On englands toughest lockdown level. Stocks higher on signs of a stimulus bill before the u. S. Possible. S still nancy pelosi tells bloomberg an agreement is urgently needed, by the white house warns there is still a ways to go. Shill. Etflix shares they miss estimates for subscribers. The forecast suggests the pandemic boom is starting to fade. You can see how the shares have fallen 6 . We are under one hour away from the start of cash trading in europe. Lets take a look at what futures are indicating this morning. Kind of a mixed picture and not a lot of size, no direction or size. Ftse futures are down 0. 10 . 0. 10 . Ures are up take a look at what u. S. Futures this morning after the netflix , ahead of thee tesla results, you can see gains here. 0. 5 . Tures of about nasdaq futures gaining 0. 3 . Anna lets get to the breaking news. We have data coming from the u. K. Inflation numbers first. The cpi number, month on month is a 0. 4 . Survey. St under the that seems to be the theme. You get the same pattern for year on year, above august but also below the survey number. Why we are seeing a big jump from august is because the lord inflation in the month of august. So we are seeing this rebound. Not a great deal of underlying momentum in inflation nevertheless, that is the view from bloomberg economics. The furlough has ended. The bank of england yesterday signaling that more measures could be coming. But seems to be the view of jan, who was speaking. Matt, you mentioned futures. There seems to be optimism around stimulus. Nancy pelosi, hopeful. Mitch mcconnell in less of a hurry preelection. 1. 88 versus 2. 2 now. This is a picture we have. Slightly mixed in asia but a slight move to the upside over all. The dollar is under pressure. A number of emerging market currencies moving to the upside. You can see the u. S. Treasury. 0year it is really on the 10 year yield that we are focused come above 0. 8 , after a fourmonth high. There is a lot of stimulus and whether it will come. And a lot of the tech stories you suggested. We will get to those shortly. Now for your bloomberg first word news update, here is laura wright. Lara nancy pelosi says she is hopeful estimates agreement week. Be reached this that would be crucial to getting it passed before election day. But Senate Majority leader Mitch Mcconnell is still running the white house about pursuing a bigger deal. Pelosi told bloomberg that progress is being made. We all want an agreement because it will need it and it is urgent and our economy needs it. We had a bump in the road with the Appropriations Committee. Not sure they are going to be are. , but lets hope they we are starting to write the bill and then we can have the negotiation. I am optimistic. Lara ecb president Christine Lagarde says a resurgence of the virus even before the coldest winter months is a clear risk to the economic outlook, a sign that policymakers are gearing up for more monetary stimulus. But economists largely expect them to wait until december before raising the 1. 3 trillion bond buying program. Saudi arabias crown prince is being sued in the u. S. Over the killing of jamal khashoggi. He and 20 others are named in the complaint. Russiagate was killed best to show the khashoggi was killed in 2018. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt laura wright in london with your first word news. This Company Reported thirdquarter profits that beat expectations, in fact, it beat the highest analyst estimates. The Swedish Telecom giant saw adjusted ibitda of a. 2 billion swedish krona. We are joined by Allison Kirkby, ceo of telecommunications company. Thanks for your time this morning. Tell us what happened. We know that the prophet was higher profit was higher than the highest estimates. How did you maximize your earnings . Are we sure we have Allison Kirkby . I dont personally hear her and , anna, i am not sure if you do. Anna looks like we dont. Matt it is most ironic when we lose a telecoms executive on a telephone interview. [laughter] i feel like that is the ultimate. Anna efforts in getting her back right now. Matt we should say, we are not necessarily using tellia technologies. Maybe if we were endtoend command that might have worked. The story is fascinating, and there is a lot of supply a news from them as well. Anna another story that we will be doing a little later this morning is we have akzonobel. They are saying that covid19 headmans ease in the last quarter and they plan a Share Buyback. They will be doing a lot of painting at home, apparently. We will be speaking to the ceo later this hour, thierry vanlancker. Received some news about the providers you picked to work on 5g in a couple of countries, finland and sweden, those are nokia and ericsson. Huawei was banned from taking part in the 5g installations. How does that way in part on making your selections, the fact that while he was not available to you . Allison were just glad that regulators decided to kick off the 5g spectrum auction because finally we can roll out 5g incident in the coming months. Matt i wonder about any other actions planned in terms of shoring up your balance sheet. You had more than 1 billion global carrier disposal earlier this month. The you have any other actions planned to reduce leverage to improve credit ratios . Allison on a pro forma basis, our leverage is down to 2. 3, which is a good level us to be at. It puts us in a strong position ahead of investment into our new networks and investment into productsvin rolling out and services on the back of our modernized networks in the coming year. For now, whic we are very much focused on trying to return the business to growth again after all the impacts we have had from covid. Very much focused on organic growth now. Anna what about the relationship with that divested unit . You still need the Carrier Service to service customers. What will be the nature of the relationship . Allison we have entered into a longterm Strategic Partnership with them. We will sell Carrier Services alongside some of our existing connectivity and collaboration services. It will be a very longterm operatingand under the same terms we have today. We do expect that they will want to retain us as a Strategic Partner as well. Nothing really changes. Telia to have relationships with investors who are focused globally and it allows us to be more focused on the region of the nordics and the baltics, where we have a way to win in the long term. Matt semi ask you about your experiences. Have the first wave of covid behind you. Now that we are looking at a second wave in europe, what do you expect for the nordic regions and for the impact on your business . Allison based on what we know today, we expect the covid impacts that we saw this quarter, which was 600 million on the top line, and 300 million on the bottom line, to continue into the next quarter. Very much driven by loss of roaming revenues and pressure on the advertising sector in our tv media business. We dont expect either of those to turn around in the shortterm. We are not seeing the same stores, we have a very digitalized population anyway. So we have not seen the same economic and Consumer Impact that may be other markets are seeing because of their lockdown measures being more extreme. Impacts. Roaming until travel is back and until consumer Economic Confidence has improved, expect our advertising revenues in the tv and media sector will remain muted for time. Anna allison, thank you for joining us this morning on the european open. Ceo of telia. Akzonobel says it is running a Share Buyback to be completed in the first half of next year. The dutch painter manufacturer also said the headwinds from covid19 continued to ease in the last quarter. We are joined by the ceo of akzonobel, thierry vanlancker. Good to see you. Things seem promising, but we all know infections in europe and other parts of the world are on the rise through the winter. How much visibility do you have at this point . i think we have enough visibility to be confident about the next quarters and the year to come. We had the worst of the lockdowns at the beginning of the year and the middle of the year. I think it has proven our ,usiness model is pretty agile and we keep focused on our margins in our costs, so we feel that for us even the second wave will not have that much impact on our Business Model. Matt you just heard Allison Kirkby talk about how their sales model is more agile and less reliant on football and stores. That is in nordic issue as well issue. Lia i wonder, how much have you changed your Business Model at akzonobel because of this new covid situation in which we now live. Thierry good question. In the first wave, we had to step up our ecommerce activities, they were hardly used. Once of the week of the first over, people stepped away again from ecommerce. I want to point out that for us, if you look at what is consumerlinked, it is probably less than 20 of our company. The other half is professional trade, and the painter that comes to your house to do a painting job. The other 50 is Industrial Coating from ships, planes, cars. Industrial complexes. In that part, the ecommerce business is actually company to company connections. For us, we continued to build on the from consumers has been relatively limited. Anna so it has continue to have a decent rise. You mentioned ships, planes, and cars. What other Industry Groups the you apply . Some reports are that the auto sector has been good, but aviation is still a troubled business. What are you seeing . Thierry correct. Indeed, the paint business has been strong. It was already strengthening before the covid crisis. If you take a look away from europe, at our south american business, it is gaining share. Margins were ok in china. Geographic expansion in the countrys doing well. If you look at our industrial businesses, the weak spots, you just least of them the automotive markets are very small but still very challenging. Aerospace has been down since the beginning of the way linked to the lower travel. Shipbuilding is not that strong. On the flip side, we have seen that in our Powder Coating business, we are number one worldwide. Bolstered on the quality of the product, that has been growing above what it was last year. So it is really very different dynamics. The weaknesses you just spotted. But all of those areas, Powder Coatings, wood coatings, packaging, is very strong. We have a very diversified portfolio. That explains why we are up 18 and our bottom line and explains why all of our metrics are very strong. It balances out the good and the more challenging. Companies,many other you put some restructuring for cost cutting measures on hold during the pandemic. I am wondering Going Forward in this quarter and beginning of 2021, what is still on hold and where have you gone back to plan . Teri you may remember that the 15 saless to reach by 2020. Since the beginning of 2018, we had a transformation program. We did the hard work during the last years before the pandemic so we do not have to do anything special for the pandemic. We also i think it really made our Business Model pretty lean. Still a ways to go, but so far we are good where we are. It is also why we did not need to take any specific measures during covid19. We dont believe we have to take any special measures even in 2021. You mentioned the Share Buybacks. We still have our house in order. We are very lowleveraged, generating a lot of cash. So we feel we are ready for whatever realistically might 2021. Or at us in matt thierry vanlancker, ceo of akzonobel, talking to us about earnings. We appreciate your time this morning. We are asking today on the mliv log, the question, when will techd priced in antitrust risk if they have not already . We put that question to mark cudmore bloomberg mliv managing editor in singapore. This is bloomberg. Anna welcome back to the European Market open. European futures are pointing to the upside. A little more so in paris and berlin. Lets get to the markets with mark cudmore, Bloomberg Markets like managing editor in singapore. A lot to talk about this morning. We want to talk about tech, but i also want to mention, many government around the world are working on how much to spend in shoring up economies during the pandemic. Net that in the, 1. 35 of the, the most since 1960 1. 35 of the gdp. What do you think of the debate about how much debt levels matter at this point and when they will start to matter . Mark at the moment, they are not mattering too much. There is too much focus on the fact that we need more stimulus to get the on the pandemic. I think they will matter in 2021. Maybe the moment will come after we get excited by the u. S. Stimulus package that will eventually arrive probably at some point next year, after repricing that initial euphoria. People might start going, when does this constant injection of cash become a problem . When we start focusing on those big that loads around the world, i dont think the u. K. Will be in the firing line big debt loads around the world, by dont think the u. K. Will be in the firing line. Percent of gdp has become common. Many of the. Developing markets are quicker on the firing line. Even emerging markets are getting closer to that level, countries like zell come to mind brazil come to mind. Matt i want to. Matt ask about the macro view. You said the dollar bears need to consider the pain threshold. Where is that threshold . Be best dont seem to dollar bears are not getting too squeezed. We have not had any Real Progress in either direction. Cometh the hours dollar is certainly softer as you get excited about stimulus hopes again. If stimulus eventually falls through and becomes clear it is a postelection issue, we still retain hope. But once the hopes are fully quashed, one might see the squeezed. When we do get the dollar squeezed it might be more painful in the short term than people think. I buy into that argument. The reasons we are bearish the dollar the reason to be bearish the dollar is very longterm. Anna the question of the day come at what responses are you getting as to when tech will price in factor trust risk . Mark people are worried about next year under biden. The best, answer i have seen is from my colleague who makes the point, the u. S. Might talk on aggressive game against the bigtech companies, even under a new administration, but they cant afford to be too harsh on them when they are entering a tech war versus china. China is doing a lot to encourage the domestic growth in the tech sector. The u. S. Cannot afford to persecute its own. Matt plus if there was no google, on of us would really know how to use internet. [laughter] mark cudmore, thank you so much for joining us, mliv managing editor. You can access his blog by timing mliv typing mliv on your terminal. Nancy pelosi which is closer to estimate of deal before the election. But Mitch Mcconnell also warning the white house against the igger pelosiled deal. 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. Anna welcome back to the European Market open, 30 minutes before the start of the trading session. Get the bloomberg first word news update with laura wright in london. Lara thanks. Google is being sued by the u. S. Justice department for abusing its monopoly in search. It is seen as the most significant antitrust action against an American Company in decades. Google controls about 90 of the Search Market in the u. S. , and the doj says that is an unchallenged gateway to the internet. Google is being sued y the u. S. Is accusing google of using exclusive deals to smother competition from rivals. We think this case is deeply flawed and risks harming american consumers. We compete vigorously in the marketplace. Our industry, our sector is marked by prices that are free or falling and rapid innovation, and those are really hallmarks of a competitive industry. Laura the u. S. And the you you are heading for a clash over the u. S. And the e. U. Are heading for a clash over their preferred candidates to lead the world trade organization. Sources tell bloomberg that brussels is supporting the nigerian candidate. Observers believe the Trump Administration is leaning towards the other candidate from south korea. The preference of other Major Economies is not clear. Saudi arabias crown prince is being sued in the u. S. Over the killing of journalist jamal khashoggi. Prince mohammad bin salman and 20 others are named in the complaint. Khashoggi was killed by saudi in 2018. Crown Prince Mohammed denies any involvement, but accepts responsibility as the countrys defacto leader. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Wright. Ra this is bloomberg. Anna, matt. Matt thanks very much, laura in london with your bloomberg first word news. Nancy pelosi and Steven Mnuchin are moving closer to a stimulus deal that is crucial to getting a bill passed by election day, even as the Senate Majority leader Mitch Mcconnell is wanting the white house against a bigger deal. Still come the white House Speaker is hopeful they can reach something. Rep. Pelosi i am optimistic. Youslation is tough because are coming from two different perspectives on it. But as long as we know that we want to keep the American People safe commit that means we have to support our health etc. , that teachers, we have to depend to took wash the virus and we have to put money into pockets of the American People so they can have some confidence and spend in our consumer economy, to eject demand and create jobs. Take us through the process. Youre in the room, we are not in the room. What language you need to say, yes, this will work . I assume you dont need the entire bill to be written. Time. Akes what do you need sleep you know that you have enough of a meeting of the mind to say, yes, we can make this work . Rep. Pelosi again, things have different weight. Like i said, on our our heroes, crash the pockets of. With those, we have enough money for state and local. Those are the people who are getting fired and going on unemployment. That doesnt seem to make sense. That is where we need more work. We have still some language to deal with in terms of Health Beyond the testing, tracing, treatment, masks, all that. We have to improved the language on Health Care Providers as well as the vaccine. Is within range. In terms of money in the pockets, we are still fighting an earned income tax credit. Statistics,n the 68,000,000 more people will fall into poverty 6 million to 8 million more people will fall into poverty because of covid and we think we should be investing in them. Economists tell us, help the neediest, they will spend it first. So it is the right thing to do from a compassion standpoint and also the writing to do from an economic standpoint. We just have some differences. Two book ends of our differences right now, one is state and local, and the other is liability. Safety in the workplace for us is not an issue. It is a value. These families come at of them as social workers, go to work. If they dont, they dont even get Unemployment Insurance. They are concerned about going to work as they might catch the virus because revisions have not taken place so safety in the work. Race is very important. I am hoping we can come to terms on that. In between, we have some differences. Of course, they dont want to do anything for elections. I am very concerned about what they are doing on census. It is so unconstitutional but. , again, we may have to live to fight another day on that. I dont know. They said they have no movement on the census, which is in defiance of the constitution of that everystates, person in the country should be counted the Supreme Court just ruled against the president that he can stop counting people. But congress can change that, and that is what we hope to do. Anna that was a u. S. Speaker nancy pelosi speaking to bloomberg. With more on the story is our Senior International editor, Jodi Schneider. Good to speak with you. Why are House Speaker nancy pelosi and the white house expressing hopes about getting a stimulus deal . There seems to be weap between the big numbers are discussing here. But why are they talking about getting a deal done this week . Ati nancy pelosi had first said yesterday, two weeks before the election, that it would be the deadline for coming up with a deal or they would not be a what to get it done before the november 3 election. Now she said that was really a day to have made progress and that she and secretary mnuchin had made Real Progress in their call and she was asking house committees to start doing the work of putting together that bill. Without a number, it will be hard for them to know what shape the bill is. If there is a lot of work to do in getting these things together. So it would be a long shot to get this done before the election. But the fact that the white house and the House Democrats want to do it are keeping things alive here. The senate is where there is some resistance and you would need the senate to get behind this or there is no way it could move before the election. , it is clear why President Trump wants to pass a deal before the election. But why does nancy pelosi really care . Could she not do it with a lameduck congress if there were one after the election . If biden wins, wouldnt it be easier especially to get the senate to do what she wants for a deal . Jodi perhaps. Some have speculated that. There are some in her party who think at this point it is not worth it, they have waited long enough, why not wait a little longer. But she has committed to this and has been negotiating. She also feels like the white house will go along with it. And maybe she has incentive. Tobe she is not adverse putting some pressure on those senate republicans. The very reason Mitch Mcconnell does not want there to be a vote, he does not want to put some of his members who are in tough races in the position of, going with a higher number than some districts or voters may want, or looking like they are not helping out the white house and helping out people in need of stimulus. Nancy pelosi said she also wants to go ahead because of the virus is spreading and the economy is starting to weaken again as a result of that spread. Anna no politician wants to be seen to be standing in the way of something where time is the essence perhaps, and the optics are important even if you are close to election. If we do get a stimulus package, what ship might it take . We heard pelosi talking about the priorities. For the democrats, there seems to be a lot a for both sides on exactly where the money will be spent . The and out, that is several trillion dollar question, right . House democrats say they want to . 2 trillion. The white house at this point says they are willing to have 1. 88 trillion dollars. Republican Mitch Mcconnell said, lets not go that far. Mitch mcconnell is also trying to use some against the democrats and saying, they wouldnt even go for some of these basic things that we have said we need. There is basic agreement on what would happen. An extension of Unemployment InsuranceSmall Business loans, things that kind of small assistance best things we saw in earlier packages. The dollar amount seems to be what a lot of the sticking points have been, and this has been going on for a lot of now. S matt Senior International editor Jodi Schneider talking to us about the current state of the stimulus horserace, i guess. Next, the most significant antitrust case in the past two decades. The u. S. Department of justice has sued google, accusing it of abusing its monopoly power. We discuss that next. This is bloomberg. Matt welcome back to Bloomberg Markets the european open. We are 18 minutes away from the start of cash equity trading. Futures are higher and especially in paris. Cap futures are up 0. 8 . Lets get to your morning calls. Juliette saly joins us from singapore. We will kick it off with Cathay Pacific announcing thousands of job cuts. What has been the reaction from analysts . Juliette we never like to see job cuts. There has been so many in this pandemic. Cathay pacific coming through with 8500 job cuts, more than what has been reported by local media yesterday. 5300 of these jobs are local. Another 600 offshore, 2600 Unfilled Positions will be limited. We had a couple of houses, morningstar and others, upgrading Cathay Pacific to a buy. We have seen shares jumped the most today in a month. But another analyst maintaining. Them at a hold. Their recovering hinges on a bubble. Saying,what jeffries is this will be the only kind of thing that gets the airline on some recovery. Anna let me ask you about another theme that has been strong during the asian session. Looking at the yuan and trades around the yuan. There . The story julian we saw the onshore much the offshore at its highest level since 2018. A lot of analysts saying, does this mean you will see authorities try and step in to maintain the gains you have seen in the yuan . Alan ruskin from Deutsche Bank is saying, it doesnt matter whether you see a blue sweep or a biden presidency, he will still see the u. S. Dollar weakened against the cny. He says the biden administrations attitude toward china cut a need to dollar weakness. Elected, theis fear of trade tensions could encourage more support for the u. S. Dollar against the cny. But if he wins, expect more strength coming through on the onshore. Matt julia, thanks very much, Juliette Saly in singapore with your morning calls. Back to the Bloomberg Business flash, back to london and laura wright. Lara thanks, matt. Netflix says its outlook for Revenue Growth in food as consumers turned to its brand during the pandemic. Nestle says it is forecasting organic sales growth of 3 . And increase in tech ownership is also driving sales of its products. Goldman sachs said its workers at its London Office home after two employees tested positive for covid19. These latest cases are a setback for the back is it tries to return to its offices. In new york, about 30 are now rotating. Thancompany surged more 20 yesterday after quarterly revenue and user growth topped estimates. The Company Previously had won the pandemic would cut revenue, with the Company Losing Money from the lack of big movie launches, but the slowdowns never happened. The lack of new tv and movies mt more people turning to the app. That is your Bloomberg Business flash. Anna cents so much, laura wright in london. The u. S. Doj has sued google, of usin itsf many for the best accusing it of abusing its monopoly. Here is what google had to say. We have been scrutinized on the same issues in the United States and in other jurisdictions globally. The u. S. Federal trade commission it looked at the same issues that the European Commission looked at between 2011 and 2013 and reached an opposite conclusion. Canadian commission looked at these issues raised by the department of justice today and reached the opposite conclusion. Our position is that we are confidence. We are competing and delivering values to the consumers in the places we operate and we need to continue to make that case for ourselves. Anna google seems to feel it has been here before. Joining us is the media and tech analyst at bloomberg intelligence. Matthew, great to speak to you. Why is this loss of causing such a stir. Not so much,ces but it is being talked about a lot. There is a lot of talk about regulation in the sector if we month. En victorious next matthew yes, i think hazmat said earlier, it has been a couple of decades since we saw such a big challenge in the u. S. As a nation, they dont like to get involved in regulation, it is a latetouch environment. , theirfter google biggest sort of Global Change company, is pretty significant. It controls Something Like 90 of the Search Market in the u. S. So it really is in a very powerful position. It is open to interpretation whether they are playing fair or perhaps they are stretching or making too much of that strong position. It is going to be a persistent theme. As well as the federal level investigation, there are a number of states investigating them. It will be a big year for their legal department. Matt googles defense is, hey, anyone can easily switch to bring. It only takes seconds that switch to bring the key anyone can easily switch to hey, anyone can easily switch to bing. I have done it, it takes seconds. Matthew there may be better such engines out there. But it is such a powerful business now. To put talk about googling, not searching. It will be really hard for any company to displace them. Way, they pushed a few boundaries too hard to create that position, who knows, that is kind of a legal interpretation, but the reality is that we are all going to be using google search, google maps, google everything probably for a good while to come. It will be really hard to displace them0 as you say, when your business has become a verb. Netflix,k about slumping in late trade on adding fewer subscribers than expected, missing the forecast. So much of its growth is tied to new subscribers. What is going on here . Matthew as with netflix, it is very bumpy. Net adds were, week this quarter. They werent that bad. The bigger context, they will probably at about 34 net new customers this year. The figures record was 24 million in 2018. So it has still been a great year for them. In terms of the outlook next year and beyond, they still have a huge amount of options. Whether the momentum will come back a bit will still be in the 28 million range i think for the fiscal year to come. So they are still very confident about the outlook. They did really well on content. They had a lot of content to launch. Reallyhave engaged with that. They are back filming 50 shows and they expect another 150 shows to begin filming yearend so they are content library will get even more powerful next year. So they are in a good place overall, i think. Matt matthew, thanks very much for joining us. Matthew bloxham, media and tech analyst for us at bloomberg intelligence. We are minutes away from the open. Next we will get you the stocks to watch this morning including nestle. The food giant is raising its forecast on booming sales of big brands and alreadymade meals. This is bloomberg. Anna welcome back to the European Market open. Seven minutes until the equity trading session. Things looking more positive since european futures. Lets get to the individual stocks are watching. Dani burger has the details. Lets start with nestle. What is the big picture story . Are twoe other party emerging trends that have helped nestle a lot with the earnings, one being consumers reverting to the big brands they have already known, the second being increased pet ownership was has helped nestle with things like bear pet food. That drove thirdquarter sales rising at the fastest pace in six years. Matt what is the story with ericsson . It seems to get contracts in sweden . Dani thats right. Strongerthanexpected profit. Part of this is the huawei story. With increased scrutiny on the chinese company, ericsson is able to scoop up that market share. Specifically, it has grown in both europe and in china. That will offset some of the impact have seen from the pandemic shares crawled up 2 this morning. Anna we spoke to the ceo a little earlier fun. Paints continue to do well. They are also seeing a pick up on the industrial side of the business. Dani those were things impacted by the coronavirus. It is interesting he said he didnt think the second wave much,impact them as they are somewhat insulated from that and there is no need for major cutbacks as well. All those things he discussed with you guys, this morning surely will help their stock rise in todays trading session. Share buyback a plan to be computed in 2021. With so Many Companies stalling their buybacks and payouts, that is surely welcome news to the markets. Anna, matt. Matt dani burger, thanks very much, talking about the stocks you want to watch. Five minutes to go until the market opens. Futures are higher this morning, much higher on the continent, especially in paris then in in london. Han equity futures up about 1 . This is bloomberg. Anna a minute to go until the start of wednesdays cash equity trading in europe. Germany, greece and the netherlands hit new records of daily coronavirus cases. Manchester is on englands toughest lockdown. Stocks pushed higher on signs a stimulus deal before the u. S. Election is possible. Nancy pelosi said an agreement is urgently needed but there is way to go. Netflix misses wall street estimates and its forecast suggests the pandemic boom is starting to fade. Matt . Matt we are looking at future s that arepointing higher that have moved higher in london. About now only. 1 . But they had been in the red minutes ago. Dax futures up. 25 bt. Ac futures doing the best. You can see the ftse straight out of the gates. Little change. Not a lot of size. We havent seen any sizor direct indications of futures all morning. We have seen gains in European Equity indexes. If you see the ftse moving higher, maybe we can guess that the european continental index also move higher as well. The ibex up. 5 . We see bigger green arrows there. Although not huge moves to the upside. European markets still opening higher this morning. That in spite of new record daily virus cases in countries across the continent as markets price in growing optimism about the progress of stimulus talks in washington. Joining us now is a chief economist. How important simon, are these stimulus talks in washington to european investors because at first glance it is a little odd that we would price those that kind of optimism over covid infections that are getting out of control. Good morning, matt. I think we have been here for at least three months. I think in terms of how european investors price the possibility of a deal before election day, i dont think it is usually material apart from some near term volatility. The problems throughout this extended exercise is the Economics Community is very clear that the u. S. Economy needs further fiscal stimulus to support u. S. Households and businesses. Unfortunately this is wrapped up in business and politics isnt it . Trying to understand how how a stimulus package is gathered. That is the more challenging part of this story. Anna good morning to you simon. Pacific northwesting it to europe. We saw the europeans issuing bonds to pay for support schemes of various natures. This was well oversubscribed. In trim a ratings. What does it say about investors attitudes for how government also support their economies at this point. I think it tells you an awful lot about investors expectations that we havent really seen the economic fallout of covid19. We havent seen that in terms nonperforming loans. Consumer and business change as a result of covid19. Ou talk about the appetite for triplea, e. U. Commissioned debt. That is symptomatic of real concern over what the medium term growth is in the euro area echoed by Christine Lagarde overnight in terms of her comments of not just infections but the hospitalizations and hospital rates in europe meaning they could get a second wave, a protracted wave is still to come. Matt is there much that Christine Lagarde can do . Were going to hear more from the e. C. B. Today. She says she has more tools in her kit. Of course i have never heard a central banker say anything other than that. Is it true . It is true, matt. We have been privileged to have these conversations for a number of years. The constraints of Monetary Policy are not mathematical. That you can always to further negative. You can always buy more assets. Yes, the diminishing marginal returns are that. The constrains are political. It is whether entities to eurozone, the governments sanction that kind of activity. Ilt say she is right, i would say she is right, Christine Lagarde, they have other tools they can use. They would rather see the iscal authorities backstop that large es. Anna what do you think unemployment is going to get to when you look at the eurozone and the way jobs have been protected in some places. What do you think unemployment is going to get to . Where do we see the peak in that story for europe . This is a fascinating experiment although it is an experiment with peoples lives and livelihoods. It is tection schemes, more effective in dealing with Big Industrial change that potentially comes from covid19. In terms of answering your question, i think the as long as these jobless schemes tonight with their existing levels of generosity across the eurozone. A tick higher 2010 1. 52 Percentage Points is probably about right in terms of our expectations. The question however is whether those job supports will be sustained as the political pressure inevitably turns toward rotating people interest a new demand. And the inevitable destruction that comes from that. Matt how long can government pay for these things, simon . We had someone telling us it is really no problem as long as they are issuing debt in their own currency which i get but in europe that is a little bit more of it is a different issue than it is for the u. K. And the u. S. I think you get right to heart of the point which is when you have common issuance ith the very least ambiguity over who the longterm holder counterparty is of that debt, it speaks to structural problems with the nature of the Monetary Union and moves towards if he is cal greater fiscal common tool kit. Therefore you are right. The challenges of continuing to do debt issuance to managing the state which is the right thing to do economically brings to the flore the political problems that existed way before covid19 and will continue to challenge policy makers until they decide to bite the bullet ultimately with their electorate and explain what the next stage of Monetary Union, Capital Markets entail n terms of fiscal liabilities. Anna thanks very much. Stay with us. Simon french will give us a little bit more of his time for the next conversation on the European Market open. Coming up, netflix flunked in late trade after adding fewer subscribers than expected. Well discuss that next. This is bloomberg. Matt welcome back to the european open. We are 10 minutes into the trading session now. The character and the cac and dax doing not quite as bad, down. 1 . Lets get the Bloomberg Business flash. Nestle says its outlook for Revenue Growth has improved. The Worlds Largest food and Beverage Company is forecasting organic sales growth about 3 this year. An increase in pet ownership has driven sales of nestles pet care products. Google is being sued. A significant antitrust against an American Company in decades. Google control about 90 of the Search Market in the u. S. The u. S. Is accusing google of using deals to smother competition from rivals. This case is deeply flawed and risks harming american consumers. We compete vigorously in the marketplace. Our industry and sector is marked by prices that are free or falling. Those are hallmarks of a competitive industry. Goldman sachs has sent some workers home after testing positive for covid19. Almost 70 of workers in the u. K. Are back. In new york, about 30 are rotating through the office. Matt thanks very much. Laura right in london. Netflixs latest results are adding to doubts they can maintain growth. It has added just 2. 2 million in third quarter. About a million r short of what analysts expected. Simon french turning his thoughts to some of the stay at home stocks and some benefits from these trends. It is interesting when you think about what the pandemic has done here because in so many fields of life, the pandemic has push things to the direction that we were heading but more quickly. Increase the pace of change. Neighbor helped netflix in the early days but it is increasing rates in which competitors are bringing out rival products. Certainly right when you are looking at the profile of netflix users. The broader point you make about the stay at home economy is the initial surge was very countercyclical. As the wider economy was going into a deep recession. Actually these netflix and the equivalent greater volume 3678 other forms of consumption were depressed. Suppressed. Restricted. So able to countercyclical during the recovery. You expect them to be cyclic a. M. Factors. They need to get into the mind set, the exit from big covid19 restrictions, a loss to have top line growth they have seen on the down state your name going to happen in the opposite direction as we start to consume things, holidays, restaurants and entertainment that have been constrained in the last six to nine months. Matt when do you expect and the look out second wave is happening. How long do you expect it to go on and when do you expect us to come out ofette . Rrp what a question, matt. Look, it is exceptionally hard for an economist to try and reinvent themselves as an epidemiologist as many of my colleagues have. Im not going to fall into the trap you set me there other than to say that the path way the intensity of efforts suggests that something if not 100 effective makes a significant dent into the the scale to have vulnerable population that allows us to manage it but that looks likely in the middle of next year based on experts. In that environment then the economy can start to do what i was talking about before the break. Which is rotate to new paths in demand gradually and reduce the spike of unemployment that will happen if you take off the protection schemes too quickly and if that managed transition aided by a vaccine and medical interventions that youre looking to get the recovery underway. Anna the destruction and the unprecedented uncertainty that the coronavirus has brought, hose are the of the chancellor overnight. Confirmation that the planned Spending Review that was going to be a threeyear project is going to be a oneyear prugget because of all d project because of all of this uncertainty. What is the significance of reducing the time horizon over what the government is planning here . The significance is that departments have had their budgets totally ripped up in fiscal year 2020. Are only going to get a single year of visibility over their budgets rather than a threeyear window so planning over the longterm becomes impaired. In normal times youd say that is not a good approach to managing the public funds but these are far from normal times. We have borrowing data out of u. K. More than 200 billion pounds of borrowing year to date. The debt burden higher than any time since 1960. These are quite big figures. Given how quickly they have shift i think it is quite smart for the chancellor, the treasury to say we will take stock and until we have more clarity of the sustainable path way for te the economy and the Public Health response. Matt how long until we pay the price for all of this debt, simon . Yeah, so ive been very vocal on this. The u. K. , indeed all Major Economies are under no immediate pressure nor should they be to pay the price. If we look at previous episodes where huge disruptive shocks, we think to have world wars that took place and public sectors took on out of necessity smart economics, took on big debt. They didnt pay them off quickly. Multigeneration. Long dated debt. Take advantage of the appetite for long dated debt is very good. I think well get fiscal Forward Guidance from lots of governments around the world saying wont start fiscal tightening, repaying this debt until employment reaches a certain threshold. Matt appreciate you joining us. He is going to be continuing the conversation with us on Bloomberg Radio at 9 00 a. M. U. K. Time. Just about 40 minutes from now. You can switch over from the television to the radio if youre in london, listen to us on london digital. Anywhere else in the world, you an just google us or you can bing Bloomberg Radio never tried it but i will to see if it works. Coming up, a roadblock to one of the biggest deals in tech. Hina throws up blocks to videos. This is bloomberg. Isloomberg. Anna welcome back to the European Market open. 21 minutes into the market session. Going into negative territory despite the futures picture that looked fairly buoyant. Putting asise side any hope for u. S. Stimulus although u. S. Stimulus points to the upside. Ear europe, it is Consumer Discretionary projects that seem to be moving slower. Countering the trend. Riksson profits surging as huawei ban offsets the pandemic here. They have been awarded some contracts as well. Same story at nokia. They won a deal. This is temporary staffing business. Growth margin beating estimates. Some analysts saying businesses may turn to more cost structures and that could mean temporary staff. Matt lets get more on that story. The planned acquisition of arm may hit a roadblock. Bloomberg learned that Chinese Tech Companies including huawei are lobbying the countrys regulators to reject or impose conditions on the ho billion deal. Armed semiconductor devines central to most electronics and could become another pawn in the u. S. China trade tussle or has become another pawn in the u. S. China trade tussle. Joning us to discuss is edwin chan out of hong kong. What is huawei and these other companies worried about . At the end of the day they ant to ensure continued excess to technology. The fundamental Building Blocks of many to have World Electronics from smart phones to high powered super computers. They want to ensure if beijings regulators pass this deal they will not lose access to key essential technology. Anna thats why it matters i suppose whether they buy a Japanese Business or a u. S. Business. This is all part of the Bigger Picture tension between china and the United States at this point. Thats right. I think the tensions are playing a huge role in regulators determination. A review of this deal, the largest in acquisition history for the semiconductor industry. I think the fear amongst huawei and its compatriots is once it s owned by a u. S. Company that Rm Technology will be out of reach. Arm would argue it is not in their best interest to do so and that really u. S. Sanctions are pretty much global at this point. But again, you can see from huaweis standpoint why they would be concerned. Matt what does this mean for the deal, edwin . I think as you pointed out it is a significant roadblock. There was always going to be problems getting approval in the u. S. , e. U. , u. K. , other jurisdictions where industry players may raise some objectionses but i think the biggest obstacle may be china which is not a transparent process. It will be interesting to see how this plays out. Anna interesting to see what the chinese regulator decides. Also to see what othering regulators decide to do and whether the u. K. Government tries to put any conditions on the purchase. Whether they can do that and what those might be. European equity market moving to if downside as we go through the first 25 or so minutes. Only two sectors in positive territory. Telecoms and banks. Telecoms doing very well and part of that is the eriksson story. Matt absolutely. Eriksson and nokia getting contracts. Eriksson posting a profit better than expected. Actually earnings looked pretty good today. Tealia look good as well. May be due downturn to coronavirus. May be less about a u. S. Stimulus deal before the election. The e. C. B. Coming up, kicking off an event to assess its Monetary Policy. How it is perceived. The e. C. B. License. Next live in frankfurt. Anna welcome back to the European Market open. 30 minutes into your trading session. Things have deteriorated, the story for equities this morning. Down. 3 on the stoxx 600. Part of that is whats happening in london. Not all though. The ftse down. 5 as well. It is not just the rise of half a percent on the pound that is taking the steam out of the ftse 100. There are bigger stories at play here as well. Thats what we have got for you in terms to have markets. As we discussed going into break, there are only a couple of sectors in positive territory this morning. Broad based. Lets get to a bloomberg first word update. The u. S. May be edging closer to a stimulus deal. House Speaker Nancy Pelosi said she is hopeful an agreement can be reached this week. Senate majority leert Lauren Michalski mcconnell is warning the white house against pursuing a bigger deal. Pelosi said progress is being made. We all want to get an agreement because people need it. It is urgent and our economy needs it. We had one little bump in the road with the Appropriations Committee that is not sure they are going to be ready but lets hope they are. We are starting to write the bill and then what can happen. Negotiation. Im optimistic. The u. S. And the e. U. Are heading for a clash over their preferred candidate to lead the world trade organization. Ussels is looking to support someone from nigeria. The Trump Administration is leaning toward the other candidate. Saudi arabias crown prince is eing sued in the u. S. Over the khosng of the journalist igi. Global news 24 hours a day. Powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna . Matt . Matt thanks very much. Laura wright there in london with your first word news. Now we have going to briefly show you live pictures of the e. C. B. Listens event. It is being opened by Christine Lagarde and philip laine. There you stheem. This is part time of the Central Bank Strategy review. More than 20 Organization Also explain how they perceive european Monetary Policy. Joining us now is our e. C. B. Reporter caroline. Thanks for joining us on the program this morning. What can we expect to come out of todays e. C. B. Listening event . Hi, matt. Today is really about the e. C. B. Listening to what representatives of society have to say on a number of issues related to its policy. As you know, they have been pumping trillions of euros of stimulus into the economy for the last few years but at the same time we havent seen the significant gains in price crothe growth that they have wanted. There have been persistent questions over the effectiveness of the policy and the side effects. What are the implications for inequality when the e. C. B. Is buying Financial Market assets or what are the consequences for Climate Change when youre driving down the borrowing costs for big polluters . That is what i expect the discussion to be about. Anna i remember prepandemic, Christine Lagarde and some of the others on the e. C. B. Seemed to be divided on their views around Climate Change and how much the e. C. B. Should take that into account. Things have changed fast, havent they . Where does this leave the e. C. B. In terms of its overall strategy review . They still have mar than half a year to go and there are a lot of issues they have not really touched on yet. I think one area where we have heard quite a number of views from policy makers about inflation goals, currently below but close to 2 . There seems to be a consensus crystalizing this goal doesnt quite do the job for that. It need something that summers around 2 . There is still a lot of time to go before any decision is due. Matt we have the next e. C. B. Meeting coming at the end of october. When is the next live meeting, so to speak, caroline . When is the next time economists expect real action from the central bank . As far as i have seen, i havent seen any calls for october to be in a live meetings a we say. Most economists are expecting any action if at all to come in december. In a way that, makes sense because youll have the u. S. Election behind us. Well have new forecasts which will include forecasts for 2023. The e. C. B. Will just a lot more Information Available on hich to base its decision. Anna thanks very much. We see Christine Lagarde and the voices they are listening to. Thanks for joining us from frankfurt. You can join the whole if youre a terminal subscriber, use live go. 35 minutes into wednesdays trading session. Up next, the u. N. Says more than one million species are at the risk of extinction. What is the cost . It could cost 20 billion a year. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. 38 minutes into the session. Were looking at red arrows across European Equity indexs with the ftse off. 5 . Lets get the Bloomberg Business flash. Nestles says its outlook for Revenue Growth has improved as consumers turned to its brands during pandemic. The Worlds Largest food and Beverage Company is forecasting sales growth of 3 this year. An increase in pet ownership is also driving sales. Netflix said latest results are adding to doubt they can maintain adding just 2. 2 bill million in the third quarter. About a million short of what was expected. The kean warned the pandemic oom will not last. The company had previously warned the pandemic would curb revenue with the Company Losing Money with the lack of big movie launches. The lack of new tv and movies meant to more people turning to the app. Matt . Anna . Anna thanks very much. One of the many impacts is the nature bio diversity in one million of the earths eight billion species is facing extinction. It could cost 20 trillionia ear. Lets discuss this with one of the authors over the report. Equity Research Analyst at barclays. Good to speak to you. If we didnt have enough reasons to look after the planet, you presented us with some more. If you care about the biodiversity, you basically have to avoid palm oil, are there ways to invest and make sure things are sustainable . Rush good morning. Thank you for having me on. You raised a good point. These commodities in the report as being important to diversity perspectives. We by no means expect investors to move away from commodities. Take for instance palm oil. If you move to an alternative oil, you need 10 times the amount of land. T simply wouldnt be fees to expect such a shift. What were seeing are the growing trends of the use of things, ensuring that supply chains are free are important ways that investors should be looking at it. Matt what else can investors do here . I mean there are so many things a things you dont think about. What else can investors do to take advantage of a shift for Consumer Behavior . Absolutely good question. There are three ways it can be meaningful to the Investment Community. First is simply addressing biodiversity and additional risk factors, particularly for sectors such as palm, soy, cattle, timber. He other way is really using biodiversity as a new additional screening metric. Company is the most sophisticated in termsor managing these risks. Were seeing the likes of unity. Investing 1 billion our euro into the climate fund. And lastly, were seeing the Investment Community using the odiverse play into the capital scene. They are helping further the issues of concern. That can be using Satellite Technology to monitor a plantation and check for suspicious activity. It is very encouraging to see consumers investing and using these technologies to make sure chains. E supply anna how do you tackle when you get to the nuts and bolts of this . How do you tackle the perception on the ground of the farmer who is farm this way. That there are economic benefits gained from common practices . How do you get around that . There are a number of ways of doing this. I think were seeing more partnerships in terms of the food giants and retail. Working with their partners. Help them understand correctly using chemicals and fertilizers is not just positive from a biodiversity perspective. It reduces costs. Farming is a key driver of investment opportunity. It is a very collaborative approach. We are seeing increased partnerships with farmers. Matt thanks so much for joining us. Sorry, anna, did i anna i was just going to ask about specific companies, cathy lynn. Katherine. As you screen for some businesses that are acting to protect biodiversity, what do you find . Yes, happy to take you through that. I think that is probably the best place to start. In packaging area, there are a number of countries doing a number of Different Things to think about looking after their forests. Increasing recycled paper. , consumer good area, important factors to cover. Staying with retailers with links to the companies we highlighted in the report. One of the things that is really important for the Investment Community to do is speak to companies where they cak and look at the increasing reporting in terms of initiatives. Matt now i thank you, katherine. Really a pleasure having you on the program and appreciate your time this morning and your report. Katherine, equity Research Analyst at barclays talking to us about the cost of the loss of biodiversity and the possible Investment Opportunities as a result or as a result of the reaction to that concern. Coming up today, were going to the techs n will price in antitrust risk, if you think they have not already and if you to think there is any risk. There are a lot of ways to look at this question. Were going to put it to laura cooper next. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. We are 48 minutes into the session right now. Were looking at a mixed picture with the s p futures higher so if youre prepping for the open on wall street, you still see a slight gain in futures. European stocks have turned lower. Stoxx 600 down. 6 . Nancy pelosi and Steve Mnuchin are moving closer to a stimulus deal this week crucial to getting a bill passed by election day even as mitch mcsconl warning the white house against a bigger deal and has been for quite sometime. Still the House Speaker is still hopeful a deal can be reached. Im opt mesk. Legislation is tough because youre coming from two different perspectives on it, but as long as we know we want to keep the American People safe, that means though that we state and port our local healthcare responders and put money in the pockets of the people so they can are some confidence and spend in our consumer economy to inject demand and create jobs. Take thruss the process if you could. Youre in the room. Were not in room. What sort of language do we need to say yes, this will work. You dont need the entire bill to be written. That takes time. What do you need to say yes, we can make this work . We are again, things have different waket. But as i said weight. As i said, to honor our heroes, crush the virus, money in the pockets. Within those we have more money for state and local because those are the people who meet our needs. They are getting fired. Drawing unemployment. That doesnt seem to make sense. Thats one place where we need more work. We still have language we need to deal with in terms of health, beyond the testing, tracing, treatment, masks, all that. We have to have better language and improve the language on Healthcare Providers as well as the vaccine and it is within range and in terms of money in the pockets, were fighting for unearned income tags, child tax credit, for working families in our country. As you have seen the statistics over the weekend, 6 million to 8 million more people will fall into poverty because of covid. We think we should be investing in them. Economists tell us help the neediest. They will spend it first. It is the right thing to do from a compassion standpoint also from the economics standpoint. And then we just have some differences in there. Two bookends are our differences now. Since you asked. One is state and local and the the workplace is not an issue. It is a value. These families, many of them essential workers. Go to work. If they dont, they dont get Unemployment Insurance if they are concerned about going to work because they might catch the virus. Im hoping we can come to terms on that. Those are two bookends. In between we have differences. Of course they dont want to do anything for elections. Im very concerned about what hey are doing on census. It is so unconstitutional. But again, we may have to live to fight another day on that. I dont know. They have said they have no movement on the census which is in defiance over the constitution of the United States that every person in the country should be counted. The Supreme Court just ruled in favor of the president that he could stop counting people. But the congress can change that and thats what we hope to do. Anna that was u. S. House Speaker Nancy Pelosi speaking to bloomberg. Let me get some breaking news coming through on the brexit front talking to the european parliament. Saying well continue to look for a deal until the last day. The deal must reflect a balanced compromise as this new language coming through from the European Union will leave the brussels expert to interpret. He is ready to talk in cases of legal text with the u. K. Maybe the first time he is saying it outloud. An agreement with the u. K. Is within reach. Time is limited. We need progress in coming days. It is having an impact on the pound. The pound had been leaning in a stronger direction for around the last hour or so but it is intensifying and looking at a euro pound session chart now. We see the pound doing very well there. If the market expectation changes here, lets talk to laura cooper. Laura. It takes a brave person to say yes, this is it. This is a moment moment where we make progress in one direction or the other on the brexit conversation. The pound is reacting. Gaining strength this morning. The pound is gaining strength as you mentioned. We are seeing cable back bop above that 130 handle. Todays comments really dont change the nair ravet that markets are expecting some kind of deal to be reached. The selfimposed deadline was clearly redrawn and i think ultimately it is the end of the year, the end of the transition period that markets are focusing on and the comments were seeing come out, few continue to underpin this expectedation that we will see something come through in the hard exit of the u. K. From the e. U. At the end of the year. Matt very interesting moves there in the pound. It does help that the dollar is down against, well, every other currency right now with pretty serious size. Let me get to the question of the day. When will the techs price in antitrust risk . It doesnt look like they have yet. I guess it depends how much you believe the risks are worth. It is quite interesting. I think the question is im not surprised that investors are taking this latest element in stride. This is really can be thought of as a slowmoving iceberg instead of a shot to market. It may not actually sink the ship. If we look at antitrust stocks still day, gained for the day. I think at this point investors are shrugging. Tech is in the cross harris of government regulations. There are three crucial reasons for this outperformance. We cannot be deterred too much. One is the fact, the breakup of these firms could take years. Investors are not going to price that in right now. Anna thank you very much. We are seeing some interesting new language coming through. This is bloomberg. Yousef stimulus twist and turns. Nancy pelosi says she is hopeful dod agreement, but how often political reality is misaligned . Realities misalign . A Christine Lagarde and the economic outlook