanks very much for joining us. The blackouts are not the only problem california is facing. Also the wildfires. Well talk about that another time. Thank you so much for joining us from the u. S. West coast. Coming up on the program, European Exchange traded funds have tracked more money than tracking the s p 500. You can hear more about that on i. Q. Kly show e. T. F. Europe. Anna welcome back to the uropean market open. The ftse 100 down a little bit. Everything else to the upside. Exxon mobils exit from the dow industrial is the latest move in a Seismic Shift taking place in the energy market. This careers rally in Exchange Traded funds specializing in clean energy is so big, it is leaving pierce far behind. The S P Global Clean Energy index has climbed 41 . Compare that with the broader s p 500. Henderson. , janice we were hearing from the u. S. Energy secretary early on. He was talking about the challenges california faces having made the switch to 100 renewables. He was critical of the decision. Do you think what i just read there, there is a loss of investor appetite for Renewable Energies and cleaner energies now. For places like california struggling with these decisions and blackouts that have followed. Of is does the future Energy Policy need to look like . I think the policy needs to be a just transition. There is no reason to not transition away from fossil fuels because that is the way that things were going. California has been hit by the horrible forest fires year after year so i can completely understand why they dont want to be associated with something these contributing to natural disaster. However there is thr has to be a just transition. Most investors would agree that we cant have a situation where that rom one technology is contributing to forest fires to another technology that contributes to blackouts. There has to be some sort of middle ground. I think with some of these have been made earlier, the middle ground could be struck by having cleaner base load and moving to 100 renewable technology. Matt it is not just forest fires that are out of control. We see more and more natural disasters in the form of hurricanes, hurricane laura is about to hit the gulf coast. How can investors confront this kind of climb change . There are several things that investors should be looking at. I would say this has gone beyond e. S. G. This is now looking very much firmly at fiduciary duties. You going to be losing money if youre exposed to these areas. One thing i would encourage investors to look at would be Climate Change exposure. We have also seen that more that is has taken place to show where certain areas repeatedly being it by these natural disasters. E question has to be as an investor, do you want to be involved in or exposed to an area that is constantly being hit by natural disasters and seems to not show any resilience. I think the key word there is resilience. We also there are countries out there that have resilience. Were r were not seeing resilience measures in place here. Anna can i ask you about the economy . It is something we talked about. You seem to be impressed from what i have been reading about what nike and others in the sports legend ware have done on that front. When you look at companies of that front that manufacture in emerging markets often, do you find that companies in that sector might be doing something that is good on the environment but then they fail to meet your criteria in terms of paying decent wages. What is the contribution of businesses such as that . That sector . We are ld say for us, always looking at continued improvements lt so we recognize there is no such thing as a traffic company. Companies are on an improvement journey. As long as we see this improvement, those are the companies that we want to invest in. So in the case of a company like nike, we have seen that improvement with efforts being made to clean up their supply chain. Efforts being made to make sure they are being a lot more transparent with how they do business and also now creating ood such as a shoe that can be given back to the company and 100 of that shoe is made into a new shoe. That is revolutionary. These are the things that can help with solving a lot of our climate and environment a. M. Issues. Matt when i look at the fashion industry my biggest concern is the Human Trafficking and the labor issues there. How do you confront those as important pieces of the snmbings e. S. G. Investing . They are as important as the e. I think one of the things that we have been doing very heavily is to not only look at what companies have been doing but also to speak for companies about where we see issues this their supply chain. For example, we have spoken to ike. With regards to supply chain issues in the past. We will continue to speak to them. We have been doing a lot of work especially in tech industry. With regards to companies such as microsoft and tesla regards their exposure to cobalt, mining. These companies have shown they are moving more towards clean outpost supply chains. I think the supply chain issues one of the things that were seeing is that it is not easy for a company to mitigate against all of these abuses because there have been efforts made that prevents transparency even in those countries. Part of that has been an lot of these countries, for example, the democratic republic of congo are afraid they are going to lose business because companies dont want to be involved in hese kind of industries. What the company is saying help us being more transparent. Help us to show to our customers that you doing the right thing. Help us to keep those things in place. Anna thank you so much for your time. Come back and speak to us again in the future. Coming up on the program, what the impact of a sliding euro on merging market currencies. Well look at f. X. This is bloomberg. Matt almost an hour into trading today. Seeing mixed markets. Headed out to Bloomberg Radio. So tune in. This is bloomberg. The s p and the nasdaq close at fresh highs. Larry kudlow praises the market at the national convention. Hurricane laura nears the u. S. Gulf coast. There are fears the storm could drive 30 miles inland causing massive damage. More stimulus. France intends to present a 100 bieu