Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

Iran and russia are attempting to interfere with the president ial election. They say theres no hacking involved. There are 12 days left until the vote. Spain is the first nation in western europe with one million virus cases. Rome considers implementing a nightly curfew. It comes as u. S. Hospitalizations reach a two month high. German cases jump to a new daily record of more than 12,000. The pound surges the most in six months as the u. K. And European Union resume talks over post trex it trade deal a week after Boris Johnson threatens to walk away. Negotiators arrive in london today. Anna lets get to some breaking news. Corporate reporting. Lets talk about some numbers from unilever. Third quarter underlying sales up by 4. 4 . Increase of 1. 8 . That looks to be better than in then has been anticipated. An estimate of an increase of over one. On pricing, things are weaker. The pricing comes in below estimates. Topline takeaway, sales have been beaten estimates. They are talking about continuing their progress on their strategic change agenda. One of the things they are trying to do is unify under a single Parent Company headquartered in london. No word on that this morning. That is something that is top of the agenda at the lever. We have been gearing up for something positive from this business. We heard from the ceo in september. He was giving fairly positive commentary back then. That sets us up for something pleasing today. A number of businesses beating estimates already. In terms of luxury earnings, hare mas is out with sales in the Third Quarter of 1. 8 billion euros. Thats also a beat. The estimate was for 1. 7 billion euros. The asianrebound in region. Third Quarter Sales beating at a constant currency. They are up 6. 9 . The estimate was for a gain of 1. 3 . Thats a big beat. Guidance confirmed for ambitious growth. Watch for those shares to move in todays trade. Anna . Anna lets get to the gmm then and have a look at where we are on markets. Overnightf the picture, futures look weaker. Weve got asian equity markets moving to the downside. Big questions over whats happening with the u. S. Election overnight. The story is that u. S. Intelligence suggesting that russia and iran have attempted to interfere in u. S. Elections. This is headline grabbing. Questions about whether this will be a contested election or outcome. That is something the market is focused on along with the ongoing conversations about will say, wont they. It looks increasingly like wont they in terms of u. S. Stimulus. Weve got the dollar gaining in that context. Asian stocks down. Futures looking weaker. Pretty risk off. The u. S. 10 year yield stays above thats 0. 8 . Lets get into a conversation about these markets with laura cooper. It is pretty risk off. Is that the link between the u. S. Intelligence story . It makes people think, is this going to be a contested outcome . That has been a concern for many months. I think that does nail the issue on the head, the fact that this election meddling is throwing a wrench into an already choppy stimulus headline ride into the november 3 election day. Weve seen markets price in a blue wave, just looking at what we have seen in terms of the rate market and how we are seeing equities perform. The fact that we are seeing this potential risk thrown in those widen the tail risk of a contested election. That could even spur greater volatility heading into the final days of the election. The u. S. Authorities responded quite quickly. That could provide that could temper those fears. It does elevate the risk of markets failing on election day. Matt i want to get back here to europe. June German Consumer Confidence dropping more than expected. The estimate also was for less than a drop of 3. 1 . Nowhe economy looking worse in europe then we had previously expected . When we look at highfrequency activity gauges, we are seeing the recovery stall below the prepandemic levels. The key risk Going Forward from these rising cases is less about the restrictions impeding Economic Activity like they did during the collapse earlier this year. More through confidence channels. Like we are seeing in germany, this deterioration in sentiment. That could spill into both household and business spending. That ultimately could challenge the more mediumterm recovery. The fact that we are likely to see greater liquidity injections coming from the ecb likely in the form of bond purchases, we are seeing upbeat earnings. Hat is providing a floor we are not going to see a catalyst to the upside on the backdrop of this uncertain Economic Advisor meant. Environment. Anna breaking news on the subject of iags in the aviation space. Breakevenexpecting net cash flow in the Fourth Quarter. Recent bookings has not developed as previously seen. They expect Fourth Quarter capacity to be more no more than 30 . From other this aviation businesses. This is a sector that is in the crosshairs. There was better news on this front out of the u. S. More and more people returning to the skies. How has their earnings picture been shaping up for you . How is that impacting the market speeds . Certainly, when we look to the u. S. , more companies are raising guidance which is a positive portend. We are seeing earnings beat come in at around 85 which is the highest since the bull market began in 2009. It is quite early days. The key messaging right now is we are likely to see this narrative of this case shaped recovery continue. That is tech, Health Care Sectors that are benefiting from the pandemic likely to outperform whereas these more cyclically exposed Consumer Sectors Like Airlines will continue to struggle until we see signs of stimulus coming through the u. S. , potentially Loan Loss Provisions easing in terms of bank exposure. Those factors are likely to find some lift. Not in the near term. I would expect to see this divergence persist. Matt laura cooper, thanks for joining us. Bloombergs mliv macro strategist. You can reach out to us and the team if you would like in terms of the question of the day. They are asking of gold trades are a safe haven or a risk asset. When i look at it, it doesnt look like it trades at all compared to bit point. Lets get the first word news from laura wright in london. Laura thanks. U. K. And eu will resume talks over a postbrexit trade deal amid growing signs an agreement is in sight. The negotiations will begin in london today. It comes less than a week after president Boris Johnson suspended the discussions, saying the eu would not compromise. There seems to be further progress on a stimulus deal in washington. Senate republicans are continuing to raise objections about the size of the package. A spokesman for nancy pelosi says democrats and the white house are getting closer to agreeing on legislation. They floated the idea of a final vote on the stimulus after election day. Sources tell bloomberg a participant who died during astrazenecas covid19 trial in brazil had not received the companys vaccine. They cannot comment on individual cases but Oxford University says it has no concerns about safety. In the u. S. , the Vaccine Program expects trials to restart as soon as this week. The International Monetary asia faces a long road to recovery even as china leads the rest of the world. I put in the asiapacific region likely remaining below the prepandemic trend over the medium term. Its warning of significant Downside Risk for the most vulnerable. Global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much. Irang up, the u. S. Accuses of targeting voters in a meddling operation. The director of National Intelligence says the Islamic Republic faked messages intimidating democratic voters. We discussed, next. Anna on the busiest day of the Third Quarter earnings season in europe, we take a deep dive into the luxury sector. This is bloomberg. Matt welcome back to Bloomberg Mark markets. We are 48 minutes away from the cash trade. American intelligence officials have warned of foreign interference with the u. S. President ial election. The director of National Intelligence John Ratcliffe says that iran and russia obtained Voter Registration information that was publicly available and used that to send threatening emails to democrats. We have confirmed that some Voter Registration information has been obtained by iran and separately by russia. This data can be used by foreign actors to attempt to communicate false information to register voters. That will probably be a topic of conversation at the final president ial debate tonight. Joining us to discuss is jodi schneider. Thatetails of this are radcliffe says the uranians were sending threatening emails to register democrats, purportedly from a right wing, racist group, the proud boys, threatening them. Is that the idea . Ans thinkans irani that they wont go to the polls. Jodi i think that is what he is saying. It is hard to tell. Theres not a great deal of detail. Hes basically accusing iran of making its most direct effort to interfere in the election, saying they faked a series of intimidating messages to democratic voters. This is the argument hes making. You are right. With the proud boys, that is what he did not offer details. Of being behind those threatening emails that have been sent to democratic voters that are purported to be from the crowd boys proud boys group. Its all a little bit farreaching, far afield. This is what the director of National Intelligence was telling us in a hastily arranged press conference. He was also joined by the fbi director christopher wray. Anna its complex. Why did this announcement get made now . As you say, it was hurriedly put together. Jodi they pushed out this announcement while President Trump was speaking in a Campaign Rally in north carolina. Apparently, according to a person familiar with the matter, the interference was about to be reported by at least one News Organization and this person says that the white house wanted to appear transparent. Another person said that the white house and radcliffe made the decision together. Apparently, they thought, we have to warn people about this now. At the same time, weve heard from nancy pelosi that democratic speaker of the house and adam schiff. Warning that we cant allow voter intimidation or interference efforts to silence voters voices. They were saying, everybody vote anyway. Dont worry about this. Anna the iranians and russians, what is a saying in response . Jodi we have not heard a lot from the russians. Irani and officials rejected this accusation and went ahead with a decade old complaint. Saying, unlike the u. S. , iran does not interfere another countrys elections. This is what they often say. To ourhanks very much Senior International editor jodi schneider. Lets get a Bloomberg Business flash with laura wright. Laura tesla has reported its fifth consecutive quarter of profit and it remains on track to deliver 500,000 cars in 2020. Weaker sales and the rest of the global auto industry. Momentum for the ecard giants inclusion in the s p 500. Elon musk says it was the companys best quarter in history. Exxon mobil is planning a number of layoffs. It did not specify how many. Oil prices are forcing the company to delay major projects. The chief executive is also mounting and expensive defense of fossil fuels, saying they aid in global prosperity by making energy affordable. Florida is lowering its Biggest Hedge Fund name yet. Moving billion firm is its headquarters from midtown manhattan to west palm beach. It joins a growing list of funds moving to the sunshine state. Florida has no individual income taxes or Capital Gains taxes. Thats your Bloomberg Business flash. Matt thanks very much. Coming up, an unprecedented amount of money pours into blank check ipos. Is the craze coming to an end . Is it a craze . Who knows . We discussed next with the head of private financing markets at ubs. This is bloomberg. Anna welcome back to the European Market open. Futures look fairly sluggish. U. S. Futures also pointing to the downside. Is the blank check boom losing steam . It took markets by storm over the summer. Names from the oakland september, then 8. 4 . Has retreated companies that choose ipos rose 12 in that same time. Where did this phenomena and go next . Lets talk to isabelle toledanokoutsouris. Good morning to you. Nolicly traded but with operations and assets to speak of. Where does it go from here . Isabelle good morning. Thank you for inviting me back. Always a pleasure to be on your show. I think public and private markets are more and more intertwined. Seen a lot of investors turning to private markets. Thats more on the credit side, of course. Thats more on the equity side. That is not a new phenomenon. Its more a u. S. One than a european one. Whats very interesting for the markets that we focus on in the private side is that it provides new exit opportunities to companies. Where does it go from there . Focus on bothof sides. Chasing ahem are similar direction. That is why they go into more and more earlier stage companies, which is an interesting trend. Matt is there just that much money out there . Yieldsproblem that debt are so low and expectations for stock games theres volatility expectations there. Does this make more sense because weve all been pushed so far out on the risk spectrum . Isabelle good question. Assetsfixed income yields 2 or less. Finding yields is a difficult exercise for investors. We know that yields will stay lower for longer. Yields,s will look for as i said. Investors are trying to bank on trends that will accelerate in the future. More longterm trends. You have to go into the private market with more Disruptive Companies in order to be able to capitalize on that. Anna where is private capital flowing through most easily . Is it the sectors that you might expect . Are they proving to be hot properties . Anything thatrly, investors think will benefit from changes, longterm changes in our lifestyle, where changes will be the largest. The ones that you named. Health care, clearly. Greenback is also going to be a clear area of focus with the over the next seven years. That will have a large impact. To moreo responds awareness and a shift in consumer trends. Cloudbased technology, 5g. All of these longterm trend drivers have been the ones receiving cash, for sure. I think you mentioned the ipo earlier. Perform ist they also being positively supportive of that trend. Right. Ll when you look at this being more of an american trend, we see names like bill ackman, how much of it is coming here with people like Sergio Armani . Isabelle good question. In europe, we see more and more interest. In general, i would say that theres a lot more u. S. Money that is coming towards European Opportunities and debt. Think we have very Good Companies that have been shown to be resilient and that have been probably less expensive than u. S. Ones. In that search of value and growth, europe is attracting foreign money. Matt thanks. Fascinating. Yeah . Isabelle sorry. I was just going to say, europe is still assertive. We have a long way to go. Matt oh. Hopefully europeans are even giving money to great baseball names like billy been. Thank you for joining us. Isabelle toledanokoutsouris. Welcome back to Bloomberg Markets european open. Half an hour to the start of equities trading. Lets get the bloomberg first word news with laura wright. Laura a top u. S. Intelligence andcial is warning iran russia are attempting to interfere in the president ial election. The director of National Intelligence says they already spreading false information to american voters. He will call on people to be toilant and not allow them have their intended effect. The eu and the u. K. Will resume talks of her brexit. Negotiations will begin in london today. This comes less than a week johnson suspended that discussion, saying the eu was not willing to compromise. Nigerians are defying a curfew after Security Forces cut down on protesters in africas most popular city. Hundreds of young people return to the streets in an ongoing demonstration against police brutality. They have set tires on fire. Amnesty International Says at least 56 people have now died a midst the violence. Global news, 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you. Your wright in london with first word news. Lets get your morning calls. Juliette saly joins us out of singapore. We will kick it off with election calls. Firm sayssays one election fears could be a buying opportunity. Juliette this is Morgan Stanleys chief equity strategists mike wilson, who correctly called the correction that we saw in september. He said many are saying that if we do see this contested election, he is thinking we may not get a clear winner until thanksgiving. Buying opportunity to dip into the s p 500. He said no matter who wins the election, they will unleash more economic stimulus and that would drive asset prices higher. But until we know a clear election winner, markets could get defensive. Three weeks for investors sentiments to be rattled, but he says that could be your buying opportunity. Profits forbout clean energy and the link to the election . Juliette this is a call coming through from schroders. They have an hsbc webinar that auld that we could see reversal in environmental policy if there was to be a biden victory. That could be good for some of the clean and green energy stocks. Is saying they could reverse most that we are seeing under President Trump, particularly regarding offshore drilling. That could be more meaningful towards clean energy. The pandemic has brought to life to considering the natural variables, and some of these social and est factors. Esg factors. In singaporee saly with morning calls. Also, high on the list to watch out for this morning. Results from the luxury sector. We thought we would bring an expert advice. Asy continue to grow consumers regain an appetite for products after lockdowns. Revenue growth resumed in asia, including japan, led by the appetite of chinese shoppers. Europe and the americas sought revenue fall. To the investment manager in the luxury brand fund. Headline o the headline from hermes, that says its the biggest ecommerce. It could be a big test at the rate at which they could switch to that channel. Sector unlike others, but its been a little more reluctant to embrace online out of fear that the channel was not suitable for high ticket items. The pandemic has grown thrown that out of the water and its many have blown out of the water when it comes to ecommerce. The are we going to see houses that work ecommerce the hardest do best, or why is there ans death h hermes standout performer . It goes beyond its embrace of ecommerce. Its a very supply led place because of their weight because of their waitlist, they pretty much sell everything that they produce. That is behind its unique success. Ae rest of the sector have long run. The luxury sector earnings 12 of revenues from the ecommerce because of covid. Weve had five years worth of online penetration occur for a matter of five months. I think the opportunity ahead for ecommerce is significant. That it will further polarize the winners and the losers within the sector. Some companies will better capitalize and be better able to invest. Those that arent or have to rely on things that may not offer them the best returns. That i was surprised reading a reference to handbags. I wouldnt have thought that buying a handbag, given what you mes, would have been on top of peoples luxury list. Or you referencing their capitalization trend in fashion. Those the areas that we are seeing for other luxury names . Are those the types of products that have been doing well . Definitely Home Furnishings is a theme recurring across luxury. Consumers are spending more time at home. But theres another element. For a lot of whitecollar professionals, it has gone up that has allowed them a little more availability to ingold indulge themselves in things they might not have otherwise done. There is some meaning meaningful activities that appeal of leather goods, particularly particularly in ds. Ck cli ck click bran there is a clear bifurcation emerging between the brands in those positions and between the lines that could be left behind. Matt as we see new record level infections in different European Countries every day, how does that affect the outlook for these. I could imagine investors saying, i want a perkins baguette now i can go outside after lockdown has ended. But has the opposite ended when we get more worried about covid . Cohort i think the key is the chinese consumer. They drive over a third of the luxury industry. This year it will be significantly more. They are driving virtually all of the growth. These two cohorts have remained healthy. Early signs are that they are going to remain for the rest of the year. If we look at the numbers this areing, they said they expected to remain quite elevated through the end of the year. A concern because of the demise of longhaul travel particularly from asia into europe has luxury brand sales in the market. Signse consumer has shown of reengaging with luxury the fears that were reported last week. Indicated that outside of the core torah city capital, their engagement remains quite high, which is an interesting point. Anna what about consolidation . How much of a theme is that . Swetha i think that particular incident with the legal proceeding underway, this is a fact that is right this is an effect that is right for fragmentation. The top three brands have less than 5 Market Brands each. Between why this gap the winners and the losers is set to polarize as we continue. I think the next six to 12 months is these companies understood what it means to. Perate under the lockdown this will provide meaningful opportunity for consolidation in the next 612 months. Matt you mentioned ferrari, which i love. I wonder how many luxury covering this carmaker . , and seen as a luxury good do you think other carmakers want to are trying to . For example, asked in march and aston martikn coul join it it . Artin could join swetha aston martin has been on the brink of bankruptcy nearly seven times. Its consistently over 30 , which is very much in line with luxury margins rather than auto sector margins. Thata supply led model relies on long wait lists and producing a car to the consumers is very much intact and growing and appealed to the pandemic is a Company Reports record high waitlist. Asyou look at valuation well, its trade very much in line with the Luxury Company rather than an auto company. This this seems to be a secret for doing well in a pandemic. Hank you for joining us thank you for talking to us this morning. The abyss. Aring into we will talk about how European Businesses are doing, the small ones in particular, under pressure. We will try to get an update on whether virus is. We see record infection numbers coming through from germany. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 17 minutes until the start of the equity trading session and futures point to the downside. In particular, in germany. Johannes the European Commission for budget set the block recordbreaking sale of joint bonds is a game changer for the eu, cementing its status as a global issue or that can compete with u. S. Assets. Bloomberg is in brussels and spoke in an exclusive interview. She asked what is driving the market appetite for eurobonds. The fact that it is in europe is another issue. The fact that we have launched, for the first time at a large scale, social bonds. I think its another element, which is interesting for some investors. Can you tell us a little bit bought these in terms of these international investors. Was he european, u. S. Or a combination of all of them . Annes two thirds of the investors from the European Union. Many of them are from asia. Americas,from the south and north, in particular canada. I think its quite a good mixture and we are quite happy. It was definitely hit because it really is a monster option. It was really big the amount of numbers you were able to bring in. Even the appetite that we are seeing, what will the next look like . How much will we see over the next few weeks . What is the structure of what you have in mind . Johannes we are more reluctant about the opportunities we are generating. Toi suppose we will tries raise 30 billion at least by the end of this year. But if its more, its fine. In principle we have tried to split this year and next year. So it could be 30 billion euros. There are syndication through banks. If im wrong, but my understanding is that the European Central bank to start to buy these in the secondary market by the end of the week. Johannes yes. I have to ask you a question. Im curious about your opinion. There has been talk in the market that this has been so successful that you could compete with the riskfree asset for the European Union that many have been purchasing for four years. Do you think you are a competitor . Johannes we are well coordinated with the member states, in particular the big ones. But all the other ones, in order to avoid any unhealthy competition, this is not our intention, we have to work together, in particular in such test times. There should not be any concerns by anybody. When you lookat at the next generation of eu budget, not this year, but next, but they have to have a clear component of elements. But given the fact that some countries it countries have not submitted their budget plans and great detail, how are make sure that they truly are green . Johannes there is our commitment that their recovery in the core element should contribute the expenditures there. Expenditures should contribution of the greendale. Actually more than 30 of bonds. We will issue green bonds. At that response there should be a guarantee. That was the European Unions budget commissioner talking to our own maria tadeo. Lets get the Bloomberg Business flash. Laura exxon mobil is planning a number of layoffs. It did not specify how many. After Lower Oil Prices are forcing the company to delay projects. He isief executor saying they a in global prosperity by making energy affordable. Apollo Global Management is facing a revolt as questions remain about his ties to the convicted sex offenders. They may stop recommending apollo to their clients. Including Pension Funds and endowments. They are also suspending new investors. The booming club of the Acquisition Companies has a new prominent member. The outgoing ubs chief has agreed to serve as chairman. Also investing in industrial. They have filed with the sec to raise 350 million and a listing on the new york stock exchange. Thats your Bloomberg Business flash. Here inura wright london. 12 minutes until the start of the European Equity session. Over half of view of small and mediumsized businesses face bankruptcy within a year. That is according to a mckinsey survey, which also vows that one in five companies in italy and france expect to file for insolvency. Joining us is our economy reporter who has been looking at these reports. Ais is interesting because lot of guests to working Capital Markets have big businesses that have access to Capital Markets. And given the amount of support we have seen for central banks, we dont necessarily to worry about them as an asset class, because a majority can get access to debt when they need it. But it is the small and mediumsize businesses that look at it and could struggle. What does this report say . Over half of europes small and mediumsized businesses say they could face bankruptcy in the next year if revenues dont pick up. That is significant because smes account for more than two thirds of the workforce in the half of themore so value added. Who as youpanies, said have access to Capital Markets and a list of companies, these are Small Companies that who are in a very dire situation. This is contingent upon these companies not getting a pickup in revenue over the next year, as you said. How Many Companies are in dire need of cash . There has been a significant amount of Companies Companies in the six countries who said they could go bankrupt in the next six months. Zoe one in five companies in france said that. The one caveat of the survey is that its conducted in august. In august, if we remember back then, things were still looking better. Obviously the second wave of the picked upurope has much more quickly than probably anyone anticipated. Now, survey was conducted knows what the results wouldve been like. Even back then, 80 of the companies surveyed said they were concerned about the Economic Outlook in europe. That was a top more interesting was germany. In germany, you only had 60 of companies saying that. 40 said they thought the economy was somewhat strong or either very strong. That might be due to the fact that germany has been a lot steadier and companies there are more confident. Ust thank you for joining this morning. Coming to us out of zurich. We are minutes away from the open. We will get your stocks tow watch. Including the worlds secondbiggest distiller. Seeing sales rebound as the drink industry revives. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Six minutes to go until the start of equity trading. The overall pictures market looks to be negative. Concerned about whether we will see a contested election in the united states. Once again that is triggered by the news flow. Lets look at the stocks to watch. We bring and any burger, who has been looking at details of names this morning. Dani we have seen a lot of drink makers start to do better, really a rebound and beverage sales. They see themselves returning to sales growth in the First Six Months of 2020 one. Interestingly, the sales are not only picking up in china, but the u. S. As well. We have this stayathome play having to stay strong. People buying their products to take it home, but also bars and restaurants slowly start to reopen in those regions and they are also seeing sales coming back. Iag what is the story with no longer expected to meet certain targets in this quarter . That target getting to a net positive cash flow in the Fourth Quarter. His comes as more lockdowns take place, more restrictions across europe and they say the First Quarter is the maximum that capacity will get for them. It will be 30 of the level from last year. That is a downgrade. They say that the recent bookings are not holding up to what they had expected. All of that because of the new restrictions. Third quarter underlying sales beating estimates. They do say the operating environment will remain unpredictable. Coming up, it is the market open. Futures on the downside because of concern around the u. S. Election. We get to the open next. 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 a minute to go until the start of cash equities trading. Here are your headlines. U. S. Intelligence officials warn iran and russia are attempting to interfere with the president ial election. They say there was no hacking involved. There are 12 days until the vote. Spain is a first nation in western europe with one million virus cases. As rome considers implementing a nightly curfew. It comes as u. S. Hospitalizations reach a two month high. Stocks and futures retreat. The pound surges the most in six months since the u. K. In European Union have postbrexit trade deal. Just a week after Boris Johnson threatened to walk away. Negotiators arrive in london today. Matt take a look at european futures this morning. We are looking at red arrows. Although, relatively slight in london. Futures are down 2 10 of 1 . Dax futures are down more than half of the percent as we start the live cash trade. You can see the global macro movers. Hillary has left her cursor and the equities index column so that you can see where the cash trade will kickoff. The ftse starts down 1 10 of 1 . The spanish ibec starts down 6 10 of a percent. As these markets start to trade live, that column will populate. You can expect to see red arrows on the continent then you do see in london. Opened upe the cac is 1 . The European Markets are opening lower as a Virus Outbreak worsens across the continent caseserman new virus hitting another record. Greece and italy also reporting new daily infection records. Ome is likely to follow the other italian region, lombardi, a nighttime curfew as soon as today. People are getting more and more serious about this second wave. Joining us now is Jeremy Thompson cook. The chief economist. What do you see in terms of the second wave and how its affecting the economy . Hist starting to really hit this is . We just heard our editor in a half ofur editors the companies could go bankrupt and the other half say they could go bankrupt in the next six months. It depends on which countries you are looking at and the support mechanisms in respect to dominance. Updates froming the chancellor later on today to talk about may be an extension or an enlargement of the economy because obviously the signs and the businesses are very worried. Wall it supported the first wave, it may be more fiscally during theernment winter. The second wave actually be the test of how supported governments really are. Everyone knew something would happen with the first wave, a virus, the pandemic. Livingng no one in memory has seen. Whether people learned lessons from the first wave will become particularly clear. Anna good morning. Are you expecting to see much more variation across europe this time around, in terms of how each individual government ds . Ponse . Respon yes, we are seeing the more socially secure governments starting to move. They are just waiting to see exactly how the second wave hits, how large this wave is and how big of an affected has on the cost of the economy which has been able to go back to work. Sector has been particularly hard hit over the course of the spring and summer months. So we know the residual impacts their but for manufacturing for example, they have been able to go back to their place of work. It seems the European Business leaders are coming together and working out that it will be tough regardless of the stimulus. There has been offers an hopefully other governments see this as well. Matt which industries do you see that are better prepared for a second wave . It does seem like markets are giving autos the benefit of the doubt. The k shapedook at recovery and you look at exactly how businesses are reporting earnings. Businesses have been able to weather the storm over this course and deal with the pickup revenue from consumers who had stimulus checks in their pockets. Able to bring in demand into the business because people had money. And also as you said, those are the ones people are going to be focused on. Hospitality, the airline sector. We know that European Tourism obviously falls off a little bit over the course of the winter months. See bailouts over the course of the next couple of months, it could be a really tough time. You will see a type of divergence within it european sectors. As an economist, how would you invite governments to think about viable jobs . There are certainly a loss in the u. K. , but it mixes up things. When people talk about jobs that are not viable. Talking about sectors facing structural longterm challenges and sometimes we are talking about jobs that are in trouble because of the pandemic and will no doubt be viable on the other side. I guess we need to find new terminology for this. Its not a particularly kind way to put it. Sentiment outhe of it obviously looking at jobs in the cost of the economy in the short term and in the longer term. Washing f people watching, they will say, what were you during during lockdown . Could not sayi from an economic point of view, we need to see the one thing i would say from an economic point of view, we need to see governments invest. The investment from the government that they are able to put behind these businesses will make those jobs viable in the longer term. And job is no longer viable we will no longer fund your industry because you cant do that in the midst of a pandemic unless you are getting some form of program, which is obviously lacking in fast economies. There will be structural changes. But the level of support that is available will be seen. Mac do think that europe means more fiscal stimulus than now . So much attention has been paid to the u. S. And we know what we dont know there, but here in europe you just dont hear a lot more about it. Inman its an important thing to realize. If we are seeing fiscal stimulus. The europeans will eventually have to come to the party as well. I think the way the market is a safetyt it now is net. There is a lot more within european economics and european politics. So we do see a push towards the need for further fiscal support, but it will be easier. Europe is going through one of the most divisive elections we have ever seen. And wish not been used to beat up the other side of the argument. We do have ecb support later in the year. But that tag teams with further fiscal support and that goes to upper belief that the euro will be very interesting for the course of 2021. , stayJeremy Thompson cook with us. Lowering the bar. Should investors be celebrating earnings beating expectations . Trying to tally up the backward looking numbers in the forwardlooking outlook statements. We will get into that conversation. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 11 minutes into trading session. We have had an earnings report. Is a sectoredger under pressure. The winter that lies ahead. The dax in the cap down a little bit more than that cac down a little bit more than that. Laura growth accelerating in the Fourth Quarter german bride demand for Hygiene Products and comfort food. That trend amec saw sales of ice cream with ben jerrys sighing in increase in underlying sales. Results from other consumer companies. Florida is lowering its Biggest Hedge Fund name yet. Forcing its Elliott Management to come up to 31 billion dollars and its moving its headquarters from the town manhattan to west palm beach. It grows a joins a growing list leaving the franchise state. Statee has no individual taxes or Capital Gains. Exxon mobil is planning a number of layoffs and enough to start but did not specify how many. Oil prices are forcing the company to delay major projects. The chief executor is also mounting an extensive dissent of fossil fuels, saying they ate in global prosperity by making energy affordable. That your Bloomberg Business flash. Anna todays the biggest day by total market cap. But should investors celebrate companies that Beat Estimates . If the company had expectations that were pessimistic, let me talk to Jeremy Thompson cook a little bit more and bring him back into the conversation. European equity markets under pressure today, that there is big macro themes around the u. S. Election and we will get to that and just a moment. In terms of your reflection on the earnings season, i was wondering if we might get ok backward looking numbers, because things were rebounding in the last quarter. Within very pessimistic outlooks. In some sectors that has comes apart. Some are still under pressure, like aviation. But in others, maybe the pessimistic as somewhat look at. Mechanismse support where governments were running businesses that were able to start positive. The further outlook is depending on the business moving forward and if they will be mixed. How theg is expectations have been beaten and very rounded in some circumstances because of the pessimism that we have seen from the investment community. Some sectors have been outperforming. The crucial thing that we are going to see in a couple of weeks or so is, are those sectors that were able to benefit from the consumer cohort or a business cohort that was a belief supported. Then you will be able to see moving forward should that support continue. We have always talked we have already talked about consumers, but we are also talking about the luxury side of things. And they look very, very set for continuation. Matt wendy you think we are going to see fullyear earnings get back to 2019 levels . For example, here in europe. Themy you tie that towards overall Global Economy is likely to be performing. That is your precoronavirus prices. So its at the end of next year and the beginning of 2022. That would be set is that you are looking for an overall picture and you have to at least price 12 month on to where we are currently. Overseeing what that is depending on movements in vaccine technology. Aboutr now, taking things where you have a vshaped. It seems as if overnight we are back to worrying about whether this will become a contested election result. As we saw it and emerging between the two contenders in the polls. He bar less concerned about that. But given the latest news around the possibility of interference, thats what put this idea about contested outcomes of the election back on the table. Is it that nervousness that is hitting the markets in europe . Jeremy i think there is a little bit of that. In the short term, talking about next week or so, the stimulus argument of whats going on in washington has a lot to do with the longerterm election cycle. I think the market is continuing to price in what we are calling the biden lock, which is the Senate Scenario being stilled held by republicans with biden is president. Is Donald Trump Holding on to the presidency and the senate. As we continue to see markets pricing the blue wave, which we have our doubts about, then the u. S. Dollar will continue to weaken. If its a blue wave, we think about the scenario where scenario whether the monsoon can turnnd we see the election pretty quickly. Its the central scenario of the Republicans Holding onto the senate and losing the white house that could be the most problematic. Matt is at the reason you have your doubts about a blue wave . Do you think it will not go the democrats weigh both in the white house and the senate . Jeremy i think there are some senate races, if you look at the national race, it does seem very that donald trump has a Herculean Task to bring voters back onto his side. Whereas democrats need to hold on to every single seat. If there were two states that i would say we had to Pay Attention to, we would be looking at the carolinas, maybe montana. We have our doubts the democrats will be able to make gains in those parts of the world. But if they dont, then you are back to a 5149 look. Then the biden first two years or going to be gridlocked by a very antagonized republican senate. Anna thanks for explaining your thoughts on that. Jeremy will be continuing his conversation with matt and i at 9 00 a. M. , u. K. Time this morning. 18 minutes into the trading session here in europe. Coming up, tesla beats the profit and reaffirms its goal to deliver 500,000 cars in 2020. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Markets areity under pressure, down over 1 as a whole. We have seen the fourth days since the dax took a slide. Auto is under. Tech stocks fall. Lead those on the downside. Straightorts a six quarter of profits. They reaffirmed its on track to deliver half a million cars in 2020, despite weaker sales in the rest of the global auto industry. We do look for lack for a few affordability. We have to improve that so it is not out of reach of people. We want to improve that over and also our cost of production. Us is ouring bloomberg reporter who has been following the story closely. Give us details on the numbers during this earnings season. Good morning. We should mention that elon musk, who has not always enjoyed this, was in a great mood after what he said was teslas best quarter in history. Margins and operating margin saw growth. There was a lot of talk about integration. Tesla makes a lot of its own cars and that separates the company from utter from other automakers. And in the pandemic has devastated all the sales elsewhere. I cannot just skate past the beautiful coincidence that icola and youn cover tesla appear just want to mention that in case viewers are laughing. About this quarter, the Fourth Quarter, what is the outlook for tesla now . No relation to any of the electric car company on my side. Target,the 500,000 car tesla needs to ship more than 181,000 vehicles the last three months of the year, which would be a 30 jump over the previous quarter. Analysts forecast another time of profits, but of course projections are difficult for the global market, given we are in the midst of the pandemic. Anna tell me about regulatory credits . What do they mean for the easy v maker . E may credits for those who need them to comply for emission standards. They are big part of the companys earnings share performance. Sales of regulatory credits have declined comment investors still see that revenue as a double edged sword because can want to know that tesla be profitable from its core business, and that is making and selling cars. Ust thank you for joining this morning. He covers tesla for us. And remember, its an important story for berlin because tesla is building a plant right out of the city and expect to make cars theyre starting next year. Not really slowed down too much by the pandemic. Really key for the german economy, as well as the global car industry. Lets look at your other movers. U. S. ,rebound by 6 in the 4 in china, double digits in india. It looks like people are back to drinking products from the worlds second largest distiller. Unilever is down. There was an increase in underlying sales boosted by cleaning products and ice cream. But it was not enough to bring the stock higher on a day when Everything Else is falling. Sap is falling as well and is following suit. S. A. P. Taking the most points off of this off of the stoxx 600 index. Even though its based in tiny little waldorf, germany. Here you see the stoxx 600 tech sector down. The bank sector is down. The auto sector is down just about 1. 9 . Everything is moving lower. And i believe today is the fourth day in a row for the stoxx 600 to fall. It has been a rough week losing 3 so far this week. Anna and these are not small losses. Stoxx 600 down by 1 . You mention some of the tech names under pressure. The likes of sap. But also the auto sector under pressure. Bmw is down by more than 2 . So all of that adds up to some difficulty on the dax. Unilever, you mentioned the numbers. They are better than anticipated. The stock is now a negative territory, but it is outperforming. So the overall market should point that out. To sell to somebody over the lockdown time. , trackingshort break covid in the workplace. Could a 10 minute test be instrumental in getting people back to work safely . We will speak to one company that seems to have some answers, next. This is bloomberg. Anna welcome back to european open here on bloomberg tv. We are down the stoxx 600, down , dax, but wer are all down, essentially. Technology coming under pressure, in fact, health care also down 1. 2 percent. Only travel and leisure on the upside, which might be slightly surprising, it given what we have heard from British Airways thatag today, given how particular stock performed out of the gate, but others in the leisure space moving to the upside. Lets get a bloomberg first would update with laura wright. In agreement and site. Negotiations will begin in london today with an accord by the middle of november. It comes at less than a week after Prime Minister Boris Johnson suspended the discussions, saying the eu was not. Willing to compromise. The first sign of progress on a stimulus deal in washington, but Senate Republicans are continuing to raise objections about the size of the package. A spokesperson for Speaker Nancy Pelosi says the house and white house are getting closer to an agreement. They will hold off on a vote until after election day. Has tell bloomberg not received the companys vaccine. Its partner, Oxford University, says it has no concerns about safety. Program. S. , vaccination warp speed said it it receives if it receives a vaccine from Johnson Johnson and astrazeneca, it will start this week. Peoples of young returned to the streets amid ongoing demonstrations against police brutality. They blocked roads, chased cars, and to set cars on fire in nigeria. Amnesty International Says 56 people have now died amid the violence. 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. I am laura wright. This is bloomberg. Anna, matt . Matt laura, thank you very much, laura wright in london with your first word news. As people returned to offices, Companies Face a challenge of limiting virus infections in the workplace. A Service Launching today wants to offer a solution. Pocdoc has unveiled a prick test that gives results in ours. Joining us as steve roest, pocdoc ceo. Firstcome to me, about the uptake that you expect. Everyone wants, i am sure, results for a covid test in 10 minutes, but probably not many people want to prick their finger on a daily basis. Steve thanks for the time. Digitallyenabled Rapid Testing is the solution we need, and that is what pocdoc provides. We provide everything the employer needs, the tests, which provides the result in 10 minutes, the staffing, the logistics to come in and do everything you would need, and we provide the technology to provide the data and dashboard back. In terms of, you know, whether their want to taprick finger or not, we have tested this thousands of times, and generally, that is not an issue. Imagine if you have to write on results from testing 100 people on a bit of paper, that is impossible, but really our pocdoc solution is the final key to unlocking Rapid Testing. Some digitalenabled Rapid Testing is really the only issue to getting us back into the workforce. Anna good morning to you, steve. We are talking about the way that you see testing fitting in with an ability to mix. A lot of people talking about testing as a path forward to be able to mix, to return to the office, to be able to take a plane, to be able to go out and socialize, perhaps. But the thing about testing as you have to keep doing it so regularly to materially give confidence. Is that something you find is an issue for some potential customers . Steve so we are in intense discussions with airports and airlines and leibowitz about rolling out our pocdoc Testing Solution to keep people traveling, reduce the quarantine period, and help get fans back into events. We believe our solution is affordable, say from 10 pounds protest, it is available now. We have hundreds of thousands of tests that are literally to go right now, it is accurate i 98 , which puts it at the top end of accuracy in the world of tests. We are ready to roll this out today in workplaces, and we recommend regular testing. By providing this allin solution so the test itself is not enough. You need to test, you need to staffing and logistics, and you need the Technology Platform to capture the data and provide it back to the employer in a valuable, easily visualize way command that is what pocdoc does as of today. Matt it seems like to me, steve, that airports would be the killer app for this. I am trying to get my parents in for a visit from ohio to berlin. It is incredibly complicated. They might need to take a test there and then also take a test here. Quarantining would be necessary. But if they could just show up at the airport and take a test at the gate, wouldnt that make everything so much simpler . Steve absolutely. It takes 10 minutes to order a coffee at starbucks. It is the same length of time to get yourself tested with our test, get the results immediately. And those results, by the way, collected by the digital, could be immediately updated into the airlines systems or the airports systems, to track that automatically. Anna i suppose some people argue, though, because of the way the virus lays dormant, if that is the right word, you are not then free to just mix, because you get one good test. But what about scale and here, steve . You say you are ready to go, but how ready . How many people do you have on standby . Steve we have hundreds and hundreds of tests hundreds and hundreds of thousands of tests that are ready to rollout. We are in the u. K. We are in germany. Germany is an extremely attractive market that is next on the agenda. After that, we can rollout across europe easily, because the test itself has approval across europe, so we are scaling as quickly as we can, and all that employers need to do is go pocdoc. Co. Uk, and we can come to their place of work as early as today. Matt steve, it seems like the chinese and other Asian Countries have taken care of this pandemic brilliantly, because they do not need to worry about data privacy. Course,the west, of everyone is concerned, or at least makes a lot of noise, about data privacy, especially concerning health. Is that an issue that you have had to deal with as well . Steve yes. We have solved in a unique way. Instead of that account, we have created a unique encrypted qr system, so when anyone comes in the system to be tested, they are issued a unique qr code, which creates a unique record for that person anonymously, and that is how we solve the data privacy issue. Anna steve exactly. On the backend, we have our Cloud Systems that can integrate with hr systems, can integrate companiesrities and to ensure they get that data, but on the ground, our testing staff are trained to provide direct diagnoses to people who test positive with a triage partner, with recommendations about what they do, so that those people can then be dealt with immediately, and either, you know, isolate or other measures. So we do both, basically. Anna ok, thanks very much, steve. Interesting story. Thank you for bringing it to us. Steve roest, pocdoc cl. Investing in liquid gold, increasingly, number of directors or turning to whiskey to hedge against covid19. Of next, we talk to the ceo of Whiskey Wealth Club. This is bloomberg. This is bloomberg. Anna welcome back to the European Market open. 41 minutes into the trading session. Markets firmly in the red but have recovered a little bit. Apollo Global Management has announced investigations into leon blacks ties into Jeffrey Epstein. More formation emerge about its cofounders ties to epstein. Joining us to discuss is dani burger. What are the details on the investigation . Dani apollo yesterday filed with the fcc, and leon himself asked this independent investigation, so they will hire an outside law firm. In the companys own words, the law firm will reveal any concern about what leon black has already said about his relationship with epstein, that it was professional, and apollo itself was not involved. There are no dealings between epstein and apollo. This renewed scrutiny came about because of a New York Times story last week. New york times saying leon epstein money after epstein was arrested for soliciting prostitution from teenage girls. Ant seems to be investigation of the nature of the relationship between black and epstein. That 50 of course, million is the bottom line here. Leon blackn is, did or apollo wire Jeffrey Epstein 50 million, and if so, for what reason . That is the kind of thing that freaks investors out, because it seems unlikely that Jeffrey Epstein would have offered apollo or black 15 million worth of services. Dani yeah, exactly. Again, we do not know the nature of the 50 million, bud black himself has been really adamant, and apollo, for their part, that this is between leon black and epstein. This has really turned from a reputational issue for leon black to a financial issue from apollo. They have had two Pension Funds, a connecticut and a pennsylvania one, saying they will not connect new money to. Apollo. They are not withdrawing money they have, they are just not adding new money. An edge another company says it may stop recommending apollo. Even though we do not have the details of exactly what happened here, theres a lot of politics they have to deal with, and it does not look great to be involved in a firm whose relationship with Jeffrey Epstein is perhaps questionable. Again, we do not know that by any means for sure at this depend but apollo does on raising multibilliondollar going,o keep the ship and leon black himself is someone who is acutely aware of this. In their last investor call, when he was asked about his relationship with Jeffrey Epstein, one of the comments he made to that was to say, theres nothing more important to us than our relationship with our investors. Matt, anna . Thank you. Dani burger bringing us that story in london. If you are looking to alternatives to hedge against, you may not have to look much further than your whiskey seller, if you have one. The creator of Whiskey Wealth Club says whiskey as an investment is becoming increasingly appealing. And a new report, they say investors are willing to whiskeyn premium irish or scotch whiskey. Joining us as jay bradley, whiskey a wealth Whiskey Wealth Club cofounder. You invest in a whiskey that is elsewhere. Tell us about how investing in whiskey works. Jay so obviously, the distilleries are making newmade whiskey for a certain period of time before they can turn a profit on that when it matures. So a certain percentage of what goes toe initially investors, so we come in and we buy a large percentage of that to then be able to sell on to our clients. Helpseah, it basically distilleries be able to cover their cost, theyre running costs, keep the lights on, while they are waiting for whiskey to mature that they have already made that year. Matt so is this only irish and scotch whiskey is . Big intoe japanese are whiskey now. Personally, i am a big fan of kentucky bourbon. Our investors limited to those two countries . Jay no, right now, they are there to whiskey as we focus on at Whiskey Wealth Club. There are people in the bourbon markets. Faster. Matures a lot but, yeah, as far as japanese whiskeys, it has gotten a lot of press and media over the last five and six years, winning some awards. It is a phenomenal whiskey, very high made him a very highquality, much like scotch and irish. The scotch and irish with that market is a very wellestablished market, and the japanese is what we call emerging market that we will move into for our clients in the near future. Anna and how has the pandemic changed investor behavior than, jay . Jay i mean come up with investors, what we found in dealing with investors come in fact, the pandemic, much like 2008, everybody has still not forgotten, the pandemic reminds them of what that was like. I think it is looking to something a little bit more off the traditional Financial Markets that tend to be common, stable, and have volatility, whereas the three things, the age of the whiskey, the challenge of the future, but more importantly than just ages the brand associated with it and the amount released that year, so it is very different with the lights of, you know, stock shares, currencies, that sort of thing. Anna we have seen matt we have seen, jay, that luxury items or things incredibly short in supply still demand top dollar, you know, in a recession. So what kind of prize class are we talking about for a cache of really highend, soughtafter whiskey . Jay that is a great question. A lot of whiskey starts around the same price. Some brands you will pay more for. For might be selling 5,000, 10 thousand dollars, whereas we will come and buy in bulk, and put it at 3000, for example. Massproducedine, facilities that make 10 million liters of whiskey a year, they did not sell for as much in the future, whereas Something Like a whiskey,that same aged you might buy it for 2000, you might be a lasala for 15,000, whereas if you had something that is 20 years old, you can get closer to hundred thousand dollars for it. Have things that we have to deal with come up with brands like that myself or 80,000 or 90,000. It is important you do not buy makesm someone who millions and millions of whiskey a year. Brands that sit on shelves that people want to drink because they are familiar with that brand, that is where their value lies in. Anna jay, thank you so much for bringing us this story, jay bradley, Whiskey Wealth Club cofounder. Coming up next on the bloomberg, shifting from the output to the fundamentals in germany. What does that mean . We will talk about that with ricky jones, bloombergs mliv market a rate strategist in berlin. This is bloomberg. Berlin. This is bloomberg. Bloombergme back to markets, this is the european open. Minutes into the session 50 minutes into the session, the stoxx 600 down, as we recall, for the fourth day in a row. Every single day so far this week. Joining us now is richard jones, bloombergs mliv rate strategist , hiding comfortably and safely away in berlin. Richard, i assume that you are, you know, keeping your social distance, as we see cases here get, and some cases, outofcontrol. Hitting new daily records in many countries across europe. Pandemichat this what is bringing the stoxx 600 down . Richard yeah, to answer your question, i am working from home. Those german numbers overnight are almost shocking. Almost a 50 rise in infections versus the previous day. And i do think that is what is weighing on the european equities, and i also think it is something that is going to europeanto weigh on bond yields, especially german bond yields. We will pick up momentum again. I think the focus will shift away from the global inputs that we have been seeing over the past week or so and focus back on those deteriorating, domestic fundamentals. Thean, since friday, we had 10year german yield pushup about three basis points, and i think that is largely because we have seen a move higher in u. S. Treasury yields. But i think that has been a relatively modest retracement, and i think the yield has been near the sevenmonth lows that we saw last week. I do not think bunds will be able to ignore the realities of the deteriorating hard data that we have seen in the euro area. That German Consumer Confidence data that we saw this morning for november, it is at the lowest level since july. I think that sort of data releases that we are seeing, in addition to the hard data, is a clean a key driver over what has been increasingly dovish messaging, and i think it will keep a cap on equities in the near future as well. Anna where does that leave treasuries then, richard . We have seen treasuries above 0. 8 on u. S. 10year yields. From what youve said, if the same pattern emerges stateside, then that does not continue. I think theh, anna, treasury sell if we have seen in the last week or two, i think that can be a hedge space. I think there is a danger of getting sucked into the price action that has pushed up treasury yields. I think, you know, there is fundamental and technical reasons for that. On the fundamental side, i think a lot of the upside we have seen in the yields is due to the markets enthusiasm over the reflation trade. I think that is driven by the idea of an aggressively expansive u. S. Fiscal stimulus, and i think the hopes for that are high. Again, anticipation is palpable, but nothing has passed yet. The u. S. Senate is a formidable roadblock to anything getting passed on the fiscal stimulus side. I think anything will disappoint those u. S. Treasury bears. Matt richard, thanks so much for joining us. I cant wait to see you again, one day, as we both live in the same city. Richard jones, bloomberg mliv rate strategist, my former drinking partner, whom i have not seen an, like, six months. Maybe it is good anna anna for our livers. [laughs] matt i hope you stay safe, richard. That is it for the european open. Anna, we are still down, four days in a row, off on the stoxx 600. Anna absolutely. Richard was talking about the riskoff move, and those german numbers, certainly seeing them on the chart, certainly looking shocking. Also the u. S. Election and whether that outcome would be contested. Surveillance is up next. Matt and i are off to radio. This is bloomberg. This is bloomberg. Yousef u. S. Intelligence officials warn iran and russia are attempting to interfere with the u. S. Election there are 12 days until the vote. Is the first nation in western with one million virus cases, and italy and rome considering and permitting a curfew from overnight. U. S. Hospitals asians, theres too much time here u. K. And European Union resume talks over a