Transcripts For BLOOMBERG Bloomberg Markets Americas 20240712

Constitutionally. Barrett is expected to cast herself as a judge committed to keeping her personal views out of rulings. Shecrats are concerned that will rule against abortion rights if she is confirmed as expected. Pope francis met with a cardinal accused of child sex abuse in australia. He became the most senior catholic official to be convicted of child sex abuse. In prison13 months before australians high court acquitted him in april 2020 of charges involving two choirboys in the late 1990s. Global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie it is 1 00 p. M. In new york. Im vonnie quinn. Welcome to bloomberg markets. Here are the top stories we are following. U. S. Equities start the week in rally mode. The s p up nearly 2 now. Hooper with christina about all of this optimism. Thats study showing proportions of americans dying from coronavirus is the highest in the developed world. The news coming as resurgence of covid across europe and parts of the u. S. Also catch the eye. We get an update from Morgan Stanley on the race for a vaccine. We dig into how emerging markets are supporting their economies during this global recession. Ofs take a quick check those markets. The s p 500 up almost 2 . New leadership and potential earnings from new models helping to boost sentiment. Up 2. 7 percent. We are looking at the Big Tech Companies like facebook and amazon once again. Crude oil is below 40 a barrel. From theina come back holiday and the pboc made a bit of a move. Want the you thirdquarter earnings season is kicking off in the u. S. This. Eek in the background is the potential for stimulus. Lets bring in christina hooper. Up until this week it would have seemed like stimulus should be the most important market driver. Like withs seem everything in such a stalemate now perhaps earnings will just take over. Its great to be with you and i think you are right that at least partially driving markets Going Forward will be optimism about earnings. Companies have been very good at managing expectations throughout this crisis and i dont see any reason why that will change. Seeing more positive sentiment emerging about the potential for a very significant fiscal stimulus package in 2021. Markets can wait that long but im not sure the economy can. Vonnie that brings me to why is the market so optimistic. Its neither the democrats nor President Trump right now that we are waiting on, its Mitch Mcconnell who has other priorities. Yes. Keep in mind Mitch Mcconnell is still part of the Republican Party and President Trump is very interested in seeing some kind of fiscal stimulus package get done. So the hope is that Mitch Mcconnell at some point will agree to at least a portion of the stimulus that the president is talking about. The most recent numbers he gave for 1. 8 trillion or more. Vonnie closer definitely to what democrats had been looking for. Given that this strategy seems to be working for democrats, would you imagine democrats would agree to stimulus or will they just move the goal post until election day . Im not sure democrats can avoid passing another fiscal stimulus package if we can get Mitch Mcconnell and the trump on board. And i do believe that nancy pelosi was negotiating in good faith with Steven Mnuchin. So it suggests that there is the potential for a stimulus package. 40 uld assign at a 30 to probability that we do see some kind of fiscal stimulus package before the election. Vonnie why is the s p 500 close the nasdaq up 3. 25 . There are so many peripheral things we can mention. Muchd there be that optimism about this economy and this market . I think part of it is just that the polls seem to be widening. One of the biggest fears from markets has been the idea of a contested election. The fact that polls are widening suggests that there might be a more decisive victory on election night. We could avoid a contested election. Certainly thats part of it. The bigger issue of course is there is aat if democratic sweep, then we will see a large stimulus package in 2021. Would thatt including as well as the idea of the fed action we have seen . What does it all mean for future inflation . Thats a great question and a hard one to answer today. We have seen really no impact on inflation. That might change depending on how much of fiscal stimulus there is in the system. Weve already got a significant amount of fiscal stimulus and it hasnt moved the needle on inflation. At this point more signs point to inflation remaining in its current range as opposed to anything like runaway inflation. Point something has to give. Either the economy gives and the market follows or the economy doesnt give and we get all of the jobs back and everything was for nothing and we get over the pandemic and things are as rosy as they might ever have been. That second scenario does not seem very logical to me. Why wouldnt you be slightly worried about inflation down the road . We have bigger things to worry about. What we have to worry about is the idea that economic damage that is shortterm in nature can become very permanent. If you were in an emergency room performing triage, youre going to stop the beforeg on someones leg you take care of their pinkeye. While inflation always should be a concern, its in the background. Its not an immediate issue. What is an immediate issue is the hemorrhaging going on in this economy. State and local governments under pressure. There are so many areas that need fiscal stimulus. I know thats why we are hearing so much from jay powell and Business Leaders about the need for more stimulus. There is at if contested president ial election that looks likely to go either way . Does that impact shortterm investors or longterm investors . Can longterm investors ignore a contested election or do they also have to make changes and adjustments . Longterm investors can choose to ignore this. Keep in mind we have a Monetary Policy backdrop that is very accommodative. In the short run we could see very significant volatility if there is a contested election. Most likely all of that chaos and uncertainty would end by inauguration. In time for longterm investors. What do you imagined jay powell will do at the next meeting if there is no stimulus . I believe that chair powell will again stressed the need for stimulus. He will certainly pound the table about it and urge that there be more. But also will think about how the fed can support the economy recognizing that it is a blunt instrument and that the heavy lifting needs to be done on the fiscal side. Vonnie thank you, christina hooper. More on the market value next. From new york, this is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Equity traders are busy hitting the buy button. Kailey leinz is here with more. Forget any kind of stalemate when it comes to risks surrounding the individual president ial election. Time now 5 over that above the 3500 level getting closer and closer to those alltime highs. Part of this may be looking ahead to earnings season which kicks off in earnest tomorrow. What is leaving the market higher today is mega cab technology. Take a look at the biggest point contributors to the nasdaq today. Largely the usual suspects. 5g launch anticipated tomorrow. Historically has wrought a revenue boost to amazons investors. What is lagging is energy and largely that has to do with todays declines in oil. We can see wti has fallen below that 40 a barrel level. Volume was the highest in over a month. That drop has caused wti crude to breach its moving averages. Today weighing on crude has been weighing on the energy space for the entire duration of this year. That is the supply and demand that has weighed on energy all across the industry. Down. D refineries are all energy far and away the worst performer in the s p 500 this year. Look intomprehensive equity markets. Thank you. The for a look at some of biggest Business News right now. Airbnbs secondquarter revenue fell 22 . Operating expenses dropped by 38 . Willones reporting airbnb report process in the third quarter. Of theopean Union European union has come up with a hit list of Tech Companies that could face tough new rules including facebook, amazon, apple and google. The companies would have to share data with rivals and be more transparent on how they gather information. A coalition of Technology Companies stepping up efforts to fight cyberattacks just weeks before the election. The coordinated takedown spearheaded microsoft is using a federal court order to dismantle one of the worlds most dangerous botnets. Thats your latest Bloomberg Business flash update. Still ahead, we will have a deep dive into the latest coronavirus data with matthew harrison, Morgan Stanleys head of your Tech Industry research. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. The push to develop coronavirus vaccines continues around the globe as cases see a resurgence. Joining us for the latest is matthew harrison. Your team covers all sorts of things like epidemiological variables and so on. Talk to us about our rates across the United States and what that actually means. Are is starting to rise again. In our review of the data, r above 1. 1 indicates a more sustained spike in new cases. We are hovering just below that at 1. 07. About two weeks ago we were below one but we slowly crept north of one recently. Outbreakow has the changed in nature . We are seeing clusters in small areas. That is affecting the overall data and it might be less dangerous in the United States. I think you are right in the sense that this scope is different in terms of its geographical presence. I guess my underlying view would be as long as there is high rates of Community Spread which is what we see, that still leaves the majority of the country vulnerable and if you were to see cases rise and Community Spread increase even further, he would probably see more concentrated areas of spread again. Vonnie your note showed epidemic doubling time of 120 days versus 110 but some elements of the data look better and some look worse. What should we be looking at in order to give us the correct picture . Its a good question. Be the variable that we are focused on most because that is most predictive of when you are going to start to see more significant spread and doubling time lags a little bit. Last week doubling time was higher. As we have moved through the daysnd it is now below 100 and i think you are starting to see doubling time catch up. Vonnie it moves so fast. 22 states are exhibiting new 13 times higher compared to the previous high june 1 which is months ago at this point. How does that happen . I think its an unfortunate part we have a significant ongoing spread and so it is something to be concerned about. Maps,re youve seen the the middle of the country where spread was originally quite low starting to see a resurgence especially on a per capita basis. Many of the dakotas and other states are seeing a real increase of cases. I think you are likely seeing the spread in areas which havent been significantly affected previously. Vonnie how do you account for florida . We are getting slim to know information about florida. You can see a lot of data on a county by county basis. Different levels of information can be helpful. You just have to sort of stay on thatnd track the data and makes a complete data somewhat difficult. Vonnie we are seven months into you looking at this data on a day by day week by week basis. How does it look now. If somebody gets sick, are there chances of survival better . We all saw the president get sick and be able to continue on his daily duties. Is that the same for the regular person on the street . Is it less dangerous of the disease these days . I dont think its less dangerous. I think there are two variables which are important here. At first is we all look something called the case fatality rate which is the number of cases that are reported and the mortality rate. Ast number has trended down younger people who recover quicker and have less severe outcomes. That ours the fact testing numbers in the u. S. Have the up and that helps denominator in the number of cases. You can also look at the infection mortality rate. Fatality rate is not significantly different from the beginning of the pandemic. 9 where between. 7 to depending on how you calculated. What has changed is on the margin we have gotten better at treating more severe cases. Is weve gotten better at recognizing when cases thoseurns and bringing people into the hospital sooner so they can receive care sooner. The third piece is we are starting to see some drugs like the antibody treatment the president received start to have some initial data. I just want to caution that we have initial data on those antibody treatments and not conclusive data yet. There is more to learn. Vonnie absolutely. Regeneron is one of the companies in your universe, so is moderna. What new can you tell us . Terms of ain treatment ahead of vaccines, the antibody treatments are the most exciting right now. I hope that in the next couple months we will have conclusive patient subsets will benefit most from those treatments. Vaccines i think really are the path back to normal. Over the course of the next few months, our view is that especially in november we could get conclusive data from at least three vaccines and really understand where we are headed in terms of the vaccine effort. Vonnie do you travel on Public Transportation . You outdoor dine . We have some but young kids at home and i think we have been more careful than others. You for answering that. Coming up, it is a crucial week in the u. K. This is bloomberg. Im doug hirsch. You may already know that goodrx can help you save up to 80 on your prescriptions. Unfortunately, Many Americans cant get to a doctor right now. The good news is that for many health issues, you can see a doctor online. Its easy. Just go to goodrx. Com, and with a few clicks, youll be treated by a licensed medical professional, all from the comfort of your own home. Visits are confidential and affordable. Need a prescription . Your doctor can send it to your pharmacy or have it mailed to you. Get the healthcare you deserve at goodrx. Com. Mark im Mark Crumpton. The Republicancontrolled Senate is charging ahead on President Trumps pick to replace the Late Supreme Court Justice Ruth Bader ginsburg. The first of four days of hearings for the nomination of judge Amy Coney Barrett again today. Several lawmakers including Patrick Leahy appeared remotely because of the coronavirus pandemic. Its nono secret, coincidence that republicans are rushing to confirm judge barrett before the Supreme Court considers the latest republican led lawsuit overturn the Affordable Care act on november 10. The president has even promised that any judge he nominates will overturn the Affordable Care act. Mark Lindsey Graham pushed back against criticism. He said the senate has the constitutional duty to confirm judge barrett to the court. Americanstion of dying from the coronavirus is the highest in the developed world according to a study of global mortality rates that shows the United States Pandemic Response left citizens expose to the lethal disease. The study says 100,000 fewer americans would have died if the u. S. Had the same mortality rate as the netherlands. Leads the world in coronavirus deaths with nearly 215,000. French officials arent ruling out further lockdowns as Coronavirus Infections continue to spike. The country reported 43,000 new cases over the weekend. Cities are now under maximum virus alert. Government will review health data this wednesday and decide if further action is needed. France has been one of the European Countries hardest hit by the pandemic. Trade deal between the u. K. And the European Union is still hanging in the balance. Boris johnson called the leaders of germany and france. From minister johnson told them the eu would have to back down from its hardline position on the politically explosive issue of fisheries. Eu Officials Say they are confident he will not carry out his threat to walk away if there is no deal insight. In sight. Global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie im vonnie quinn. Welcome to bloomberg markets. Here are the top stories we are following. The eu trade deal hanging in the balance. Brexit talks resume after Boris Johnson held eu leaders they are going to have to back down from their hardline position on the issue of fisheries. We will discuss what to expect. Emergingmarket data. Of covid cluster and cases in india drop top 7 million. The Supreme Court confirmation hearings have gone. Members of the Supreme Court Judiciary Committee clash. We will bring you the latest from capitol hill. The s p tops 2 of a cane this monday morning. Really no stopping the s p or the nasdaq. More thanpple both up 6 . Lets not forget apple in spite of all the talks of regulation and congress cracking down on 6 . Tech, stock up amazon and facebook, twitter, they are up more than 5 . Is trading above 39 a barrel. We will be see speaking about later. N lets take a look at the latest regarding those brexit talks. Joining us now is bloombergs ian wishart from brussels. Merkel had some phone calls from Boris Johnson this weekend. Will they have heard anything that they would like to hear in terms of not just posturing but any kind of promises . I dont think they heard anything new. From Boris Johnsons point of wanted merkel and macron to give him something. The problem is merkel and macron wanted Something Back in return from johnson and i dont think either of those people have come away particularly happy. The brexit negotiations are really on a knife edge now. Both sides are waiting for the other to blink. No one seems prepared to do so. Nobody is particularly optimistic, i have to say. Vonnie fisheries is one of the issues. Forest johnson seems to be landing on that. Whats in it for europe to give up anything on fisheries . Is strange, isnt it. Such an important trade deal risks being torpedoed because of something so small. It goes back to the fact that when it was in the eu, the u. K. Had to give up a lot of the fish and its waters and the eu and particularly countries like france who have big fishing fleets want that to continue. The u. K. Doesnt want to give away as much fish as france wants to do. And it really looks like a deadlock. In and itdigging really could be something that crashes the whole thing. Its not the only point of contention but it is certainly a big one. Also subsidies the u. K. Would be allowed to hand out to businesses in the future. If the u. K. Gets what it wants now, it has the freedom to do whatever it wants from next year onwards. I imagine the eu is prepared to meet johnsons bluff and see it through. Are they . Yes. And you talk to officials negotiators on both sides, they all say we really want a deal. You ask them whether they are optimistic about that and they say not that optimistic at the moment, but we certainly think it could be done. How could it be done . Nobody seems to know. They are all calling each others bluff. Prepared to really concede on something that they hold dear to their hearts. So thats why at the end of the day everybody says maybe this will be no deal after all and thats what gets markets scared and people in brussels really frightened about whats going to happen. Vonnie 25 leaders will be meeting thursday. Toit possible that this goes december 31 at minute to midnight brussels time . Everybody says we cant go that late and it wasnt that long ago Boris Johnson want to deal in june. The eu wanted a deal before october. Here we are in october. They are not really that close to a deal. It could go right to the wire. Certainly we are talking november, december. You wouldnt rule it out. You ianbest of luck to wishart, thank you for joining us. Markets are handling the coronavirus. The director of emergingmarket debt. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. The imf and world bank expect the pandemic to add to economic inequality. Thatorld bank anticipated as many as 115 million could face extreme poverty this year as a result purely of covid19 with the number only rising into next year. We spoke with World Bank President avon malpass David Malpass. Up in the showing numbers and likely to get worse into 2021. One notable part of this global recession is the any polity of it. In 2008 there was a great financial panic. Stock marketss and their bond portfolios and so on. It didnt have as much effect on the developing world. Into is much deeper in the developing world and likely to deepen if there are further shutdowns in the advanced economies. Thenumbers show that recession has actually been somewhat less severe than the estimates in june. ,ut for the developing world the recession has been worse than what was expected in june excluding china. China is in a bit of a recovery phase. The other developing countries still in a worsening recession given what you are seeing play out right now, and there used to be a stigma being attached to this question but im not sure there is anymore. Whether the cure for this virus is worse for the disease given what you are seeing play out in poorer countries. Its hard for us to judge. History will look back and try to assess. For the poorest in the world, covid is a problem but a bigger problem for people is no jobs and increasingly this problem of food shortage and scarcity as their incomes go down. Theof the things that hit developing world so hard is remittances got dropped from workers across the border. They would be sending money back every month to their families and that got cut off rather suddenly. Another thing is just the activity level of the world for many countries is down 10 from what it was a year ago and that means Health Problems for children, they are out of school , they are not getting their vaccinations and in many cases malnutrition is on the steep rise. Lets talk about how youre looking to remedy a huge problem. Suspension isce something you have pushed forward. Can you walk me through how far out you would look to extend that initiative . We would like to see it extended another year. Its only providing shallow relief and we need to do much more. What this has done is said that the poorest countries should not in this crisis given the severity of the crisis starting last may 1, they were able to stop paying their debt service. That means principal and interest to official bilateral creditors. Really the richer countries plus china. And they could stop those payments and the commercial creditors were supposed to join that initiative as well. That means banks and hedge funds for example. Andrtunately they didnt even the Bilateral Official creditors didnt fully so the savings for these countries, youre talking about the poorest countries in the world. They are still paying their debts in some cases. That i think should be brought into. 2021. So extended through vonnie that was our exclusive interview with World Bank President David Malpass. Steps to also a cluster of new infections. Joining us to talk emerging markets debt. Lets begin with china. Slightly different case than just pure emerging markets. How has the appreciating currency and now that move by the pboc infected views of chinas debt . We were anticipating a much faster recovery the and that has helped emergingmarket assets significantly. The Chinese Market we think will be attractive to investors Going Forward. The currency has been very stable and there are measures Going Forward especially with a weaker dollar likely to make the Chinese Market more attractive. I do want to make a point east on the interview that came think my segment, i do there has been a lot of concern about emergingmarket assets and countries that have been highlighted which has been somewhat exaggerated in our opinion. The fact is there are much fewer hotspots in emerging markets right now. Actually beenas shorter than developed markets and that has led to a quicker recovery in emerging markets than many people feared earlier in the year. Think that the environment is picking up quite significantly for emergingmarket its based on lower rates in the foreseeable future and the possibility of a weaker dollar. The fact is that the primary factor is participating the private sector is participating and many of these countries now have access to markets and therefore they do not need to suspend debt. So low the bar was set for emerging markets. Debts of the the United States, 109,000 deaths. Thats one example. Does that make india more of a sure thing for Credit Investors or is it simply that we are not getting the same kind of information . Scaryia was looking quite. They have managed to stabilize their caveins and we do think they are turning the corner on covid. Unfortunately, india has some structural issues and that would ing over priceperformance emerging indian fixed income debt. We still dont think india is a candidate for a crisis. Vonnie David Malpass was making the case that private market creditors and hedge funds were not being so understanding as if that might be their duty. Are you finding that as you look around the world . Is there a case that some of these investors need to be a bit more patient . Initiative the g20 had very good intentions but unfortunately it created more confusion and created an obstacle for these countries. What they needed or financial conditions to normalize so they could access liquidity rather than push forward debt in the private sector. And a lot more complicated you have to deal with thousands of investors globally. Way to gete the best access to liquidity to poorer countries is to make sure they can gain access to markets. Unfortunately the confusion that was created because of the initiative really caused some countries do not be able to access the markets. Some of that confusion has been cleared up and now many of these countries have access to markets and therefore no need to suspend debts which could have caused longterm implications in these countries and impaired their future access to markets. Vonnie obviously places like lebanon have their own situations. We should concentrate on that another day separately. Turkey also has idiosyncratic problems. How is turkeys debt right now . View wenot of the do think its important to do your homework on the policymaking in many of these countries. Turkey is one of the where we think policy makes it more sustainable. And therefore in order to avoid , they have to change the policy. We havent seen signs of that so far. Vonnie definitely want to talk to you again soon on some other countries. Coming up, battle for the highest court. Senate lawmakers take up the nomination of judge Amy Coney Barrett. We will get the latest from capitol hill next. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Hearings for the Supreme Court nomination of judge Amy Coney Barrett underway in the Judiciary Committee. Republicans trying to cement a conservative majority in the court before next months election. We are joined by bloomberg congressional editor anna edgerton. We just heard Lindsey Graham introducing this whole thing. Lindsey graham himself, this week will be his campaign. Does it work for him on the margins . Is it detrimental to not be on the trail . This is a very interesting confirmation hearing. Have thom tillis in carolina. Lindsey graham facing his own surprisingly tight reelection race. Harrison justamie broke the record. Lindsey graham is trying to use these hearings to highlight exactly why he has become such a staunch ally of donald trump. For all of those voters hes trying to say even if you dont , think aboutrump what hes been able to do for conservatives. This is his third justice that he will have name to the Supreme Court. Vonnie we are going to get health care, abortion, those kinds of issues immediately. But there are lots of senators and theres going to be lots of questions. Potential for bombshells . Both sides pretty well telegraphed what they are going to focus on. Democrats are focusing on health care because theres going to be a case deciding the fate of obamacare before the court a week after the election. Confirming this justice to the Supreme Court could have serious implications for the health care of millions of americans and this is something republicans have long said they were trying to do and they were able to do it legislatively. Democrats are making the case they are trying to do it through the judiciary. Vonnie we have to leave it there. We will keep an eye out for your post on bloomberg. Com. Thanks to bloombergs and. From new york, this is bloomberg. Mark i am Mark Crumpton with bloombergs first word news. President trump returns to the campaign trail after declaring himself in great shape following his bout with coronavirus. Orlando,old a rally in florida, kicking off at least four Straight Days of political events. In addition to florida, mr. Trump is expected to travel to pennsylvania, iowa, and North Carolina this week. He is hoping resuming his signature rallies can reverse his sacking poll numbers. Both democrats and republicans are bulking balking at his latest offer. Nancy pelosi and Steven Mnuchin are expected to talk. But even if they reach a deal, theres almost no chance congress will pass it before the election. Boris johnson is imposing new restrictions on the u. K. To control the surge of covid19. His plan includes closing bars and pubs in parts of the country where the outbreak is spreading fastest. The prime minister