Election delay. Another wave, the u. K. In france report record daily virus cases. Good morning. Session volatile yesterday on wall street. Action, s p 500 futures are in the green. Flat on the year on the index. Alongside 50 up 0. 5 asian equities. Dollar index had a firm week, little change this morning, but we are up or the 1 , biggest weekly gain since april for the dollar. Nymex crude getting a lift, 40 a barrel. U. S. Equities, a volatile session fluctuated yesterday erasing this years gains briefly. The jobs data disappointed on top of stimulus talks. Dani burger is digging into it for us. Dani anyone trading yesterday is suffering from whiplash. We did get the s p 500 erasing yeartodate gains, and today it 0. 5 , unclear whether we will get that are not. We had converging forces between hopes for forces, poor jobs numbers, and new housing data that was optimistic. Thing that might comfort about what we saw yesterday, we are getting close to a correction. We need to drop 0. 8 on the s p 500 to see a 10 decline. The blue line is that equal weighted version, not leading the decline. That is a reprieve for Value Investors who saw weaker stocks selloff. This time it is the big tech down. Weighing the index not everything is bright and sunny to bet on the u. S. Economy, small caps have reached the 200 day moving average. 100 falling below this line. That means the index is falling below its 200 day moving average. Tax indexes, and hasfact the small cap breached that level shows concern over the u. S. Economy. Annmarie those concerns are starting to meant. Dani burger, thank you so much. U. S. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin are ready to resume stimulus talks. House democrats are drafting a 2. 4 trillion proposal, while the president says he is willing to go as high as 1. 5 trillion. Fed officials are divided on the need for further fiscal support. About 11 million jobs have returned, but there is a deep hole. We could start to approach an Unemployment Rate below 4 . It is likely more fiscal support will be needed. Additional fiscal support will likely be needed. I think Small Businesses would benefit from more support. A lot will depend on how we manage the virus, fiscal policy and a range of other decisions. I do not think there is as much of an imperative for a new fiscal package as there might have been in july. Annmarie those were the fed speakers yesterday. A number of them pointing to fiscal support. A bit divided. Joining us now is timur igorevich maksimov, deputy minister of finance, Russian National wealth fund. Good morning to you. Powell points the finger to Fiscal Relief for a third day in a row. Nancy pelosi, Steve Mnuchin are expecting to go back to the table. Some say it is not possible before the election. Are you a buyer of this fiscal optimism . Timur no, we think it is getting harder to see where there is room for negotiation. We are looking at the backdrop of the replacement of ruth bader ginsburg, it could be contentious and make it harder for republicans and democrats to get to a deal and be seen to be cooperating in contentious times. The Fiscal Relief we believe is necessary for the lower income is aet where unemployment real thing, and way higher than where it was before the crisis. Unfortunately we dont share the optimism that was priced in yesterday. Annmarie you brought up the election, and with the vacancy at the Supreme Court, goldman with a note saying markets are overestimated the risk that we will not know the Election Results on the evening of november 3. Do you think the markets are overestimating that risk. Wouter that is a difficult question to answer. When it comes to the election outcome on those few days where there might be contention about mail in ballots, that is an open question we are trying to wrap our heads around. We think the institutions managing the election are strong, so like goldman, we are optimistic. It is a different situation with so many more male in ballots. That is something we are watching closely. And how negative it could be for financial markets, because biden is perceived to be more labor friendly. That would play to our clients to not worry too much, bidens plans are not negative for capital markets. Annmarie we hear a lot of rhetoric leading up to any election. You are overweight highyield voucher, but highyield is down on the year. We see a lot of outflows. Our highyield out point is largely funded by u. S. Equities underweight. We have taken that position consciously because we like to relative toxposure equities. That is still working for us. We are looking at a tradeoff between fundamentals and how they are developing with the u. S. Closely stalling out, and how are the support measures working out and working through the highyield universe. We see a little pushback in that space. People looking at the fundamentals, that makes sense to us. But we do think the support is there which will provide for those markets. You are not optimistic on a fiscal deal. You want to remain in highyield. Are you not worried about bankruptcies . Sides tohere are two that equation. We are worried about stalling out. The fundamentals are not great in the u. S. We need action and we are not getting it. At the same time we think highyield is a better place to take on u. S. Risk than u. S. Equities. We made that decision in that space. Looking at the bankruptcy part it has reallyn, alleviated bankruptcy pressures for now. At some point, if the economy does not come back where it was of the start of the year, that support will not be enough to prevent some bankruptcies from happening. For now we think the tradeoff is about right. Wouter sturkenboom, chief investment strategist of emea apac, Northern TrustAsset Management stay with us. We are seeing a pandemic resurgence in europe. Record infections yesterday in the United Kingdom and france. Details next. This is bloomberg. I know people are anxious, afraid, exhausted at the prospect of further restrictions on our economic and social freedom. For at least the next six months the virus and restrictions are going to be part of our lives. Cannot save every business, i cannot save every job. The government will directly support the wages of people in work, giving businesses the option of keeping employees in a job on shorter hours rather than making them redundant. Are policies we have never tried in this country before. We have so often spoken about the virus in terms of lives lost. The price our country is paying is wider than that. Annmarie good morning. U. K. Chancellor rishi sunak speaking yesterday. Gone is the furlough program, and in its place a plan to subsidize wages for the next six months. Worries are mounting in london and across europe as another wave of the pandemic. The u. K. And france recorded record daily infections yesterday. Joining us is maria tadeo from brussels. Give us the state of play. Maria i would argue this is a reminder that the virus is very much in circulation. In europe a Record Number of cases over the last 24 hours. In france, 16,000 people tested positive. ,e have data from germany recording the highest number of cases since april 24. You could argue this is happening because we are testing more people than at the start of the pandemic. If you look at data from hospitals, people who need medical assistance, that has been jumping over the past few weeks. The trend is there. The question this morning, what does it mean for the economy and future lockdowns . In europe, there has been a pullback from the idea that we could go back. There are major restrictions in some cases when it comes to the service industry. The Restaurant Industry not being able to do normal working hours is reflected in some of the soft data. The survey that came out yesterday, the question is will it lead to a National Lockdown . Yesterday night the french Prime Minister was saying they believe Restrictions Mean no National Lockdowns. Annmarie thank you very much. We should mention germany has recorded over 2000 new virus cases, the most since the end of april. Nothing like in the u. K. And france, but you can see the upward trend. Wouter sturkenboom, chief investment strategist of emea apac, Northern TrustAsset Management is still with us. Youre up to the downside as we approach the winter months. With brexit, two headwinds. Is this data foreshadowing that pain . Wouter is giving us a reason to be cautious. We are saying what we call a second wave or resurgence, and the cases creep up. Shows ith care system is contained so we think lockdowns are off the table because there is recognition of the economic pain of doing a new lockdown, it would be severe. We are seeing how hard it is to claw our way out of this. Lockdowns for investors are off the table. But death rates are creeping up, so that will be something we will be watching closely. We thank the recovery is still there, but being challenged for sure. Annmarie a lot of people are hopeful that from the first wave, the hospitals have learned a lot and were able to deal with hospitalizations. , can it deal with it . European stocks capitulate on these fears. Is now the time to double down on defense of plays . Wouter that is something we hear our clients talk about. There is a worry that the recovery will not reach expectations. We share some of those worries, but we are more focused on the u. S. Because europe is continuing with the stimulus, and the ecb as well is providing incremental support, we saw the almost 200 billion flowing into the market. We think europe is doing better managing the situation than other parts of the world. That is why we remain neutral on european equities. We do understand people are worried about this and might want to take off a little risk. Annmarie this was a huge debate for months. Europe will recover faster. Lately some people say they will shift more into the United States. You are still bullish on europe versus the u. S. . Wouter we have a small tilt in favor of europe. The challenges on the currency side. We saw europe do really well with a powder outlook with a better outlook. Now that the euro is backing off, we think there is more air in that trade. It is how we manage this new wave of virus cases. Our restrictions being put in place enough to manage the situation without going into lockdown . That is something we will be watching closely over the next few weeks. Annmarie you bring up a good point. We were in the 120s. Worried about the euro strength this morning. Wouter sturkenboom, chief investment strategist of emea apac, Northern TrustAsset Management stays with us. Lets get your first word news with laura wright. Laura a judge order the u. S. To postpone its ban on tiktok. It is seeking an injunction to temporarily block the ban, and continues to pursue a deal with oracle. The ban was set to take place sunday. New yorks Governor Andrew Cuomo says he does not trust the Trump Administration over a vaccine. An independent review of anything authorized by the federal government. New york may require travelers from europe to abide by its 14 day quarantine rule. Kentuckys governor is urging the state attorney general to release information about the Fatal Shooting of breonna taylor. It comes after a grand jury chose not to file any charges against the police officers. That decision sparked protests, including the shooting of two police officers. One has been released, the other in stable condition. The Federal Reserve is seeing the focus of joe bidens search for a treasury secretary. The provocative option of Elizabeth Warren has not been ruled out, but far less likely. Universallyould be accepted by wall street. Warren has said she would be more interested in being fed chair. Global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Bloomberg. Annmarie laura wright in londo n. Russia hopes for a euro debt sale despite rising volatility. We have exclusive conversation with the deputy finance minister. This is bloomberg. Honestly, i think everybody expects volatility in the Fourth Quarter of this year, given the worlds geopolitical situation, the upcoming u. S. Elections, and the situation with covid19. These sectors are going to play some role in the overall volatility in the market. We are very comfortable. What we see gives us confidence we will be able to accomplish our plans. About 70 of our investors base our local banks. We do not expect any deterioration to their financial spending and their ability and willingness to take on more sovereign risk. We understand some foreign investors, and about 30 of our portfolio is in the hands of foreign investors. Frightenedget a bit by what is happening in the world, but we expect significant demand from local banks, and they will allow us to fulfill our plans. You mentioned nonresidents. Do you think that share can go down before u. S. Election . The share of nonresidents is around 29 at this point. It used to be 35 . But since we are switching floaters,struments to and we see nonresidents are not ,een to take these instruments protection instruments, and what they seek in russia is the return on their investments. From banks seek protection Interest Rate changes in the future. The share ofexpect nonresidents to go down as we increase the amount of floaters that we offer to the market. Annmarie that was timur igorevich maksimov, deputy minister of finance, Russian National wealth fund speaking exclusively to bloomberg about the impact of volatility on their bond sale. Sticking with ems, time for your morning call with juliette saly. It is time to maybe rotate out of europe and look toward ems . Juliette that is according to poll, citingatest a number of reasons. They are seeing ripples in Economic Activity in europe, they are saying we should rotate thisurope and back is looking at their surprise gauge. They are seeing disappointment in europe. There is a pickup in virus cases. And Earnings Growth is amongst the highest in the world, that is declining. Trimegists say you should develop market risks, but the economic supply index turned a little higher in e. M. , and weakness in the dollar to support the emerging index as well. Annmarie juliette saly, your morning call from sidney. Still with us, wouter sturkenboom, chief investment strategist of emea apac, Northern TrustAsset Management. You have that tilt toward europe. Is it maybe time to move out of europe, dump the u. S. And go heavy on e. M. . Wouter that is not a trade on top of mind for us. We have more top of mind out of the u. S. Into e. M. , that is a trade we are taking more seriously because of the valuation differentials and the dollar trend mentioned earlier. Europe is more closely associated with a cycle like e. M. , therefore we think there is more to be gained from a u. S. Versus e. M. Trade. Annmarie thank you for joining us, wouter sturkenboom. He said he is not a buyer of stimulus optimism. That will be a big discussion on capitol hill this weekend. He is chief investment strategist of emea apac, Northern TrustAsset Management. Be fiscal will there aid, but the proposals are still far apart. 900 billion to be exact. Stimulus. Lk u. S. Volatile session yesterday on wall street. The s p 500 is flat on the year. Futures in the green acrosstheboard. Msci asia a little positive, but not much going on this friday morning. Stay with us. This is bloomberg. Annmarie from bloombergs european headquarters, this is daybreak europe. A trillion dollars apart. U. S. Democrats stressing new 2. 4 trillion stimulus bill. Mnuchin says he is ready to talk. Stocks climb after a volatile session. The gop pushes back on trump threats to defy the Election Results. Markets are overestimating the result of a possible the possibility of a result delay. The french chancellor warns of an employment tragedy despite extra support. Good friday morning. Lets take a look at were betrayed this morning. Are in the green this morning. Bloomberg dollar index is higher this morning sorry, lower this morning but higher on the week, the biggest weekly gain since april. Nymex crude pushing 40 a barrel. 0. 67 . Asury yield at nancy pelosi and Steven Mnuchin say they are ready to resume stimulus talks. House democrats are drafting a 2. 4 trillion proposal. Donald trump had indicated he would only be willing to go as high as 1. 5 trillion. Derek, i dont know where to start with this. How likely is it that we will see a deal . I feel like i am having deja vu. We have been down this road so many times. Derek you reach into your pocket and i reach into mine and maybe we can come together. What you are seeing right now is people trying to figure out whether or not there is a deal to be made. We are seeing a lot of pressure from a lot of disparate groups that have been hammered by the virus and contained a lot of people within them. We are talking about airlines, restaurants, some of these things that are really people intensive businesses. It is not some algorithmicbased be afund that might billiondollar revenue thing with 25 people. These things are massive and they are geographically distributed. Everyone is kind of looking at this and saying on an economic side, but way, this is a lot of people for whom a lot of assistance expires or dwindles soon, but they are also looking at this, lets be honest, a month and a half before an election that is pivotal. It is still kind of up in the air. There is a lot of incentive for people to come to a deal. The problem is there is a really tight time window and a lot of other things are going on in washington, most notably that Supreme Court fight. Annmarie i like that you brought up the airlines. October 1, when restrictions expire from a prior round of federal assistance. There could be more pain in the airlines industry, which we have seen globally battered by the pandemic. There have been a flurry of poles ahead of next weeks debate. One showed it very tight. Two states and play. Which one are you looking at . Derek here is how i want viewers to encourage want to encourage viewers to look at this. You have a big gap between national and state polls. National polls show joe biden ath a lead, but this is statebystate election, and a lot of that gap is people in california and new york who hate donald trump. Those states are already voting democrat anyway. Ofve got to watch some these swing states. Youve got the upper midwest wisconsin, minnesota, the greatest state in the nation of michigan, a little bit of pennsylvania as well. Those will swing it similarly to each other. And weve got sunbelt states, florida, north carolina, texas, even, arizona. Those are going to move differently. They are not going to move together, but watch how they move in those bands. Right now, if you move two points in either direction, that is the difference between donald trump sneaking one out in a joe biden landslide. Annmarie derek wallbank, thank you for joining us, Senior Editor out of singapore. But he spent his entire career as a d. C. Insider. Election coverage continues on bloomberg television. Tune in for our coverage of the first president ial debate next wednesday. It is going to be key to hear what donald trump and joe biden have to say. Goldman sachs markets are overestimating the risk of an election result delay. They say it seems fairly likely the market will be able to gauge the likely winner, even if the associated praise does the Associated Press does not call the race. Joining us is our guest from thread needle investments. It is getting very pricey for the risk. What they are seeing is the money might not be worth it. We are going to have an election result. Do you agree . I certainly believe that we are going to have an election result, and it is a matter of timing. We know who the president is at the end of election night, but there was nothing in the constitution that says you have to know who the president of the United States is on election night. There is a welldefined process for getting there. In 2000, it took about 24 days to get there, but the world went on. It certainly did. What assets do you think might fare the worst following the election, or the best . How do you want to set up your portfolio . Nicolas for us, we are not approaching it from a topdown perspective in terms of, this group of companies will be the best in this group will be the worst. We are thinking of it from a bottom up perspective. From a sector perspective, i think there are places the market will go depending on who the winner is. In the healthcare space, we know that, given Vice President bidens support of the Affordable Care act, that is, generally speaking, biden would be quite positive for health care, specifically the hospitals that manage care, as an example. With president trump, the playbook says to go into places where regulation is going to be an issue. That would imply financials. Generally speaking, the Market Defense companies when a republican is in office. Annmarie as you know as well, the dems working on this 2. 4 trillion stimulus deal. We could see movement over the weekend. At least in talks. It looks like the wheels are starting to turn, possibly, that they at least want to come back to the table, even though they are a trillion dollars apart. What would a failure to strike a deal mean for the markets at this point . Nicolas not having a deal at this point i think is problematic from the perspective of a consumer economy. Through the summer, we have seen a steady uptick of earnings expectations for consumeroriented companies, given that Consumer Spending has held up better than what was feared as we got into this. A large part of that has been on account of the generous stimulus packages from the government, and that is now set to expire. From a market perspective, i think the place where you are most likely to see issues would be in these consumerfacing businesses. By and large, these are generally low margin, peopleintensive businesses, so sectors like recreation, like retail, who are directly exposed to the consumer, and all are already low are margin businesses that probably will fare the worst. Annmarie what about bankruptcies . Are you worried about that, no fiscal deal, how much the fed could do to where we see another parade of bankruptcies out of the state . Nicolas the right now, if we are talking about bankruptcies, i would say that is concentrated into places. It would be the consumers we just talked about, because we do see a fair degree of leverage, a cohort that is most impacted by not getting more stimulus. I think you probably will see a way for bankruptcies with small and medium enterprises. Bankruptcies with small and medium enterprises. But we have seen that fixed income markets, specifically the bond market, has been open. Companies across the spectrum have been able to erase that and fortify their Balance Sheets as we got through the swing of the summer. Majoreen onyx back to see Balance Sheet stress from the perspective of publicly traded i would not expect to see major Balance Sheets stress from the perspective of publicly traded equities, but i think you will see severe repercussions from the consumer economy. Annmarie certainly. And a lot of people warning about what that means for Consumer Spending. Thank you for joining us, Nicolas Janvier at columbia threadneedle investments. Happy friday. Interviewur exclusive with him. This is bloomberg. Annmarie 6 42 in the city of london. Im annmarie hordern. The outlook for airlines looks increasingly grim, with new restrictions dashing hopes for recovery. We spoke exclusively with klm ceo pieter elbers. He says that state aid airlines state aid to airlines is not charity. Pieter when all the carriers have worked within the framework of the european regulations, things will get back to a more aable situation where comparison can be made and will be made to ensure that level playing field. The nature ofk European Aviation has changed as a result of this . Analyststo a number of that talked about airlines become utilities, that they serve the national interest, the same way you could argue emirates does in the uae. Do you think the nature of the way airlines fit into society has changed as a result of it . Because europe needs airlines. These are critical infrastructure. Also, europe is making a big stability push at the moment, and aviation is going to play a big part of that. With governments financing the aviation sector in such a big way, i wonder if that changes the relationship. Pieter yeah, i would not say airlines will become utilities. Surei can try to, and for that is the case here in the netherlands, is the enormous Impact Airlines are having on some european economies, especially for a country like the netherlands, where the network of klm klm is the second largest employer of the country private employer of the country. 180 destinations operated directly from amsterdam are making sure that the business can work abroad and International Business can come here. The same situation with air france or lufthansa. Theeconomic spinoff for country is enormous, and that is why governments are trying to charityward not out of it is a vital and critical part of the infrastructure to make sure that even with recovery after covid, because it is obvious that many of the economies need to recover and need time to recover, even more so, networks, and especially networks with a large, local part, will be very crucial to the recovery. Therefore this report is being given. There is also some differentiation between the low in thetwork carriers Economic Development of these countries. Was pieterhat elbers, klms ceo. Klm has cut back on capacity plans in the wintertime table after a bad year for airlines. You can see that in the year today price share, down 70 yeartodate. Stay tuned for more from the aviation festival. Guy johnson speaks with lufthansas ceo. This comes as they are lines as this week it will offer rapid test kits. Low oil prices usually but help airlines, but not when people are stuck at home. Just a week after revealing its plans to turn itself into a utility giant, bp share prices dropped to a 25 euro. 25 year low. Investors are unimpressed. For more, our executive editor for energy and commodities joins us now. Will, they look unimpressed. 45 years, brent was trading what, at the high teens at that level . Are they saying they cannot turn this around, they cannot become an oil giant to a renewable giant. Renewable giant . Will i think it is safe to say there is a lot of skepticism. They have used a lot of capital to build very fast a renewables business. Claims hek the ceo can make returns of a percent to 10 on renewable projects. There is a lot of skepticism on that because it is higher than Traditional Developers in energy making him a but it is probably not as much in terms of a traditional big oil or gas project around the world. I think that has led to a degree of skepticism on the part of the investors about the future being sketched out. That being said, i think it comes amid investor skepticism about the whole oil and gas sector. It is really unloved right now. Yesterday, at exxon the dividend was pushed to 10 , which would be unimaginable a few years ago. The thing about bps it has already cut its dividend, but yet investors keep trying to shut it down. Annmarie the sacrosanct dividend for all the majors had to be cut this year, and that is why investors want to hold onto these unloved companies. Seeing, will, we are this divergence between u. S. Oil companies and those in europe. At least europe is starting to kind of turn the corner with the energy transition. Do you think that is the right move . The u. S. Oil companies chevron, exxon making a bad choice here . Annmarie i am sure, but he doesnt have any choice but to steer bp in the policy direction. We see huge changes in policy every day. This week, we saw president xi commit to making china Carbon Neutral in 2060. That is four decades away, but it is still a huge statement of intent. And in the u. S. On the california has said it is going to ban sales of internal Combustion Engine cars by 2035. If that happens, that is an enormous shift in the shape of the energy economy, and eventually every oil maker is going to have to respond. Annmarie eventually the oil makers will have to catch up with what is going on in the policy space. A lot of that could also change november 3. Will, thank you so much. Pledges to bei antiracist and spend 1 million to close the racial wealth gap. This is bloomberg. There is a lot of terrific talent out there. It is not a pipeline problem. What we have not looked at his promotion parity. That is one of the big things we looked at, and we made a huge amount of progress at a much higher percentage of our africanamerican and black employees that have been promoted since this. Power leaders have done in terms of the diversity on their teams and the ability to make a difference in this respect is going to be an important element that we formally set is a part of emotion decisions and a factor in compensation at year end. You have to start younger. You have to build the mass at the base to try to get leaders five or 10 years from now. They have already realized that they cant stay where they are, that they are going to have to move because society is pushing them to. This is an absolute business imperative. Annmarie that was a number of Business Leaders speaking out against the idea that there is a lack of black and ethnic minority talent for top roles. Speakers at the equity summit distanced themselves from the controversial comments made by the wells fargo ceo on hiring black talent. Spend 1 billion on efforts to close the racial wealth gap over the next three years, as the banking giant seeks to become an antiracist institution. The announcement comes alongside a report that the u. S. Has lost 16 trillion due to the racial cap. For more, dani burger has been digging into this. What are the steps citi is going to take . The 1 billion is going to go towards homer sugar homeownership for africanamericans and the other half is going to go to housing developers. Part is also going to procurement opportunities for black suppliers. This goes beyond this overall picture as well. Study thats own found this issue of what happens due to the economy in the economy due to discrimination. If you were to a lemonade all discrimination today, citi found gdp would be boosted by 5 trillion, so these are not insignificant differences we are talking about. To beoes it mean for citi an antiracist institution . Biascludes getting rid of in software towards white men. Sure theywant to make have minorities and black workers on their accounts, and they are also going to be investing in more minority owned banks. The outgoing ceo says this is a moment to stand up and be counted, and citi is committed to leading the way. Annmarie thanks, dani burger. You and i will both be tracking citis plans and seeing if they actually get to their goals. Lets take a look at some of the key Stores Coming up today, and, of course, it is friday, so what to watch out for over the weekend u. S. And canada say sanctions on belarusian officials may come later today. And the trumpet penetration has been ordered by a district judge to postpone a u. S. Ban on tiktok the Trump Administration has been ordered by a district judge to postpone a u. S. Ban on tiktok. And on saturday, really important, the president lanes to announce plans to announce the replacement of the late Justice Ruth Bader ginsburg on the Supreme Court. 5 30 p. M. Gc time. D. C. Time. Thats it for bloomberg daybreak europe. Next, anna and matt take you to the european open. Futures in the green and asian equities to the upside, but looking relatively like not quite as exciting of a day today as it has been the rest of the week. This is bloomberg. Welcome to Bloomberg Markets the european open. Matt today the market say stay positive. Is an hour away. These are your top headlines from the berlin bird terminal bloomberg terminal. The next