Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

As we await clarity from jay powell in the new inflation policy. Ray dalio says fiscal and monetary injections have put the dollar under threat. Johnson revolt, boris reaches out to rebels in his own party to gain support for his plan to override the brexit deal he struck with the eu. Ftse futures are underperforming. Facebook versus the ftc, u. S. Authorities are preparing a possible antitrust lawsuit against the social network. Kim kardashian urges her 188 million instagram followers to freeze their facebook accounts. We have breaking news in the form of earnings coming across the ticker. Thespanish giant hosting of 8 billiones euros. Net sales a little more than 8 billion euros. We were expecting a net loss in the first half. Euros in 195 million terms of earnings before interest and taxes. There was a loss there also, 198 Million Euros, but it did have a positive earnings before interest taxes depreciation of 1. 4 9 billion euros. We will bring you any breaking news. Remember yesterday, h m shares soared. Anna lets talk about breaking news from london. U. K. Numbers coming through. Consumer prices, rising 0. 2 year on year. The estimate was for no change. Ont we see across the data inflation, Inflation Numbers have come down but not as much as anticipated. Not as weak as the estimates had forecasted. Cpi falling 0. 4 . ,nybody watching factory output factory output prices falling by 0. 9 year on year. 0. 7 . Timate was that is the picture in terms of inflation. Inflation will be a big topic of conversation with the fed said to speak later. And the bank of japan and the bank of england later this week. Matt lets take a look at European Equity index futures, just under one hour from the start of cash trading. Red arrows across the board. That futures little changed, while ftse futures are falling 0. 66 . U. S. Futures in the green this morning. There is a long way to go until the open of trading there. Very little changed on s p and dow jones futures. Nasdaq futures up almost 0. 2 . Anna the asian equity session, small gains being made at the aggregate level on msci asiapacific. U. S. Futures flat the positive. On the nasdaq yesterday, that tech focus rolled into the asian session. Under pressure because of the facebook antitrust story, then rebounding a little bit. We are broadly flat positive across asian equity markets. The australian equity market outperformed a little bit. We are waiting for the fed to see how much central bank support we will get, how relaxed the fed is about inflation. Lets get the first word news update with lower all right. Laura the world health it iszation ruled unlikely to lead to any changes in washington. The white house can effectively veto the decision by appealing. It has blocked new appointments to the wto. Assident trump is touting it the foundation for comprehensive peace across the middle east. The United Arab Emirates and bahrain signed accords with israel. They also agreed to Exchange Ambassadors as soon as possible. Many crucial questions were left unanswered. Fires continue to rage from california to washington state. Or than 5 million acres have burned, killing dozens of people. Air quality remains poor and reading in some areas is hazardous. Skies over new york have been milky gray due to the jet stream carrying smoke across the country. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Bloomberg. Matt thank you very much, lower all right in london laura wright in london. U. S. Futures are little changed with the exception of ftse futures that are falling. Investors are awaiting news from the Federal Reserve meeting to engage the extent of central bank support for the economic recovery. Lets get into markets with laura cooper. Bankal bank after central lately coming out with no change to already low Interest Rates, and basically updating economic forecasts further out. And saying rates will stay lower for longer. Do we expect anything different from the fed question mark laura that is what markets expect ahead of the meeting. Upgrade in terms of its forecast and maintaining rates. Analysts do not expect Material Changes in terms of the actual guidance, and they want more clarity in terms of the new operating framework. The fed will welcome inflation running hot, but for how long and how hot is hot . There are key risks market should watch out for. Quantitative easing, bond urges in program is predicated on ensuring markets are properly functioning. That is not an issue now, and warrants clarification. We expect to see some signs around that, and expect the longer end of the curve is most at risk to any signal they will not tweak that. There are things to watch out for, even though we do not expect a Material Change out of the meeting. Anna another central bank this week is the bank of england we are focused on. Inflation data suggest a retreat instead of the inflation picture from last month. The august Consumer Prices rising 0. 2 , the estimate was to be flat. We are not talking about much inflation. What are we expecting from the bank of england this week . Are they just readying themselves for action later in the year . Laura i think that we did see core Inflation Numbers beat soon forons, it is too the bank of england to read anything into that. Ultimately the bank of england does still expect price pressure , and escalating risks around brexit tensions, and we could see another no deal cliff edge exit. That is aggravating the challenges they face as well as the slightest recovery. I expect them to maintain dovish guidance and become even more cautious. We have seen rates markets pricing in 10 basis point rate cuts by february, and markets are expecting an increase in quantitative easing. The bank of england and its bond for dissing program will and by the end of the year. They will have to revive that to meet what is becoming a more cautious and dovish expectation from the market. Matt thank you very much for joining us, laura cooper, the bloomberg mliv macro strategist in london. Up next, we will stay focused on the fed. Policymakers are expected to stay dovish in the rate decision. Anything other than that would be a huge surprise. Will we get new guidance today or after the u. S. Election . This is bloomberg. Anna welcome back to Bloomberg Markets european open. 45 minutes until the start of cash equities trading. We see futures in europe two points to the downside particularly on the ftse 100. Here is lower all right. Isra President Trump prepared to decide whether oracles alliance with to talk, even the details have not been revealed yet. Understands oracle would invest in a restructured global tiktok. It would maintain majority ownership. The u. S. Looks to be preparing a possible antitrust lawsuit against facebook. The federal trade commission has been investigating the social network for more than a year. No final decision has been made. It could file a case by the end of the year. Facebook and ftc declined to comment. Apple has unveiled a series of subscription bundles. One combined several different products, including apple music, tv and Cloud Storage. It is part of their product blitz that included new apple watches and upgraded ipod air. Ura wright with a Bloomberg Business flash. Investors are focused on the fed decision, policymakers are expected to stay dovish. A key question will be whether new guidance comes today or after the u. S. Election. This is the last meeting before the u. S. Election. Lets get over to michala marcussen, group chief economist, Societe Generale. Let me ask what you expect from the feds forecast today and outlook on growth and inflation . Michala the interesting thing will be to look at the mediumterm outlook and see what the fed suggests in terms of Interest Rates. This will be a first focal point for the market. My suspicion is we will see a dovish message from the fed today in terms of the longterm Interest Rate outlook. The second thing is to see whether we get further clues as to which policy tools the fed is planning to use to deliver their goals. We have seen a lot of discussion recently on yield curve targeting. The fed is telling us they are thinking this is a possibility, but not something they are planning to use immediately. And when it comes to the actual growth outlook, the real issue is what happens on the fiscal side. What we are seeing is congress is struggling to agree for a new stimulus ahead of the election. The danger is we will see a patch on the fiscal policy side rather than the Monetary Policy side. That is where my concern is focused now. If we do not see stimulus coming quickly for the u. S. Economy, we could see a weak start to 2021. With thet how weak start of 2021 be . Michala i dont think it is easy to put a specific number on it. A lot of what happens for the economy will also depend on what happens in terms of the pandemic. Mind, the longer the Current Crisis continues, the less stimulus we get. What it really means is the recovery phase of the economy could drag on for much longer, and be much lower. Be much slower. Matt what policy response is necessary here as governments debate extending for the schemes for the entire country, or looking at targeted moves they can make in order to make sure they do not have too many Zombie Companies . Michala there are two dimensions to the policy debate. The first is making sure workers who are furloughed or becoming unemployed get help and support. This is the first leg. Then it depends country to country depending on the various measures, but when governments put in place many of these measures, they were blanket measures put in place quickly. Now is a time where they need to be finetuned and adjusted, but that is not the same as saying they should be removed altogether. I think they are very much needed. The second dimension is looking ahead to the recovery phase, and making sure there is support for the initial demand recovery. Also looking longerterm and thinking about the Growth Drivers of the economy, and here theurope this is about green transition, the digital transition, education policies, reskilling, what our lifestyles are going to be. These are longerterm issues, and to my mind it is the balance between those three legs of fiscal policy that will be key. It is easy to say we need to finance green and digital transitions and education, and another thing to implement it on the ground. There will be determined focus on getting these policies implemented. Anna you mentioned you will be interested to see how dovish the fed is. What does that add up to . Forward guidance suggests rates will not move until 2023. What is your assessment . Michala i would not be surprised if we see forecast seeing rates kept at incredibly low levels throughout the 2023 horizon. Rate projections near zero through the horizon. That will give a dovish message to the markets today. That is as far as the fed will go today in terms of signaling to the markets. But what would be interesting to see is if they give us more specific messages on the policy tools they plan to use down the road. Much,thank you very michala marcussen, group chief economist, Societe Generale. Stay with us, dont go anywhere, we will get for their thoughts from you in a moment. The European Commission is set to unveil an ambitious green and economic recovery. A live shot of london, not as busy as it normally is. This is bloomberg. Anna welcome back to Bloomberg Markets european open. The trading session looks to be way down here in london, ftse futures down 0. 6 . The European Commission president is expected to unveil an ambitious emissions cut program. It will leave no sector of the economy untouched and forth wholesale lifestyle changes. Michala marcussen, group chief economist, Societe Generale is still with us. We touched on the green conversation, but i want to expand on it. There will be green pledges on infrastructure, and other green pledges, what will separate them . Will it be the size and the scale of the fiscal impact . Stimulusty to deliver will be something economist will watch closely . Michala absolutely. What we tend to see from infrastructure plans, what history has shown us, obviously one thing is getting them through parliament, but another is getting them implemented on the ground, and make sure they deliver the economic results hoped for. The green transition is an important and key driver for our future. It is important that the European Commission and european government get this right together. Keen torespect we are see what targets she will push today when she gives her state of the union address. The other thing about the green transition which is important to keep in mind is that it is also about accompanying it with the digital transition. The two will go handinhand, and one of the key issues is making sure we have the right educational policies in place both for schoolchildren and Lifelong Learning for adults, so we can make sure we can have this transition become a positive growth driver for europe. There is Great Potential here, and a positive development. It will take time to roll out. Matt speaking of schoolchildren, when i was in fourth grade, everyone getting thated up for earth day was a long time ago, and we do not make much of a change. 10 years ago, biodiversity warnings were raised, and nothing has been done, and it is getting worse than ever. Do you think this time there are enough animal spirits behind the cause that we will really do something about it . Michala i think so, yes. I think what we are seeing is there is a major shift in public opinion, a major shift on the political side. We are seeing a major push on the financing side. We see a push from many fronts today. I believe there is a determination to do something about it. The reality is we are beginning to see some of those effects that you rightly point to the fact that there were warnings about this decades ago. ,oday what we are seeing effexor becoming divisible today becoming visible today. There are a couple things we need to be cautious about and putting policies in place. We need to make sure policies are equitable, so we do not end up with people feeling left behind by these transitions. We saw that case here in france of the diesel tanks and the social unrest that followed, because that was not considered sufficiently. We also need to think about advanced and emerging economies. Matt we have absolutely seen that equity problem in the u. S. Thank you for joining us, michala marcussen, group chief economist, Societe Generale. Matt back to Bloomberg Markets. This is the european open. Not a lot going on in terms of futures with the exception of the drop in ftse jurors futures. Changereally little action in terms of futures prices. Lets look at the key events. Is presenting new economic forecasts for g20 economies at 10 00 a. M. London time. 3 00, the british Prime Minister Boris Johnson will be questioned by the powerful Liaison Committee as andernment judges juggles tricky brexit negotiations. Will join aspun panel to discuss considerations for a sustainable recovery. The conversation gets underway at 4 00 london time. And the Federal Reserve which is holding its last meeting before the u. S. President ial election will publish its decision at 7 00 p. M. London time. Investors will be hoping for guidance as well. What policymakers want to they ever even think about thinking about raising Interest Rates. Your thoughts on the subject. Lets get a view of what analysts are looking at with the morning call. As we look to the leadership suganomin, in japan, cs may lack specifics. We have been watching tokyo all morning. What are analysts saying . Bloombergs economics saying the new Prime Minister, what they are looking at is more micro oriented policies he wants to focus on, bringing japan more into the digital age as well. To maneuvercky path given you have seen japans economy fall into a negative growth because of what we are seeing with the pandemic. Nikkei is a little bit uneasy to understand in terms of what you are seeing with micro oriented thoughts from suga. The lack of understanding could appeal to foreign investors. You have the boj tomorrow as well. The white line you can see is ga is dealing with. Chinese tourism stocks. What does this mean . This is one country where you can travel. International borders are closed. A lot of pentup demand. Citi turning bullish on not just the airlines in china. Valuations are looking attractive. They are also looking at other stocks as well. Any progress on the vaccine could further boost Investor Sentiment in the shortterm. They are looking at Hotel Bookings and car rental prices, favoring Hotel Operators including development you can see. They are expecting sales to rise to record high numbers. As we head into that weeklong bullishin china, citi on tourism stocks in china. Matt thanks very much. Your morning with call. Lets get your Bloomberg Business flash now. President donald trump is preparing to decide whether to approve oracle buying tiktok. It is not an outright sale. Oracle would invest in a restructured global tiktok. Bytedance would maintain majority overture. A lawsuit against facebook. The federal trade commission has been investigating for more than a year. No final decisions have been made. It could file a case by the end of this year. Facebook and the stc ftc declined to comment. Bundles. Unveiled apple one includes music, tv, and Cloud Storage starting at 14. 95. It is part of a product blitz that included new apple watches and an upgraded ipad. That is your Bloomberg Business flash. Anna the next few months, the u. K. Could be on course for more than twice as many job losses then following the financial crisis. Roles look set to be terminated in the autumn in the u. K. The chancellor is facing growing calls from it groups and lawmakers to extend the furlough program, set to end next month. Joining us now is tony wilson, director of the institute for employment studies. That is the big political question over the jobs market. Whobest to support those are unemployed or how much to support them as we go into the winter months. What do you think Government Support should look like if there is something to replace the furlough . Even if it is not as extensive. I think that is right. The government have got two big challenges. Plans we support those that would otherwise be viable but are disrupted by the pandemic . There is a risk a lot of jobs will be lost as we continue as a consequence of lower demand. At the same time, not wanting to get in the way of necessary restructuring, particularly in retail, which is being hit, moving online, driven by the pandemic. What we want to see is really wage subsidy support in targeted sectors. Also really focusing on helping those people who are facing job losses to get the new jobs that are still being created in the economy. Anna you mentioned sectorspecific report. Those who oppose that say it is difficult to draw a line between one sector and another. The supply chain to a sector for example. How do you get around that. Loweromething is just levels of support across the economy than we have now rather than picking sectors . Do, theres going to be rough justice. There will be some firms who might find they followed the wrong side of the line. I dont think we should let that stand in the way of us doing anything at all. The general risk would be it is just not enough for those firms because they cannot trade. It may be too much or not necessary for those firms that are getting back to normal. There are clearly industries that would be viable if they could just get through the winter months. Matt are you against the extension they are not going to do it now, but the furlough scheme, or do you think the u. K. Government should be extending the furlough scheme like other governments in europe . I dont think we should continue the scheme as it is now. France, there is more of a process around consulting the workforce. You need to get approval from government or from labor authorities. In new zealand, a threshold. In the u. K. , any employee can claim wage support. That was justified. We need something more targeted now. Matt is it necessary for companies, even industries, to fall in order for Creative Destruction to bring progress . It will be. That is a painful process. It is an awful time for anyone to be losing their job. Losing a job in a recession can cause lasting damage. In the long run it is better to try to help people find new jobs in industries that are growing than risk being trapped. We want tooint is make it as easy as possible for firms to create jobs. It is as easy as possible for new firms to create jobs. I have listened to bodies try tosome find a solution. Is there anything we can do one able to bet would be delivered in a speedy fashion . The short preemployment training that can get people through the door into the workplace and functioning in work. Requires not always highlevel qualifications. Putting as much of that in as possible is really important. We should look at the approaches within industries to try to help people progress through an industry or into highlevel talks. The u. S. For example is a good example in Digital Technology industries. Looking at a sector approach would be important. Training is an important part. Anna good to speak to you. 20 minutes until the start of the cash equity session in europe. Coming up, inditex returns to stability reporting net sales for the first half of the year in line with estimates. We discuss that next. Next. The welcome back to European Market open. The london market could be an underperformer. Future suggesting we will be weaker. Has seen clients pull 3. 5 billion so far this year. Has also expressed concern about u. S. China relations. Kinds of wars. Ve we are in four of those, could be a fifth. There is a trade war, a technology war, a geopolitical the beginning of a capital war, and then there is the question of a military war. Having watched these things over a period of time, having close contact with the situation, we do not internationally have a rulebased system so that there is a testing of each others done in public. When leaders watch one later back off onther that brinksmanship testing, that is a highstakes, dangerous game. Issue and will be a for the rest of our lives. Book llison wrote a we have talked about it before. I would be remiss not to ask you about your firm, bridgewater. No secret to many people has had a difficult year. Firmou confident that the can grow through the stuff passed it and improve returns in your Flagship Fund . We have Something Like 140 billion in clients who have faith in us or they would not were the Largest Hedge Fund for a particular reason. There are people who are not knowledgeable about that. We had a bad year so far. Our pure alpha leads fund is down 15 . Years, we have0 never had a significant any significant downturn. Nothing. But we knew there will come a , andwe missed the pandemic that is the reality. Problemo say there is a in the media, we have had a particular problem, particularly with one correspondent with the wall street journal, and if you the at the particulars on case we went to in terms of misrepresenting what the situation is, that is an issue. That happens. We are transparent. These things come about. Im not worried about any of that. We are operating in the same way we have always operated. We had so far a bad year. Bridgewater Associates Founder ray dalio speaking to bloomberg. Profitabilitys to and generates 734 Million Euros in the second quarter. Headline. Ys own pr it reported net sales in the first half in line with estimates, but a big net loss. More, our Bloomberg Opinion columnist joins us. Text says into tax inditex says a return to profitability, but we see a net loss. What is the real story . Recovery. The most interesting figure actually is total sales through each quarter. Half,ell 44 in the first 31 in the second quarter, 11 percent in the first few weeks of the third quarter. That shows as stores reopened, sales are going up. Are going up,ales there is recovery. What have we learned . Can we continue to see progress bringing down inventories i got stuck in the wrong place during the pandemic in the west . Inditex has done well on that front. Their stock fell by 19 the first half. Dont forget inditex has got this flexible model. Quickly switch on and switch off production as it needs it. That helps it to react to whats going on. We have seen that come through ing the matt are there concerns recently i was a movie about philip green that talked about the Garment Industry and the social effects, economic effects. There was a documentary, the true cost from 2015. Is that at all getting to the public, or are people willing to euros for a top at zahra regardlesswhat of what the labeler is made to suffer through. I think that is in general, whether that is the environment i think the pandemic will exacerbate that. Many have bought less and the world did not end. It is likely as we go forward we can get by with less. Seeping into that environmental concern, i think that will be a pressure going forward. Only it helps when you have to dress the top half of regime call top half for a zoom call. Your stocksprogram, to watch including julius baer. The Company Plans to approve a dividend payout. Dend payout. Matt welcome back to Bloomberg Markets. This is the european open. Lets get your stocks to watch. What will move up or down . Lets go to dani burger in london. one of the biggest swiss banks is downsizing. They are going to cut costs about 1000 employees are going to be affected. Halving. Ing the they are Branch Network had been a significant part of their business model. Instead they say more customers have adopted a Digital Banking system. They are going to put one billion krona into digitalization at the bank. They have become a top pick at morgan stanley. Morgan stanley saying the challenges the bank might face this point. It is time to go ahead. Bankingicking in the sector there are not that many banks in the euro zone finding it easy to pay dividends. Julius baer in switzerland, what is their story . Dani switzerland has had a defective ban on dividends. Regulators saying you need to preserve capital. A lot of these banks julius baer included split their 20 dividend in half. Is disturbing the second part of that dividend distributing the second part of that dividend. They might need to pay tens of millions of dollars to u. S. Regulators in an investigation into money laundering. Investors might be pleased to hear they are reaching a resolution. Julius baer also in the middle of talks with swiss regulators over the same issue. Matt thanks very much. Dani burger with some of the stocks you should possibly be keeping your eye on today. You may also want to watch suez this morning. Its going to sell assets to germanys sparse group. Recycling 1. 1 billion euros. Coming up, the market open. Futures really are not doing a lot. Compared to what we see in london. Real moves on the ftse. Dax and cac futures unchanged. The open is up next. Anna a minute to go until the start of cash equity trading for this wednesday morning. Fed day, stocks steady as we await clarity from jay powell and the new inflation policy. Ray dalio says monetary inflections up at the dollar at risk. Boris johnson reaches out to rebels in his own party to gain support and override the brexit deal he struck with the eu. Ftse futures underperform. Facebook versus the ftc, authorities are preparing a possible antitrust lawsuit against the social network. Kim kardashian urges her 188 million instagram followers to free their accounts. Matt lets look at european futures, you will not see Much Movement outside of what is going on in london. Even their ftse futures only down 0. 5 . Not a lot of information from futures. If you look at the percent mispriced, you would not see a lot of movement. Here is the live cash trade, global macro movers screen easily accessible on bloomberg, just type gmm , and you will see the ftse in the lefthand inumn and the equity indexes the lefthand column when they start trading live. The ftse down 0. 4 . The ibex up 0. 2 . X unchanged. Da European Markets generally flat with the ftse posting mild losses. This, as investors look ahead at all that is going on today, mainly the fed meeting is the biggest thing happening. That is the main thing investors are looking ahead to. Freddie lait, cio founder, latitude investment joins us now. What do you expect from the fed today, and how much can the Central Banks do . Lately they are saying a lot of nothing. Freddie they can do everything, that is what they are trying to do. The big announcement was the last time the fed spoke and changed their inflation targeting regime to allow an overshoot of inflation. They need to back that up today. Anything other than support for that maybe will see belief that the fed dot plot stays low so future Interest Rates stay low for the next few years despite an expected pickup in inflation to demonstrate their willingness to allow inflation to run hot in the economy. While rates stay low, that is the critical piece. For financial assets, what matters more is the Interest Rate move. Bound that lower will be critical, and i expect them to maintain that. Anna how are you positioning ahead of the u. S. Election . You talk about the possibility of President Trump winning another term, and if you think that is the likely outcome or a possible one, how do you position your investments around that . Freddie i think it is a hard call. I think he probably does win again. And the last time in 2016, the markets were wrong, i would not expect a lot of volatility. I think there are a couple of things to say around that, it will be increasingly volatile going into this. We may get more fiscal stimulus, but the other thing to expect is more volatility around the election. I anticipate it will get more aggressive on the battle lines on the party trail. , most of thear effects of the stimulus and political situation and monetary stimulus lead me to believe in a weaker dollar. Given the outperformance of u. S. Equities and dominance from the tech stocks there is reason to believe a lot of that andtioning has peaked, maybe rotating asset set of u. S. Dollar and u. S. Equities through the election and beyond seems wise to meet. Seems wise to me. Matt out of there and into where . When you get out of the u. S. Dollar and u. S. Equities, where do you put that money . A lot of investors are just holding a lot of cash. Freddie we have a bit of cash, but we are investing a majority of it. It is the big question in our committee meetings. When you look at the u. S. , you get more frightened when you look around. You are not looking to buy markets or regions, we are not looking to buy economic exposure. We are looking to buy individual listedhat are global and in different regions. We are looking into European Assets predominantly at the moment. Believe itdollar, i will be a broadbased weakening of the u. S. Dollar. It is a hard platform to argue from your base currency is sterling such as ours. Ofm not a huge bull sterling, but the potential for the u. S. Dollar to fall 20 in the next 1218 months. That would be hugely meaningful and all boats would rise on that tied, all currencies around the world. It does not have to be a bullish bet to think there would be broadbased dollar weakness. Anna talking about things you could buy, what about the tech rally . Do you want to participate in names, or cap tech is it better to go down the side scale . We have been selling we got off the ride in hindsight too early. There is nothing like an absolute valuation. ,hatever they are trading on what is clear is you can find other large cap businesses, maybe 50 billion and not to trillion dollars. Very large and global not to trilliot 2 trillion dollars. Will noth stocks maintain 20 earnings growth, and when you combine that valuation discount which is absolutely huge, and you are better with smaller earnings, combine that with the tail risk of the ftc versus facebook, and the European Union trying to go after google, a lot of tail risk that they pose to society and the monopoly positions they have. The riskreward is so much in your favor to buy other highquality businesses rather than mega cap tech. We have taken almost all of our money out of that space now. Matt stay with us, we will talk about new companies you have invested in. Freddie lait, cio founder, latitude investment will stay with us and talk about what he money andith the which companies he is picking that are good value and have good growth prospects. One of the themes that freddie will talk about is no longer staying at home. Eat out helps out, why he is looking at going out stocks for the longterm. We will give you more of his strategy, next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. The europeanto trading session. Live pictures from brussels as eu officials wait for a speech around the green agenda. We will listen for what she has to say. As we wait for her to come up, we will bring you some or all of. Hat speech we will show you where we are on the European Equity markets. Across the European Equity space, we are fairly flat, a mixed picture. But the 100 down by 0. 3 . Perhaps a little retracement after gains yesterday. Weakness in some of the mining stocks. That is a big weight on the stoxx 600. Bloomberg business flash. Laura President Trump is deciding whether whether approve oracles purchase of tiktok. U. S. Looks to be preparing for a possible antitrust lawsuit against facebook. The federal trade commission has been investigating the social network for more than a year. No final decision has been made, but it could file a case by the end of this year. Declined to the ftc provide comment. Bundles ofing different products including apple music, apple tv, and Cloud Storage. It is part of the blitz that included apple watches and an upgraded ipad air. Matt thank you very much, laura wright. During the big winners the last six months have been stay at, amazon, netflix. Teamin europe one called viewer is a stayathome stocks. Our guest says the tide is turning, and now it is time to buy outgoing stocks. Freddie lait, cio founder, latitude investment is still with us. Seen eat outu have to help out hurt stayathome stocks, because the more people went out to eat, the less they shopped for food the cook at home. There is a key point here, one way to think about this, i believe the economies will open more quickly, therefore i will buy that short trend in going out stocks. The way we have looked at it is what is the relative attractiveness now given the moves in these stocks. One that we sold is an electric car, a great business and beneficiary of the trend of people staying at home. What is the relative attractiveness of that stock compared to stocks that will benefit in the future of people getting out . The discrepancy in valuation is so large that it is our opinion if you believe it happens the next three to 12 months or cocacola at any point, when people start going out and drinking cocacola around the world, that stock will be seen again is a defensive stock. It is trading like a cyclical at the moment, caught up in a unique scenario of closures during lockdown. Examples like that are throughout the market globally, where we specifically are looking at what is mispriced in this risk of the covid lockdown, and what will benefit . Anna you think some companies in the drink space might operate in a similar way to cocacola. You think the market has got them wrong and they play like cyclicals but have defensive qualities . Freddie absolutely, if you look historically, we added to cocacola which we bought in march as well as heineken. If you look, they trade defensively. People still buy beer and cocacola. There is not much of an impact of an economic slowdown on these businesses. This economic slowdown is coincident with people going out, and those businesses are over index to people going out rather than checking at home. Pepsi has 15 of exposure due to its neck business. Its snack business and theyit is 40 50 , are trading on multiples compared to the market, and in particular the stayathome stocks, which we believe are overvalued now. Matt you have back to work which like team player helps people work from home, but you have stocks that depend on people getting out. Freddie that is right. We have invested in two infrastructure businesses, clearly more cyclical, but a large part of their assets is dependent on royalties or fees from toll roads. If you look into the future and believe what we spoke about forier, rates will stay low a long time, that recurring portion of their business will justify the valuations they trade at today. , potentialgrowth farm outs, all comes on top of that. At the moment we are not bullish about shortterm construction markets, but we believe next year it will come back. Spendingink about the governments are doing, one of the key things they will look at is infrastructure spending, and you want to be ahead of that trend. Thatu can be ahead of trend and no people will use the main roads in france or italy or the u. S. , that travel will come back. Airport travel to a large degree too. Anna you think we missed the boat if we were interested in homeschooling stocks . Is that because you do not think children should be at home . Were you do not see value in them . Childreni have four and i cannot think of anything more difficult than homeschooling them. Anna thank you for joining us, good to get your thoughts. Matt always good to have freddie. To freddie in about 40 minutes on bloomberg radio. 9 00 a. M. U. K. Time if you want to hear more from freddie lait, and what he has done with other stocks in his folio. In his portfolio. Tune in to bloomberg on dab digital radio. Coming up, jp morgan sends staff , get a covid banking update. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are 20 minutes into the session, looking at 0. 2 gains on the major continental indexes. The ftse in london unchanged right now. There is increasing concern that covid19 Vaccine Development and approval have become politicized with the u. S. President ial election nearing. President trump is suggesting a vaccine could be ready by next month. Bloombergs Erik Schatzker spoke with bill gates in a wideranging interview and asked how worried he is that the vaccine process is being hijacked by politics. Bill whether it is a strategic leadership point of view or preventing the epidemic coming back to the u. S. Again and again, we need a plan to get the vaccine out to the entire world. The u. S. Has been really strong funding r d in trials. The u. S. Has put more money into that than all of the countries. That is really good. The thing the u. S. Has not done, we have not participated in coming up with factories and procurement money for the rest of the world. , and i think the congress and both parties seize thatis a priority sees as a priority, then people say the r d thing is coupled with the sense that we care about other countries, and want to bring this to a close. Somewhere in the 8 billion to 10 billion range would Fund International activities. Our foundation is making sure we have factories that are available to also make these sex scenes. These vaccines. Erik you were talking about building a coalition of government and businesses and developing banks organized and financed vaccinations for the worlds poor countries. How realistic is that in todays climate of regionalism . The holy country that has not shown up for those discussions is the united states. The only country that has not shown up for that is the united states. We did smallpox eradication. Our generosity that started under president bush and has been bipartisan is phenomenal. People are expecting us to fill that vacuum. Or 10 it is 8 billion billion, it is a percentage what we are spending domestically, likely to behat is supplemental. We need this all to come together, the sooner the better. Other countries including all the european leaders have stepped forward with generous contributions. It is not enough without the u. S. Being there, the world is not used to this vacuum of leadership. Anna bill gates speaking there. Lets go straight to brussels were green is on the agenda. The start of the state of the union address. The sense of duty, i would like to begin by paying tribute. [applause] the stories reveal a lot about the state of the union. They show the power of humanity and the sense of morning m ourning which will live long in our society. They exposed to us the fragility all around us. A thousand times smaller than a grain of sand exposed how delicate life can be. It laid bare the strength of our Health Systems and the limits of wealth abovevalues wellbeing. It brought into sharper focus the planetary fragility that we see every day through melting glaciers, burning forests and now through global pandemics. It changed the way we behave and communicate, keeping her arms at length, and our faces behind masks. It showed us just how fragile is, and howy really quickly it can be called into question around the world and here in our union. But people want to move out of this corona world, out of this fragility, out of this uncertainty. They are ready for change and they are ready to move on. This is the moment for europe, the moment for europe to lead the way from this fragility towards a new vitality. That is what i want to talk about today. Against the great risks of life, illness, ill fortune, unemployment, and poverty. And helpsstability better absorb shocks. It creates opportunities and prosperity by promoting innovation, growth, fair competition. Never before has that enduring promise of protection, stability, and opportunity been more important than it is today. Allow me to explain why. Must continue to protect life and livelihoods. Importantl the more in the middle of a pandemic that shows no sign of running out of steam or intensity. We know how quickly numbers can spiral out of control, so we must continue to handle this ,andemic with extreme care responsibility, and humility. In the last six months, our Health Systems and workers have produced miracles. Every country has worked to do its best for its citizens, and europe has done more together than ever before. When the Member States close goods. , we create when more than 600,000 citizens were stranded all over the world , the eu brought them back home. When some countries introduced export bans for critical medical goods, we stopped that and assured critical medical goods should go where it was needed. We worked with the European Industry do increase production of masks, gloves, tests, ventilators, a Civil Protection mechanism that ensured doctors will be able to treat patients in italy, or latvia could send masks to its baltic neighbors. And we achieved all of that without for me, it is Crystal Clear we need to build a stronger European Health union. [applause] it is time to do that. [applause] president von der leyen and to start making this a reality, we must draw the first lesson from the health crisis. We must make the new Eu Health Program future proof. This is why i propose to increase funding, and i am grateful this parliament is ready to fight for more funding and remedy the cuts made by the european council. We need to strengthen our crisis compared this and management across Border Health issues. As a first step, we will propose to reinforce and empower the andpean Medicines Agency center for disease prevention and control. Buildecond step, we will of Biomedical Advanced Research and development. This new agency will support our capacity and readiness to respond to crossborder threats and emergencies, whether of natural or deliberate origin. We need strategic stockpiling to address supply chain , and as a third step, it is clearer than ever that we must discuss the question of health competence. It is a noble and urgent task to do this for the future of europe. [applause] andident von der leyen finally, and because it was a global crisis, we need to learn the lessons, this is why along with the Prime Minister and the italian g20 president next year, i will convene a Global Health summit next year in italy. This will show europeans that our union is there to protect them all. This is exactly what we have done when it comes to workers. Office, i vowed to create an estimate to protect workers and businesses from external shock. Experience as a minister for labor in social affairs, these work. They keep people in jobs, they keep the skills in the companies, and they keep the business in business. These are the motor of our economy, and they will be the engine of a recovery. This is why the commission created the program. I want to thank this house for working on it in record time. Has avoided mass unemployment seen elsewhere, it is in thanks to the large part the fact around 40 Million People applied for short time work. The speeding unity of purpose means 16 countries will soon eurose almost 90 billion to support workers and companies. It will give peace of mind to families who need that income to put food on the table, or pay rent, and it will help protect millions of jobs right across the union. This is real European Solidarity and action. And it reflects the fact that in our union, the dignity of work must be sacred. Is that for too many people work no longer pays. Dumping wages destroy the dignity of work, penalize the entrepreneur who pays decent wages, and destroys competition in the Single Market. This has to stop. This is why the commission will put forward a legal proposal support Member States to set up a framework for minimum wages. [applause] everyone must have access. Everyone must have access to minimum wages, even through collective bargaining or statutory minimum wages. I personally, i am a strong advocate of collective fullyning, and would respect traditions. We have seen in many member that collectively bargained minimum wages, how and negotiated secures jobs creates for the companies who value them. Work, and it is time work paid. [applause] president von der leyen the second promise of the social market economy is that of stability. By showing it was united and up to the task, europe provided the stability that economies need. I will not forget when the crisis hit, the commission immediately trickled for the triggered for the first time in our history, we made flexible eurotate rules, 3 trillion to support companies, from fishermen in croatia to farmers in greece to freelancers in denmark, the European Central bank took Decisive Action through the program. The Commission Proposed next generation in record time, thus combining muchneeded reforms. The council endorsed it in record time. Voting was honored with maximum speed. Honorable members, for the first time and for exceptional time, europe has put in place its own common tools to complement National Fiscal stabilizers. This is a remarkable moment of unity in the European Union, and an achievement we shall take collective pride in. We made that. [applause] now itnt von der leyen is time to hold our course. We have seen the forecasts. We cannot expect our economies to start moving again after a 12 drop in gdp in the second quarter. Lingers, so does the uncertainty in europe and around the world. Timeis definitely not the to withdrawal support. Our economies need continued policy support and a delicate balance will need to be struck between providing Financial Support and ensuring fiscal sustainability. , there is no term greater way to stability, through aeness than Stronger Economic and monetary union. Confidence in the euro has never been stronger. Shows theic agreement political backing that it has. We must now use this opportunity to make Structural Reforms in our economies and complete the Capital Markets union as the banking union. Deep and liquid Capital Markets are essential to give businesses access to the finance they need to grow and invest in recovery in the future, and they are a prerequisite to further strengthen the International Role of the euro. Lets get to work and finally complete this generational project. Is therd during promise promise of opportunity. The pandemic reminded us of many things we may have forgotten or taken for granted. We were reminded how linked our economies are, and how crucially a market is to our prosperity and the way we do things. The Single Market is all about opportunity. Opportunity for consumers to get value for money, opportunities for a company to sell everywhere in europe, opportunities for the industry to drive Global Competitiveness. For all of us, it is about the opportunity to make the most of the freedoms we cherish as europeans. It gives our companies the scale they need to prosper, and a safe haven for them in times of trouble. We rely on it every day to make our lives easier. It is crucial for managing the crisis and recovering our strength. Lets give it a boost. We must tear down the barriers of the Single Market, we must cut red tape, we must step up implementation and enforcement, the freedomrestore as fast as possible. The linchpin of this is a fully functioning area of free movement. We will work with parliament and Member States to bring this high up on her political agenda, and we will propose a new strategy for the future. Based on this strong internal market, a European Industry has long powered our economy, providing a Stable Living for millions, and creating the social hubs around which are communities are built. A new industry strategy in march to ensure industry could lead the Green Digital transition. The last six months have only accelerated that transformation. At a time when the Global Competitive landscape is fundamentally changing. We have to keep up, and this is why we will update our industry strategy in the first half of adaptear, and i doubt our competition framework which should keep pace. Members, all this will ensure europe gets back on its feet. Together,ed through we must also propel ourselves forward in the world of tomorrow. There is no urgent need for acceleration, no more urgent need for acceleration than when it comes to the future of our fragile and. Fragile planet. While much of the worlds activity froze during the lockdown, the planet continued to get dangerously hotter. We see it all around us, from houses evacuated due to the glacier collapse, to fires burning through oregon to crops destroyed in slovenia by severe drought. We also saw nature coming back into our lives. We longed for green spaces and clean air for our Mental Health and our physical wellbeing. We no change is needed, and we know is possible. The European Green deal is our blueprint to make that transformation. At the heart of it is our mission to become the first climate neutral continent in 2050. We will not get there with the state of hope, we need to go faster and do things better. We looked indepth in every sector to see how fast we could it in ahow to do responsible evidencebased way. Wide consultation and conducted an impacted assessment, and on this basis the European Commission is proposing to increase the 2030 targets for each Mission Emission for reduction to at least 55 . [applause] president von der leyen i recognize that this increase from 40 to 55 is too much for some, and not enough for others. Our Impact Assessment clearly shows our economy and industry can manage this, and they want it. Just yesterday 170 Business Leaders and investors in some of the worlds Biggest Companies wrote to me, calling on europe 55 . T a target at least our Impact Assessment shows that meeting this target would put the European Union firmly on byck for climate neutrality 2050, and for meeting our Paris Agreement obligations. If others follow our lead, the world will be able to keep warming below 1. 5 degrees celsius. Im fully aware many of our partners are far away from that, but we have to lead. I will come back to the mechanism later, but first, the 2030 target is ambitious, achievable, and an official for europe. We can do it. We have shown that we can do it. Dropped 29 ons since 1990, our economy grew more than 60 . The difference is now that we have the technology, we have way more expertise, and we have the investment. We are already embarking toward an economy with Carbon Neutral production, we want to lead the world in the. We have more young people pushing for change. We have more proof that what is good for the climate is good for business and is good for us all. We have a solemn promise to leave no one behind in this transformation. Without this transition fund, we will support the regions that have a bigger and more costly change to make. We have it all, now it is our responsibility to implement it and make it happen. I invite you for this endeavor because we can only do it together. This is our mission on the european level, honorable members. Meeting this new target anna that is ursula von der brussels, whatin we have seen and what needs to be done. Also giving us s around green initiatives giving us new lines around green initiatives. The green deal is a blueprint, they want to make europe climate neutral by 2050. The status quo will not get us there, so she is suggesting a new target, moving from 40 to 55 . Lets get to maria tadeo in brussels. She is following the buildup to this speech. Interesting to see ursula von der leyen giving us these new targets. It will matter to anybody who lives in the eu, but also suggesting europe can go other than other countries, acknowledging that this puts the European Union out of tilt with the rest of the world. Maria yes, and she confirmed what we knew, 55 reduction by 2030, an increase from the current target. She is also sending a clear warning to the European Industry, there are no maybes here, we have to tackle this climate crisis. What is good for the environment has to be good for business. Aimed atexplicit line European Companies and Industry Sectors that may worry that these targets may be detrimental to their business activity, detrimental to their operations. She is sending a clear message that the two need to be together going forward. We will also hear repeatedly from ursula von der leyen is the idea of implementation. It is great to come up with big targets and an ambitious agenda, but it needs to be put in practice quickly. Officials praising us yesterday tell us this is not just politics, a green agenda works for voters, but because we believe if you get the legislation quickly and get there first, you will be a winner in the future of tomorrow. Matt maria tadeo, thank you very much. Talking to us about ursula von cut co2ns proposal to emissions by 55 in 2030 from a 40 . Ine of 1990 up from in order to do that, the eu commission, ursula von der leyen says, plans to sell 25 billion euros in green ama seery,now is analyst, esg, janus henderson. Has the market then expecting something of this magnitude . Say it has come as a bit of a surprise to the market because yes, there have been rumblings regarding green bonds, but this is a step in the right direction. Lcome it. Wile what do you make of the new target, moving the target around co2 emissions from 40 to 55 , pushing that target, making it tougher to achieve. How does it fit with the paris climate goals and an Investment Strategy . Ama we run an Investment Strategy in line with the scenario, and they are pushing for 51. 5, so that i welcome everything she said regarding moving toward, i would like to have seen commitments toward 1. 5 degrees scenario. Matt how difficult will this be socially . Is about the environment, and we had yesterday a report that 700,000 jobs in the u. K. Were lost due to the coronavirus. , youhat to the job losses must have to see in a greener transition as the old Economy Companies collapse, how difficult will it be for the people of europe to handle . Certainly we have talked about a Just Transition were we continue to do things the way we have been doing in the past that is not working. Allowo retain jobs and people to continue to have dignity of work as described in the speech. I would question whether there needs to be job losses. What will probably happen is there are job creations in some of the new sectors associated with a green transition. Anna thank you for joining us, ama seery, analyst, esg, janus henderson. Thank you for staying with us as we listen to ursula von der leyen speaking, and giving us are instant reaction. To reiterate, a couple of lines coming through, renewed targets for europe when it comes to co2 emissions, and new numbers for the markets in terms of the green bond sales, they plan to sell 225 billion euros in green bonds. Matt it will be adjusting to see when that sale comes through, what the bids are like, who takes the majority. The ecb will likely play a huge part. Investors are hungry for this, as has been shown in green bond sales here in germany as well. Bondsllion euros in green to come from the European Union upursula von der leyen draws a new green deal for europe. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Francine fed day, stocks steady as we await clarity from jay powell. Ray dalio says fiscal and monetary injection has put the dollar under threat. J. P. Morgan has sent traders home after positive covid test, the railing plans to restaff. Jamie dimon says working from home will cost lasting damages. Facebook versus the ftc, a possible antitrust lawsuit against the social network. Kim kardashian urges or 188 million