The postelection risk rally faltering. Of good morning, everybody. 7 00 in london. Eight in paris or berlin. Lets have a look at the equity markets. Look like europe this. Negative. This is indicative of what we have seen on u. S. Futures or are seeing. U. S. Futures down 0. 5 . Nasdaq futures off their lows but still pretty negative. We are losing our nerve on Global Equity markets. Three days into this neverending election account it seems, the context of course is important. The rally we have seen must have been forgotten when we look at nasdaq futures, up nine, down one. Lets have a look at the gmm. Going on other things here. Oil prices are interesting, down by just over 2 . Dollar, not all about what is going on the dollar. Inflation trade unwinding. Investors wait, the electorate in the United States waits for the counting to continue. The race for the white house is still too close to call. Counting continues in crucial swing states with joe biden catching up in georgia and pennsylvania and extending his lead in nevada. Pres. Trump it has destroyed our system. It is a corrupt system it makes people corrupt even if they are not by nature. They become corrupt. Good continue to feel very about where things stand. We have no doubt when the count is finished senator harris and i will be declared the winners. I ask everyone to stay calm, all people to stay calm. The process is working. The count is being completed. We will know very soon. Anna President Trump takes no questions after the news conference. Bloomberg report there is no evidence of widespread voting. Important to say that as we bring you those comments. Markets get no respite from the electoral drama. Lets bring in ed ludlow who has the latest on the politics. Talk us through the race. From a topdown numbers perspective, things not shifted in 24 hours, have they . It is still a close race and close we are paying attention to georgia and pennsylvania. In georgia biden has been able to whittle away President Trumps lead down to around 1800 votes, though the Georgia State elections website is not updating at the moment. There are local reports that suggested could be as close as 1200 1400 votes. He is doing well in urban areas. Atlanta, savannah, the counties surrounding them. Clayton county, home to the late congressman john lewis, there are still 5700 votes to count and it looks like joe biden in terms of the mailin ballots is returning 70 , maybe 80 . Similarly in pennsylvania, philadelphia, other urban areas, he is returning a very high proportion of the main in mail in ballots. The gap between trump and biden is around 18,000 votes. When i walked in this building it was around 40,000. Those are the most active states where we expect data throughout the evening or morning your time. Direct route to the white house is nevada. Our current electoral count is 264 provide an bloomberg, but we have not expected any more accounts to come through this evening or morning. We are going to have to wait to get more results from that state. Anna still some concern and confusion about arizona. Two networks called it for joe biden. We have reflected that in our count. Some News Networks have not decided who has won arizona and that explains why different News Networks are carrying different numbers. Is stillatically it possible for trump to come back in arizona. The gap has been tightening the last 24 hours. Statewide it is around two percentage points. Were 60 ricopa county of arizonas electorate lives the mother is still ballots. They expect those to skewed democrat even though the president has been whittling away at the margin. Is theyon one reason counted the election day boat, then the early vote, mailed in prior to election day. What they are now taking into account is the ballots that were dropped off in person on election day. The bet from the Democratic Party is that those will be favorable to joe biden, although trump is still doing well in other more rural counties. On paper he could still do it and the Trump Campaign feel he has a chance. They pushed fox news and the Associated Press who made those calls to walk them back because they still feel there is a transfer arizonas 11 Electoral College votes. So much. Nks ed ludlow up late in San Francisco with the latest details. Lets get into the markets with mark cudmore. You. Very good morning to it seems as if globally equity markets are losing their nerve a little bit. No change in the overall voting situation the past 24 hours, but the senate does look much closer perhaps than it looked on election night. That could be decided by whoever becomes Vice President. What do you think equity markets are looking at . What they are looking at is a chance to sleep this weekend and get a break. This week has been chattering and exhausting for most. At this stage people are pretty confused about exactly which outcome they want. The start of the week it seemed like a blue wave was the most favored outcome for every market. When it looked like a divided government, maybe that is even better because we dont get the regulation and the tax increases that might have come with a blue wave. There is a real confusion. A lot of it has just been position. Momentum at the time. Markets are looking more tired today. Equities have done phenomenally this week. I am slowly suspicious how long this can continue. I dont know about equities, but certainly global news is looking a lot more tired the last few weeks. Let me ask you about the downtrend. Is that intact . Time spannds what youre talking about. The longerterm dollar time trend is intact. In the short term, im not so sure. I think people are complacent in the short dollar position. There are a lot of positions based on longterm fundamentals and i think they risk getting derailed in shortterm volatility. I do not have a strong conviction either way on the dollar. Off the top of my head i might say it is going to go higher, because a little more pain. Anna that will be another reason to focus on the underlying u. S. Economy. Thanks very much. Remember, you can join the debate. Get involved with the markets live team. Next we will keep you across all the Market Reactions. Can Technology Keep up . And why arent markets faced by the uncertainty . Perhaps a president like joe biden who is focused on quote unquote making deals and compromises might be a very positive outcome for the country going forward. I have been in the room with her then Vice President biden and mitch mcconnell. They can work well together. Like trump and like obama and bush and cheney before him would do a lot of governing through executive order. A lot of things trump passed on he can reverse or stop doing. But will that satisfy people . No. If there is gridlock that is something they will be concerned about. The mortgage side seems to be comfortable with the potential for gridlock. We have to step back from the election and realize covid is what is driving this market and this economy. The more unstable things are in the next 60 days only increases the probability we get a bigger and the other thing is they have made it clearer now taxes are not going up and people can go by risk assets. Still no confirmation on who the u. S. President will be. Trumps unfounded accusations of fraud have not rattled markets. Up. Nasdaq is futures lower today, but postelection risk rally looks set to leave indexes well in the green for the week. We are joined by the chief strategist at Ubs Investment Bank. Good morning to you. Hanging on for all the latest details. We have had no change in the numbers for 24 hours. Do you have some an assumption of some sort of gridlock or a constrained presidency . It is a tentative base case because we do not know if a democrat sweep is precluded. It doesnt seem most likely we are not going to get a democrat sweep and we are going to get a bite and presidency. That is not bad for the s p but it does mean for the economy we are looking at gridlock. Sense, the a difference in fiscal stimulus under a democrat sweep could be Something Like 3 trillion dollars of spending. A split congress, we are likely to get less than half a billion. It is a very big difference. It is 100 basis points in terms of global growth. Not just the u. S. , it is important for markets elsewhere. I think the market is celebrating right now because we are not going to get a trade war in the same way under bite also because ahead of the under biden, but also because the democrat sweep was the base case for most people, they have bought a lot of protection on the nasdaq. The fact we have seen a decline in volatility has led to stocks moving forward. We have seen the biggest decline in nasdaq volatility since march. This is of earnings, less then a democrat sweep. Just to reiterate, you are saying there is a huge difference in the size of fiscal stimulus that should be expected by markets versus an expectation of a blue sweep. Something like a sixth of the size. Is there a way that number could change though . You have a very low number if you have a constrained biden presidency for fiscal stimulus. I guess that does depend on the underlying u. S. Economy. It has not in the recent past because you have actually seen through the course of week times of the u. S. Economy in the last six months, you have seen very poor ability to agree between democrats and republicans. It has not changed over the last six months. We are skeptical we will see much more about. Unemployment rate increases tremendously we could get more. In the past we have seen with the democratic president and republican dominated congress, it has been very hard to get any fiscal stimulus through. We think gridlock ought to be the base case. We get more spending time whether the markets will have to. O down before they get up ann the strike is going to be far away. Anna we have seen a big unwinding in the inflation trade. Where does inflation had for you . Treasury yields had modestly headr over time modestly higher over time. Although the fed is buying supply on the market, spending is so large you are going to get steepening in the curve moving forward slowly but steadily. That is quite important because one of the markets aspects of the markets rally is if you are not going to get the physical stimulus, you are going to get liquidity from the fed. I think the ability of real Interest Rates to decline much further from here is very limited. Yields are not likely to come down beyond 70 basis points 10 year and also breakevens are unlikely to rise. As a result i think real Interest Rates are closer to 1 . We are not going to see the much lower. There has been a step for step correlation between real Interest Rates and higher equity valuations. Anna thank you very much. We will try to establish a better connection for our next conversation. We are getting some development coming out of georgia. The counts are ongoing. 16 electoral votes of course up for grabs. Trump is leading. Votes a leading by 1775 few hours ago. That has shrunk a little further. We are getting this ongoing feat of information from the county in georgia. , solead President Trump has tight is the race, trump does have a small lead, but it is fading with the latest information to come through on the count. Standard chartereds ceo strikes theptimistic tone as majority of european banks gravel with more lockdowns. Where we took a cautious stance in terms of what future losses could be, early data points suggest it was not that close. It is really there. Bill winters strike me an striking an optimistic tone. Optimism about the pandemic seems to be returning in some parts of the asian story. Europe is still facing the worst of it. Chief strategist at Ubs Investment Bank is still with us. Lets focus on the fight against the virus and what that means for your investment horizon. Looking at your baseline and you are talking about the end of seeingar, for 2021, only a global population with 34 immunity. That does not seem very high. That does not sound encouraging. I imagine there will be a huge distribution around that average depending on which country we are talking about. That is right. The question is a logistical one. How quickly can Different Countries produce and rule roll out the vaccine and how effective the vaccine is. In an optimistic scenario we would get 3 billion of the global population vaccinated and immune to this virus. We do not know whether we will get immunity but we are assuming in our best case we will. The question is where are immunity levels . 65 . D 60 , around if you get around 3 billion that will not be very far but that is an optimistic scenario. We will have to get a vaccine by early q1 next year and rule it out quickly. The success or failure for vaccine is less exciting than the u. S. Election debate, but for markets and economies, it is much more important whether or not we get a decent Global Recovery will depend on whether we get a successful vaccine. Anna indeed they might be linked, different strategies we would expect from the contenders in the u. S. Election. Assessing go about how much of a vaccine is priced into markets . Where do you see it priced or not priced . It is a difficult calculation. It is very sensitive. We try to calculate how much vaccine is priced as we first look at how much the markets have been helped by liquidity. We look at how much markets have been helped or hindered. Howr than that, we look at much vaccine hope has been priced. Across markets we find between 70 is already in the price. U. S. Growth you have priced in about 80 already. U. S. Value is pricing in about 46 vaccine growth. That is where the trade is much more were we to get a vaccine in the next one to three months. U. S. Values are underpricing a vaccine more than emerging is not are, which intuitive, but once you normalize for liquidity it begins to make sense. Anna thank you very much. Really interesting conversation. Thank you very much for joining us. Let us check on the u. S. Political side. The state of play the same as yesterday. 260 four for biden including arizona and there does seem to be difference between Different Networks in the u. S. President trump on 214 right now. This is the tally as we have it at bloomberg right now. The u. S. Election too close to call as we heard from ed ludlow, a lot of focus on georgia. The gap is narrowing. Trump still has a very small lead, but the count continues. We will continue to see votes from georgia through the european morning. We are not expecting news on arizona and nevada, but those estates crucial, as is pennsylvania, still waiting for details there. Have a look on the markets. President trump is keeping us busy being active on twitter, critical of twitter saying twitter is out of control, claims to easily win the presidency with what he calls legal votes cast. We should say in many states there are laws about the receiving and counting of those postal votes and there is not any evidence to suggest there was anything illegal going on. President trump keeps making those comments. This is the picture on equity markets. Euro stoxx 50 futures down by 0. 6 . Nasdaq futures down just shy of a percent. Contexthat all in the of gains we have seen since the u. S. Election. It does not look as if we will get the blue wave priced in, but still, lots of questions on the senate. Too close to call in the race to the white house. Anna it seems the vote count ,hich continues in georgia President Trump has a slight lead, but as more votes are counted, joe biden does play catch up. Counts President Trump has been making his feeling known. He does not like the count is continuing. In terms of the overall tally, including in bidens count the number for arizona, 264 for biden, trump, 200 14. Counts continue. Lets get back to the market story. Euronext says it has had talks with regulators on the second trading outage in two weeks. Reporting ebay keep it a ebita. I wonder if you could tell me how the revenue side of things is performing. Your reliance on cash trading, i wonder if that has been something that has supported business or hurt the business over the most recent quarter. That has been a Strong Quarter after an excellent q1 and q2. Theave performed both on core business of the cash markets, the cash equity trading business, but we have also benefited significantly from the diversification of revenue over the past year. It is a combination of resilience of the core business combined with strong contributions of new assets like post rate assets we have acquired over the past two years. In terms of the technology issues, you are taught have talking to regulators. Have regulators proposed any changes . It is performing extremely well. We had one incident on the 19th of october, but no one is challenging the fact that for the past 20 years euronext has powered by a Single Technology platform which is performing. We have a dialogue with regulators, we have a normal dialogue with clients who are very important partners of us. Do is tore trying to a problemons from that does not challenge the fundamental architecture of what we are trying to do with the European Union, which is a very efficient platform. Clients want more efficient platforms. The clients want bigger and deeper Liquidity Pools. The regulators want more visibility over a single platform. No one is challenging the ofject, nor the architecture the euronext platform. The dialogueake is during an incident. Affect others exchanges, no one is questioning the fundamental architecture should be revisited. Anna it is just that the head of equities at asme, a lobby group that represents banks and investors, has said this raises questions about the consolidation of Exchange Operators and whether that increases risk because if you are bigger and your system goes down, that has a bigger impact on investors. Reality across the industry. There are other players and when there are problems, no one is suggesting to break them up. The European Union is embarking in a project to build the backbone of the capital market. Single Liquidity Pool powered by a Single Technology platform. The clearing industry is somehow consolidated. Thetrading element is in process of consolidation. This is what we do with a very intense level of investment the past few years. A platform which was not in any way whatsoever the root of the incident we had for the 19th of october. It is evidence of our commitment a strongh responsibility, strong forstment in consideration the consolidated platform. You about thesk way the business has adapted to covid19. How many people do you currently have working from home . What are your plans over the winter . To keep people home or bring people back . Know, during the first e, we have almost 27 working from home. The very platform you were tocussing was a powerful way march,the volatility of april, and may in a super efficient manner. In the summer, things came back. New york and london stayed home more extensively. The past few weeks across Continental Europe and in london, a lot has started again. Where thesituation two of us work from the office, on theth the teams, premises. We will see how things evolve. We have simple principles. We prefer people to work from the office. Have regulations or instructions from local we do what, authorities guide us to do. The priority is the safety and health of our staff. And securing the anna thanks very much for your time this morning. Housee race for the white still too close to call, counting continues with joe biden catching up with President Trump in georgia and pennsylvania and extending his lead in nevada. Joining us now is our Senior International editor jodi schneider. Give us the latest on this. Joe biden seems to be moving ,orward in georgia pennsylvania, and arizona. Basically narrowing the lead that President Trump had their. Arizona is complicated. The apn fox called arizona for joe biden. Some of the other networks have not. There is some differential. Basically, if he gets arizona or hangs onto it, joe biden just needs one of those other states which is nevada, pennsylvania, or georgia. Pennsylvania alone is 20 electoral votes. He claims that, he gets 270. President trump is well behind. Point, joet this biden looks to be moving forward. We dont know how long those votes will take to count. It has been taking a long time particularly in pennsylvania, urban areas like philadelphia, inre were a lot of mail ballots. Anna President Trump up late continues to make the same statements or give the same messages that he thinks he has won. He makes a distinction between votes being cast as to whether they are legal or not. No evidence of widespread illegal voting. When do we get a winner . The legal challenges will follow, but when do we get confirmation . Collects we could have that in the next two days. They tell us we are going to be doing more counting and could have a conclusion in nevada or georgia by tomorrow. Biden at 270. Joe at that. 1 would assume he would say he is the winner. President trump has been making legal challenges. They have not been doing that well. Is these aren somehow fraudulently or magically appearing, but there has always been the sense this was going to play out this way. There was huge unprecedented early and mail in voting. Democrats voted more heavily that way then republicans. The day of the election the votes that are cast that they are counted right away. It looked like President Trump was a headwear when you start the counting was ahead where when you start counting all of the votes, joe biden is making up ground. Hase have not been there not been any evidence of widespread voter fraud. Thanks very much. Something she has covered for many years. U. S. And european stocks futures declined. Investors watching the tight race to determine the next american president. We will analyze the Market Reaction to the vote next. This wobble we are seeing in european futures, very important to put that in the context of the week. Anna 17 minutes until the start of European Equity trading session. A little bit a weakness priced in the start of trade. Numbers coming through from georgia. We are keeping uptodate on that. As investors monitor a tight ine, the biggest surge history. Votes continue to be handled in key u. S. States. What has been driving the gains in stocks . Adding stocks were hundreds of billions of dollars in market value, actually, most stocks were falling over the past three days. The trends we saw should not surprise anyone who has been paying attention in 2020. Driving the gains were the mega cap. Tech. It was about coming back with force and value fading into the background. This may be a resumption of the old reliable lower for longer trade because of how we saw the election unfold. Stimulus back in the hands of the bed instead of congress. Perhaps the markets hate uncertainty bit did not play out. We saw hedges dissipate. Dropping dramatically. Todays action perhaps is just a bit of weekend indigestion with traders punching out getting ready for friday not leaving as much risk on the table on a weekend when we might find out who the next president of the United States is. Anna it is fascinating to watch the race, but im increasingly drawn back. We will get more details. The balance of power in the senate really important to watch. There is a difference between the numbers we can see depending on how that goes. The firstas become country to top 100,000 cases of coronavirus in a 24 hour period. France is warning of a violent second wave and italy along with greece are the latest countries to impose lockdown measures. Theeu commissioner says rebound has been battered by restrictions on policies need to stay supportive to avoid a doubledigit recession. The stall wevoid are in now transform in a second recession. This is quite possible, but it depends also on the strength of our support to the economy. Maria tadeo joins us from brussels. Ongoing restrictions ratcheting up in various parts of europe. Toll is that expected to take on the economy . That is a big question. There is no visibility of the pandemic, on the virus. We dont know what an effective treatment is going to happen. That is something the Economic Affairs commissioner for the European Union kept repeating yesterday. If you look at the measures and restrictions coming into effect, the greeks are going back into lockdown. The italians, major restrictions in the north of the country. Has i would say is italy not gone into a full national lockdown. They insist industrial activity in the north of the country needs to keep going to avert that recession. Of waitingbination for the European Central bank and getting a deal here. We see a lag between policies that have been announced and the implementation. We are waiting for the Recovery Funds. Governments will have to spend more money on that. What hasa lag between been announced and what to get the economy moving. Anna maria tadeo with the latest on the virus fight. We will be talking about the fight against coronavirus for investors and for the globe. We are minutes away from the start of the equity trading session. We will get your stocks to watch. Individual moves that could make a move, allianz is warning the pandemic could be the costliest loss event in history. We will keep on the race for 270. It is friday. Anna the race to the white house still too close to call. Lets get a latest on the count. Annmarie hordern has an update. We are still waiting for a lot of states to come in, specifically pennsylvania. Pennsylvania has 20 electoral votes. We have flipped part of the blue wall. The Biting Campaign has flipped wisconsin and michigan. Pennsylvania will be the last one donald trump was able to gain control of in 2016. President donald trump cannot win reelection without pennsylvania. For joe biden, if he wins pennsylvania, game over. We are above 270 and that is it. You can see where we are. It is a tight race. 49. 3 for joe biden. 49. 6 for president donald trump. The issue with pennsylvania is that pennsylvania did not start counting ballots until the election was over. There has been an unprecedented amount of mail in boats due to the pandemic votes due to the pandemic. We have an update from ap on georgia. Donald trump is still leading, but just by 665 votes compared to you can see here the split is pretty much a dead heat. Donald trump is waiting but it is narrowing. They are still counting votes. They are likely skewing to the democrats. Anna thanks very much. Annmarie hordern explaining how close things have become. Minutes away from the start of the equity trading session this friday morning, eight minutes to go. Futures looking a little lackluster, kind of holding out. They made stellar gains earlier in the week. Lets start with the insurance sector. Allianzs reporting. Third quarter did beat estimates. The big story here for any insurance provider is the massive hit from coronavirus. To 1. 5uld move up billion. They have canceled their buyback program. That should not impact shares. It is not like it is taking away a program that was already in place. Annemarie heg sees significantly lower claims from these new lockdowns. Questions interesting , will investors start to move around these single name stocks . Are all eyes still on the u. S. Election . Anna let me ask you about the luxury sector. Called up 8 , and that has to do with china exposure. Had a conversation with karen ward yesterday and she said if you want to invest in the region, china is the place to go. In check. S that is playing out with richemont. That chinabased rebound. Not just a story about asia, but ecommerce huge as well this year. Hugely important when you have your physical storefront shut. In alibabanvesting as well. Any exposure to ecommerce is helpful in this environment. Germanet us go on to the Industrial Production side of things. We have data out this morning. It is important to look at the data. As the u. S. President ial election begins to wrap up, they are putting focus back on the economic story which will really dominate how equities move from here on out. German Industrial Production did rise for a fifth consecutive month. The question is, can that continue as more lockdowns take place . Tighter restrictions in germany take hold. The Industrial Production figures did missed estimates. They came out at a 1. 6 month over month rise. The estimate was for 2. 5 . Still chugging ahead. Can that continue with rising coronavirus cases . Anna thanks very much. Hadr things we have not time to pick up on during the first hour of this program because of the focus on the u. S. Election. Plenty of newsworthy stories to talk about. Lets check on the political map. Just in case you are waking up five minutes to 8 00 in london. Five minutes to 9 00 in paris. We have the same numbers as yesterday including arizona. Biden. 214 for President Trump. Increasing focus on georgia. The counting is ongoing. We seem to be getting numbers drip feeding through from georgia. We will bring you the latest updates. The trump lead narrowing to triple digits. European futures point to the downside. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Anna a minute to go until the start of trading. Good morning. Down to the wire, President Trump sleep in georgia and pennsylvania narrow. Four continues in counting continues in four states. Trump claims the election is being stolen spite no evidence. After gains of 9 on the nasdaq over the past three days, the risk rally shows shine signs of sauntering. It is friday morning. We have no progress to report in the election tally compared to this time yesterday, but counting has been continuing and we update you on the numbers as they come in. Some of the key battleground states, trump where he has leads, his lead is being eroded. Part of that story we are dealing with in georgia. Lets look at futures, suggesting movement to the downside at the start of the European Equity trading session, which is getting into our stride on the equity trading session this morning. The ftse 100 is fairly flat this morning but shows some green, ibex down. 6 . We are getting a mixed picture at the start of the trading session, coming through here in london. We didnt have great fx markets to guide us, the dollar against the pound fairly flat. 131. 50 is were betrayed. Where we trade. The cap corona opening to the downside. The ibex down by. 6 . We keep an eye on the fight against covid. We keep an eye on the u. S. Election rate. We keep an eye on the data because we have had data on the manufacturing side in germany. Plenty to talk about. Our top story still remains the race for the white house. It is still essentially too close to call. Captain continues in crucial swing states counting continues in crucial swing states. Both candidates spoke earlier. Its really destroyed our system. Its a corrupt system. And it makes people corrupt, even if they arent by nature. But they become corrupt. Its too easy. We continue to feel very good about where things stand. We have no doubt that when the count is finished, senator harris and i will be declared the winners. So, i asked everyone to stay calm, all people to stay calm. The process is working. The count is being completed and we will know very soon. The call to stay calm from joe biden and to stay patient. We were talking with our colleague on marcus live, saying treasuries just want to make it to the weaken from a markets perspective. Trump took no questions after the news conference. He was referencing what he called voter fraud, but Bloomberg News finds no evidence of widespread dilute illegal voting. Joining us now, ed ludlow with the latest. Take us through where this race stand at the moment. Ed in terms of Electoral College votes, joe biden has 264. Im looking at georgia because in the last half hour, the race has really narrowed. Votes,s up just 665 with 500 million counted, but most counties are democrat leaning. Of joe bidenory taking advantage of mail in voting, where he is hitting 70 , 80 of the vote in terms of ellis being returned. A of ballots being returned. Delete trump holds over biden has narrowed the lead trump holds over biden has narrowed. Ballotsroportion of being returned is going in favor of the democrats. Pretty quickly, and interestingly on georgia, yes the driver is clayton county, the home of the late congressman john lewis. Earlier in the evening, biden keeps picking up counties that voted for trump in 2016, or were projected to vote for trump in this election, in the case of georgia. We are also thinking of nevada. Dont expect votes to come from nevada until sometime tomorrow. Anna what about arizona . Weve included in the overall numbers you went through, weve included arizona to joe biden because two of the networks in the u. S. Have, but not all of the networks and there is confusion there. And the Associated Press called arizona in favor of biting very early with a modest amount of vote counted. The Trump Campaign pushed back very quickly. They still believe trump can win in arizona. But in has elite of 2 . A lead of 2 . He has been chipping away at joe bidens lead. There are 300,000 ballots outstanding, 200,000 in maricopa county, but sources tell me still feel those ballots, which are printable he mailin ballots returned prior to the election, are going to be skewed towards the democrats. This is a state, which democrats put a lot of money to in order of fundraising, advertising, because they felt they could take across the ballot share from the republican party. It has long been a republican held state. The Trump Campaign is doing all it can to get that life even though two that alive even though two networks have called provided. Called for biden. Anna the extent to which the president , the future president , will be supported by the senate is crucial. Ago, it ago, sometime seems the senate was not going to go to the democrats. Now things seem to be incredibly close. We are only kept waiting a while. Ed there is a chance, and the big part is georgia, where two senate races will go to a runoff in january. Democrats have done well. They picked up a see in colorado. I dont mean to go back to arizona, but if things stand, they will return two senators to washington for the First Time Since the 1950s. You think about one of the candidates, mark kelly, a democrat and former astronaut, he positioned himself as a centrist and talked about being able to work across the aisle. That had a positive effect across the ballot in terms of attracting independent vote. Theyve not been able to replicate that elsewhere. They picked up colorado and arizona, but lost a see in alabama. Why they have this parse in the senate, its still looking difficult. You look at the popular vote, yes, almost 17 Million People voted for joe biden, but almost 17 Million People also voted for donald trump. A lot of officials told me this is being positioned as a referendum on donald trump. Theres still support for him there. If you look at the balance of the two chambers, it seems like its going to be difficult in terms of governance for joe biden if he does become president elect. Anna and crucially if we do end up with a tie in the senate. The Vice President would have that tiebreaker role. Fascinating time. Well keep watching. Ed ludlow. Lets get a market perspective with the head of multiasset strategy. Peter, really good to speak to you. Are you brave enough to have a base case at this point that covers not just the white house or the senate . What are you working with . Peter markets have been pressing the biden win since about 10 00 a. M. On wednesday. That was a time when michigan really swung in by its favor. In bidens favor. The market has been extrapolating that and assuming the government led by biden. So, then the main question is what does this mean for risk assets and upside . There is for risk assets because of this is a pretty benign government thats going to be there, unlikely to do much. Markets can work with that. A government that cant do much, is not a bad thing. Its unlikely to be the big fiscal package the market was getting excited about over the past few weeks. But its likely to be replaced if and when needed by more dovish fed than previously assumed. So, you note you know anna how our markets managing to get over the disappointment . The market narrative seems attached to that fiscal gift, and now the market has carved that aside. Peter without respect, its really with that respect, its really about substitution from the fed. The Treasury Curve has gone lower and flatter. What weve also had, a lot of this rally from about 32. 50 on the s p 500, up to 3500, has been pricing in uncertainty. A buy on the fact kind of mentality. Is not suggesting theres an enormous side of upside. Weve got to be thinking this is a clearing, and thats what Market Reaction has been, and it allows the market to thing about, with the uncertainty outoftheway, it allows the market to think about what happens next year. A lot of strategists, ourselves included, are thinking about what happens next year. How much growth is there . When growth is going to be extort or in q2 extraordinary in q2, sparkling quarter of performance, and markets can look through that and think ok, maybe valuations are higher at the moment, but early next year, they are likely to be putting money to work and assets. There may be a pause at 3500. It looks to be a technical resistance. Perhaps nonfarm payroll can stop equities in their tracks in the near term. Next year looks like its going to be very supportive. Anna a nice reminder we need to focus on the u. S. Economy, lest we forget the fed. Yesterday interesting too. The fed is talking about the need for fiscal stimulus, and perhaps some people, some of the words used by jay powell suggested there would be more to come on the monetary side. How did you interpret the fed . Peter the fed opened the doors to more options. When there is uncertainty about the political side, there is uncertainty about what can be delivered on the fiscal side. If the fiscal side is delayed or much smaller than what would be optimal from a macroeconomic perspective, than the fed would inevitably step in to do more. Theyve talked about how they can do more. They can increase qe, or Corporate Bond purchases, or indeed they can look further at the curve if they really need to. With Mortgage Rates at record lows, we dont think they need to be going further at the curve at this time. But the options are all open their. Open there. The fed has the ability to act. The fact they are able to lay out these options is another one of the reasons risk assets are still supported in the mediumterm and in the long term to the upside. Anna peter, thank you very much. Stay with us. Peter does stay with us and hes assets about risk staying supported. Dow futures pairing losses, turning almost positive. Nasdaq futures down. 4 . The stocks story in europe is weve got equity markets up. 2 . The ftse 100 is up. 3 . Some decent gains, not exceptional, but the move to the upside coming through. We are also seeing selling of treasuries and yields going higher, which makes a change from a few hours ago, oil pairing earlier losses. Thats a look at where we are on the markets. We will come back shortly with further analysis of the fight against covid19 and the effects on markets. This is bloomberg. Anna welcome back to the open, and things are looking more positive than anticipated. The dax is fairly flat, the ftse 100 keeping heads above water. We had a lackluster trading session through asian markets and risk assets losing their nerve a little bit. We saw that with nasdaq futures down around 1 early on. Those losses are being paired. Lets not forget weve seen a strong rally in risk assets in the earlier part of this week. The bloomberg dollar index pretty much unchanged, which might come as a relief for some, who are watching that take on a great degree of volatility. Peter is still with us. In the immediate aftermath of voting day, we still seem to be in the election. The immediate aftermath of voting day, we did see the dollar gains gain strength. Some of those trades around bidens success were unwound a little bit. We d. C. The path of the u. S. Dollar from here where do you see the path of the u. S. Dollar from here . Peter to the downside with moments of geopolitical risk, possible flareups on that side. But if we do get joe biden confirmed as the next president , as well, the prospect of their big geopolitical flareups will diminish significantly over the next four years. So a look on the dollar, we are fairly bearish. Levels, with regards we see the euro rising to 130 against the dollar to june of next year. Similar for other major crosses. Witht really is next year, the geopolitical risks reducing, and really with the Global Economy going back into cyclical upswing, then the downside to the dollar is really very significant. It means that youre going to struggle if youre a foreign investor to make money by investing in dollar assets unless you hedge fx risks. So thats where we see major opportunities outside of dollars. Anna thats they dollar story for you. The pound and the euro have been flipped around by the dollar this week. Its been a dollar story, focused on the election. There are other things going on, not least of which the news from the bank of england, and also the u. K. Chancellor. Lets listen to the bank of england governor giving his thoughts on some of the risk. I think weve learned this year from our experience with earlier bouts with covid that its important we act both quickly, and that we do act clearly in scale. Weve got a six central Downside Risk a substantial Downside Risk on the scale. Anna andrew bailey, governor of the bank of england, speaking to as this week about the scale of action they been taking. If you do see the dollar downtrend, does that mean the pound has some support from that . Theres plenty of other news around the pound, that exit trade negotiations approaching. Weve heard big news in parliament from the chancellor extending this game to march. The scheme to march. Peter i would much rather [indiscernible] the pound is still going to struggle. I think that when we look at the u. K. Economy in the First Quarter of next year, its going to be a lagger compared to the euro and u. S. Economy. The reason i think its going to be a laggards we are going to be struggling to be to rebalance the economy. For the economy to rebalance and adjust to the new trading environment with the e. U. And other partners, really whats necessary is the weaker pound for that adjustment to really accelerate. I think the underperformance from the u. K. Economy versus its major peers is going to be really quite pronounced in the first half of next year. And then its only after a period of weak pound that we do get a rebalancing of the economy, and we see an upside. Still, unfortunately, sterling assets will be underperforming, with the exception of gilts. I would think that gilts are going to be performing quite well, and currency neutral terms, in currency neutral terms. As a dovish turn to inspire the market. And an overly dovish bank of england will surprise the markets. Expect gilt markets to lessen significantly. Anna thank you very much. Apologies for sound interference we were getting there. Lets get uptodate on the latest from the election. No change in the overall numbers were talking about, two to 64 214ided, 264 provided, for trump. We keep their accounts in an number of swing states going, in particular georgia, were getting ongoing updates from the accounts in georgia. We will get uptodate from that shortly. This is bloomberg. Anna welcome back to the European Market open. The trading session looks positive as we watch results trip through from georgia, where counting is ongoing. Other states still counting. Nevada, pennsylvania, and others. We see more movement on the georgia number, and the lead for President Trump seems to be decreasing as more votes are counted. That is the state of play right now as we raced to 270. Is six Electoral College votes away. The u. S. Has become the first country to top 100,000 cases of coronavirus and a 24 hour period. France is warning of a second wave, and italy and greece are the latest countries to support locked and measures. More restrictions in various parts of europe. What are the fears around the european economy at this point . Maria anna, theres a few. If you look at the numbers that came out by the European Commission yesterday, they see a bigger subtraction than expected. They look at the pickup and 22 anyone, 2022, its not big and 2021, 2020, its not big enough to pick up. There is a concern about a doubledip reception taking hold in europe, especially if we do see lockdowns being extended in time, which is a very real possibility. We look at what macron has repeated, this is a situation that could last until christmas, but could be extended. It depends on the pandemic. We have no visibility on that. What i would say is officials to tell you they hope a combination of action by the European Central bank, Recovery Funds being operational in 2021, could save the day for europe. But the National Government needs to spend. Not every country has the same money to spend to protect their economies. Anna what about the money set aside in the Recovery Fund . The eu cut a parliamentary deal over the rule of law yesterday, holding up some of the agreement around the fund. What are you seeing there . Maria its a preliminary deal. Nothing is agreed but it is a significant step. We know it has been a major stumbling block. Momentumng, there is for this fund to be operational by the start of next year for the money to flow in the second half of 2021. If anything, the second round of coronavirus has increased pressure to deliver a deal and get to an agreement quickly. Anna maria, thank you. The u. S. Election still too close to call. More on the white house race next. European markets losing momentum , falling. 2 . U. S. Futures point lower. This is bloomberg. Anna welcome back to the European Market open, 30 minutes into the trying session in europe. Were nearly there, nearly through friday. Not nearly through friday, nearly through the week. The u. S. Election still seems too close to call. The overall numbers look exactly as they did this time yesterday, 214, by 264 trump at 264,at 265. Biden at his lead in nevada. Both candidates spoke earlier. Its really destroyed our system. Its a corrupt system. And amex people corrupt and it makes people corrupt, even if they arent by nature. It makes them corrupt. We continue to feel very good about where things stand. We have no doubt that when the count is finished, senator harris and i will be declared the winners. So, i ask everyone to stay calm, all people to stay calm. The process is working. The cat is being completed. And well know very soon count is being completed. And well know very soon. Anna President Trump took no questions. There is no evidence of widespread illegal voting in the election. Joining us now is the Senior International editor, jodi schneider. What is the latest on the counting to the 270 . Jodi joe budden looks to be nificantly ahead. Even if joe biden looks to be significantly had. Even if you dont ahead. Even if you dont count arizona. Got arizona, he would only need one of the following pennsylvania, georgia, or nevada. For President Trump, if he doesnt get arizona, which looks like he wont at this point, he needs all of those, plus north carolina. So, its a much easier path to victory for joe biden at this point to that 270 critical number for the Electoral College vote. They are continuing to count. We could hear as soon as time,ow, friday, u. S. That nevada or georgia, looks like its going to take longer in pennsylvania, where they had a surge in mail in votes. And that is what is taking so long, particularly in philadelphia. Anna that gives us a clue in timing. Expand on that if you could. Were looking at live pictures of philadelphia, where there doesnt seem to be a great deal happening. Counting continues. 11 33 a. M. Lets put the conversation in georgia, the narrowing lead the president has is crucially important. We had 16 Electoral College votes available in georgia. The percentages here look the same with the lead we understand President Trump has in georgia is only 665 votes. This is down to three digits. As they count, things move in joe bidens favor. That is not something President Trump likes very much. What clues do we get on what georgia calls or what other states call in terms of how nervous everybody in europe should be for news, imminently . Jodi people want news right away. I dont think its coming in the next few hours. Probably more in the u. S. Next day, when they can finish the counting and certify those counts. Weve been thinking it could have been in the past eight for georgia and nevada. Past day for georgia and a better. Pennsylvania and nevada. Pennsylvania could take longer. There system could take days. If that lead for President Trump could didnt could dwindle, and we see that, joe biden could take that state. The way this works is the people who voted in person on election day, those votes were counted first. That seemed to favor republicans. The president maligned mailin voting for a long time, told his supporters to show up on election day. Many of them did. It looks like he led in a number of places where once as mailin ballots came in, his lead dwindled. That could happen in georgia, which would be a political move. Georgia has long been a red state. It has just gone for democrat president three times in relatively modern history, twice to jimmy carter, who is obviously from there. Anna excellent. Thanks for the update and the context. Jodi schneider with the latest on the race as a whole and specifics around georgia. Joining us now for an economic perspective, an economist joins us. What are your expectations . I spoke to a guest who sat under a blue wave scenario, they were thinking Something Like 3 trillion for the u. S. Economy in that scenario. And if you end up with a shared power in washington, a constrained biden presidency perhaps, you end up with something perhaps much smaller, maybe a six, below one trillion. What are your expectations . Callum we have to speculate about what the result will be. We work on the basis biden wins the presidency, but Congress Remains split, republican still in control, only up in the senate. You dont get the big stimulus that would come with the blue wave. In the near term, markets may be unhappy about that. But i would just emphasize that the u. S. , even into the coronavirus pandemic, was running significant deficits. Any additional borrowing over the next couple years would have to be corrected with significant austerity three or four years down the line in spending cuts or higher taxes. I dont think the way to look at it is whether or not the fiscal impulse is smaller, but whether or not the cycle of fiscal policy will be flatter under a mixed congress. I think over a five or six year view, probably better off with a mixed congress because you wont get the boom, followed by the bust, viewed by the big fiscal splurge, followed by corrective tax hikes. Anna we do expect the fed to step in instead and do more of something if we see less on the fiscal side . Kallum theres only so much the fed can do. The fed can keep rates lower for longer. They can raise exploit inflation expectations. It has qes in the u. S. It has come to know exactly what the fed can do. They can get the credit they need. The fed is doing its job. It actually has some limit. They can provide the cash, but someone has to borrow it and spend it, which is white fiscal policy matters. U. S. Ld emphasize that the is actually closer to full employment relative to europe. The u. S. On the current track will be reaching q4 2019, prepandemic levels. There is a justifiable question to say, does the u. S. Need a big fiscal stimulus . The markets will like it, but probably the report recovery is fiscally strong anyway. Anna can i ask about unemployment in the u. S. . The Unemployment Rate reduction from bloomberg prediction from blueprint economics is etched down Bloomberg Economics is edged down. I wonder what the unemployment has based on the support coming from various governments. Kallum thats exactly right. Its a tough question to answer because unemployment surges as economic output drops, and that householdmpacts spending because income falls as on a plummet rising rises. Thats not happened this time because governments have transferred huge sums through direct transfers or through u. S. Ous subsidy in the even if on a plummet has dropped, Household Income has actually increased, especially in the u. S. What we are likely to see is Household Spending cash over the next few months actually accelerate the unemployment recovery, which has been pretty good in the u. S. This is a fairly good recipe for future recessions, transfer income to households, offset the volume, pretty much guarantee a decent recovery and households to spend that cash. Anna really interesting. We should acknowledge a great deal of variation around the average experience, which you. 2 in the u. S. Or globally which u. S. Ort two in the globally. Up next, equities limp toward u. S. Nd of the weeks as the races to the next president. This is bloomberg. Anna welcome back, 43 minutes into the trading session and European Equity markets faulting down. 4 or so in paris and in frankfurt. We have u. S. Futures pointing modestly to the downside. Downq futures have been. 75 this hour. As investors monitor a tight electing biggest post surge, equity gains paused as that graphic showed as votes continue to be tallied and a handful of key u. S. States. Joining us to discuss is dani burger. What has been driving positivity that has ruled on the equity story . Dani its almost a comfort trade, markets settling back to what they knew was reliable. The wild thing about the past three days with of gains is the average stock fell. Most were not participating in this rally. Its a return to what is comfortable. , make a capmomentum tech. Thats what this was about. It could also be a return to what investors know worked in 2020 as that lower for longer trade, the stimulus back in the hands of the fed, no longer waiting for congress, what theyre going to do no longer the question. At the same time, we saw the dollar move lower, bond yields, as well. Its the lower for longer trade coming back. Despite uncertainty, they went to what was comfortable. In terms of what happened today, its friday. A lot of uncertainty heading into the weekend. Maybe it makes sense. Get some much needed sleep. Anna absolutely. Everybody needs rest. Dani burger with the latest on the markets. That gap between President Trump, still in the lead in georgia, and former Vice President biden, trading trailing him slightly, constantly being eroded by the counting going on in georgia. We will keep you uptodate with the extent of the lead President Trump has. They have counted almost all the votes, so we will see where this ends up. Elizabeth joins us now. Fear he could to speak to you. I wonder how close you are watching things in georgia, or if not torture, where are you focused in the early hours of the u. S. Morning or 8 45 our here in london. Where is your focus . Elizabeth we are all watching georgia. It was interesting, yesterday, there was a cartoon that showed two liberal ladies in siberia showing the various countess. Thats where we are now. Everybody is turning into an observer of a counter in georgia, arizona, and so forth. Georgia would be a huge shift, huge win for biden, which was expected to go trumps way. All over the world, we are all watching the counters that ordinarily nobody cares about. Anna we will see if the numbers stay that tie in georgia, whether a recount has been requested, as has been done by trump in other cases. What is President Trumps strategy here, because he keeps suggesting illegality has taken place . Knowsources point to widespread evidence pointing to voter fraud. What is the strategy he really wants that to be something he wins with in court . Or is it he setting up how he is approaching the next few months or after the selection . This election . Elisabeth there are two things. The first strategy is to delay. There is a cutoff date were also all states have to announce the results. Some are still counting. If the result is not clear by comes, thenhe day those states can simply appoint the electors themselves. And republican rule states can say we will appoint republican voteg electorals who will for trump in the Electoral College. So, its really, really dangerous. Is actually, the popular vote could be lost. And thats what hes going for. Its playing with fire, but we have to remember there is no legal obligation for the state to go with the popular vote. The constitution says they will appoint electors for the state. They went with the popular vote. But if the popular vote is unclear, or very narrow, then they may just decide to appoint Electoral College members, who will vote for trump. That linkt, so between the popular vote in the state and the electoral vote, does that very statebystate, or is that nationwide that there is this lack of clarity . Different ins different states but the reality is now that it certainly appears. Another thing important to bear in mind is that if trump concedes and he wont do so willingly, but if theres no way forward for him, even through the course, then he has four years where he will, hes likely to create a lot of mischief for biden. Were already hearing suggestions that if he has to step down, he is planning to run again in 2024. You can imagine what it will be like for u. S. Political stability for biden, in particular, and for the american efforts to heal the country if he sits on the sidelines and sort of makes his opinions known over the next few years, should he lose. Anna perhaps through his media outlet. Thank you very much. In on that ever diminishing the President Trump does still have in georgia, and asking questions about where this goes next. We will bring you the latest as we get it. This is bloomberg. Anna welcome back to the European Market open. European markets in the boat, Global Equity markets in the boat, waiting for the result elections. Aiting for annmarie still too close to call. Firm joe biden we if you4 for joe biden, include arizona. In georgia, this has become a dead heat race. We have what cnn is become calling the margin of error is spectacular. 49. 4 versus 49. 4 . Cnn has donald trump leading by 463 votes. You dont see that in a president ial race. That is how close we are seeing in georgia. Pennsylvania is 20 electoral votes. Those counts are coming in. A lot of these are mailin ballots, and they are skewing towards joe biden. 49 point 3 versus 49. 6 . What is important about pennsylvania, there is no path to the president for another four years without those electoral votes. If joe budden was able to clench pennsylvania, the game is over and he is president of the United States. Anna thank you very much. Lets get the market. Then we have seen the dollar on the move a lot. That has got my attention this week. I havent been thinking about the end, but i know you have. You have thoughts about where the young goes from here. Thegain goes from here yen goes from here. It is against the dollar because of the inflows we are seeing. Japanese stocks surged to a 29 year high. Thats unusual, and obviously search. Causing it to the boj maythe yen, get antsy because they dont want to choke off International Activity that may stem from yen. Gth in the end the which assetsanna are complacent . The markets are asking this question. Stocks arethat the pretty rigid at current valuations. We are looking at in earning deal of about 3. 5 , where that has not been historically a sustainable level. Treasuries, as well, elongated treasuries are rich after this weeks curve flattening. That stasis may continue for the reasons annmarie mentioned just now, for maybe a couple more weeks until the uncertainty plays out. After that, i think investors will come back, probably in the new year, and will look at valuations in stocks and long dated treasuries. Anna thanks very much. Vin ram joining us. Thats it for bloomberg markets. Stay with us for the european open. We look at results as they come in, particularly from georgia. 264 for biden, including arizona. 214 for President Trump. We will see how this continues. President trumps lead narrowing. Also watching pennsylvania. We have live pictures for you of philadelphia, i think, where the counting continues. This is bloomberg. Francine down to the wire. Just hundreds of votes separate President Trump joe biden in georgia. Pennsylvania remains too close to call. The president says the election is being stolen, despite no evidence of widespread illegal voting. Jerome powell says its a good time to let the institution of democracy do their job. The fed says the virus away on the economy, as cases topped daily cases topped 100,000