Face, quote public and private pain after choosing to exclude huawei from the roll out the treasury surges and jamie dimon says the future path is uncertain. We dont know we are very clear, i think, you will have a much more difficult economic environment Going Forward than you had in may and june good morning. Welcome to street signs. I want to take you to some of the market action. As we opened up, we were very strong very little in the way of red ink. More moving on to the charts, it has been an interesting section as we we up the potential for another vaccine for the coronavirus very mixed reports from profit hit of covid19 and the lockdowns and some of the outcome it has been a mixed bag as we rake through the earnings from telecommunication and luxury weve seen a lot of provisioning this morning, trading higher by three quarters of a perfect. You can see how it translates across the core markets. The ftse in the uk is. 8 in the green. Decent outpacing german stocks today. Weve given the territory back spain up there a bit closer to the range of the core market that has drifted south the italian market more than 1 in the green lets get into what we are seeing a couple of patches in the red telecoms taking the position in the uk, the network yesterday has clearly had implications for the uk companies but also across europe heavy lifters, as well, food and beverages strong bounce there. You can see travel and leisure and investors are putting a lot of the bet on this market today. You can see how this plays out 4 for easy jet. Any vaccine talk has been positive we are looking a long way back to normalize travel activity its leisure and business across the board. Vaccine news when you hear it, watch this closely. The mining names a bit of a mixed bag youve got 2 pop on bhp. Luxury looks positive. You can see with all of that banking news it was up 2. 1 outpaced the nasdaq which didnt quiet up to 1 yesterday more on the way in the latest faang stocks moderna shares shot up by as much as 16 after the company said its early staged trial for a Covid Vaccine resulted in, quote, robust immune response in all participating 45 patients. Many are probably losing track of all of the vaccines out there. This one was interesting we first saw the news but there wasnt a lot of evidence this peer review, we can do a lot with this. Investors can be hopeful thats right. This data we got was hotly anticipated phase one study. Moderna is one of the leaders and is one of the candidates that is furthest along in terms of trials. You mentioned the data we got back in may, on may 18 they gave us an early glimpse into what they were seeing it was criticized for being incomplete the data we got yesterday was published in the peer review confirming that all 45 patients produced neutralizing antibodies the company is going to begin a phase three trial. This will be a much more robust trial that will involve 30,000 patients well get the answer then around how protected this vaccine actually is. Also interesting to note that this collaboration these two companies have they saw similar results in the july data they released into the public they got a similar vaccine using messenger rna. The results theyve seen suggest confidence that we are getting an immune response from this type of vaccine. One word of caution, this is seasonal a study with 45 participants we dont know how protected they are and how long this lasts. But definitely an encouraging signal this particular Company Raised money from investors recently which gives us a sense that it might have enough capital to move towards distribution i believe the u. S. Government also got involved in this name how quickly could they bring this to market if they are successful this is kicking off in july and we could see this available in early 2021. You mentioned how they have received funding from the government they havent given a lot away when it comes to pricing of the vaccine. Just two days ago, jeffries initiated a buy on moderna it is one of the Companies Investors are looking at to be able to monday ties this vaccine, which draws a contrast to astrazeneca who are working on a not for profit basis. And Johnson Johnson are looking to do the same but moderna, pricing is interesting to watch they are using that government money to help fund these early trials thank you very much for that development. Well talk more about the vaccine at 10 30 cet lets move on to luxury. Burberry warned the decline could continue the brand sees a spike in growth in china and south korea the Senior Research analysts of global luxury goods joins us especially as weve had a good look at the burberry numbers down 45 could be worse give us a sense of how weak these numbers are in an Historical Context of what has been a market darling as a sector clearly this Second Quarter of 2020 is easily going to be the worst in modern goods industry we have experienced a drop and not just burberry. We saw the results from swatch group. Looking at other big players in the industry that will report. It is going to be very difficult because in the Second Quarter, most of the Stores Starting with asian stores and european and American Stores were closed. When stores are closed, your sales plummet. I think most of the share price action is going to be driven now by what Companies Say about their outlook. The more exposed they are to china and the chinese consumers, the better the chinese numbers from burberry today were incredible they are saying theyve seen a pick up since june and a pick up of 30 what is that telling us about the habits and are the chinese spending it is so visible for sure, i think the appetite for luxury goods is very strong and will likely remain strong. The other thing when we look at numbers is that prior to covid19 about a third of demand was coming up in china itself. We know the Chinese People are not traveling today. The near repatriation effect will try to boom we should not be too impressed in order to be back to where we were in terms of Chinese National spend globally for most companies, sales in china would have to triple bush berry if thats the case. That is the order of magnitude we should be looking at triple digits growth looking at total demand at a time when Chinese People are not traveling abroad. That was what came out as more muted in the bush berry update the key driver of organic growth revival is clearly seen by the market as a weakness International Travel will likely be on the back foot for a while until we have confirmation that the vaccine or a therapy has been discovered. To that end, i think companies that can serve chinese consumers in china and we are already exposed to chinese consumers itself will have an advantage. Lets talk about some names, which companies will stand in a better crisis compared to others there is a criteria we need to look at the first is how strong your brand is in terms of consumer vieibility looking at chinese consumers higher prices when they buy in the main land rather than in europe they need to want to buy that brand. The most desirable brands if we look at channel and others, theyll be better off and really introducing price increases. The last one to do that would be gucci. The strong momentum when theyll want to buy the other brand. The other brand that is important is strong distribution in china in terms of the network and digital distribution ideally going hand in hand with the strongest possible price gap. In that respect, Luxury Companies like rich mont at the very top of consumer desirability and the swatch group should be in good position for the second half. Im staggered by the price increases. It may make sense. What about more broadly when youve had many consumers across the board. It zwnt matter which industry you may be in. Are the price increases going to be possible across the board in say america and europe or will prices reset a little bit . It is going to be a polarized world, i expect. Moez brands will get away with price increases. Where they are going to take this chance to possibly adjust the price gaps are still uncertain. It doesnt seem to be the case prices are increased in china as well as far as the middle classed consumer and more so im with you the microeconomic environment is maybe causing the consumer to be on the back foot it may be said theyve introduced lower priced categories when we think about kos assume jewelry and those that may be trading down in terms of moving from higher priced product to the small Leather Goods to eye wear and beauty as the lower priced category i want to ask you about those various categories if you look at some of the big players, they are in apparel, jewelry, cosmetics, drinks, what parts will be more resilient jewelry jumps out. There has almost been made by lvmp which parts of the market will be strong in the product line . It is an interesting question i think there will be a few moving parts on the one hand, consumers will become more conservative in terms of the brand they will buy and the perceived value they want to get when they spend their luxury dollars i think that categories like jewelry will be and the more transient categories im thinking about sneakers or tshirts, could be seen as less convincing in terms of value for money. Even more so, when we overlay on this perceived value consideration, how different age groups and wealth brackets in the population could behave. We are seeing from the surveys we carry out for example in france that richer consumers seem to be much more constructive of what is to come in terms of the economy and in terms of their luxury purchases. So brands and categories that are exposed to higher end consumers could potentialally b better off why we are constructive on hermes and brands that could be doing well like channel. Thank you for joining us today. The Senior Research analyst at global luxury goods. Coming up, opec expects a big oil surge and demand next year well break that down for you xt businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Simon pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Given into government demands for the proposals and disputes following late night talks in the state capital. The motor way unit that the company could spin off alternatively, the group could sell 8 8 in the business. Setting Legal Process is now under way after rome threatened the concessions since the 28 collapse of the bridge which caught 43 people reporting a 60 jump and still missed the forecast. Asml says it is still in strong position tele 2 said the q 2 earnings Beat Estimates citing lack of visibility due to the pandemic but now says the strong Balance Sheet and cash allow it to go ahead with the original plan. Outgoing tele 2 ceo said they were adjusting to operating in the pandemic weve lived with the pandemic for a quarter. We have seen impact coming from International Roaming and reduction on revenue from tv and prepaid mobil services. On the other hand, we have seen Strong Performance when it comes to broad based programming we now know how we can operate in a way to mitigate the effects of the covid19 pandemic opec expects oil surge to demand as the Global Economy recovers according to the oil groups monthly report ahead of the jmac meeting where they were expected to adjust rolling back cuts. Looking at the price where they would discover the vaccines in the market looking at more supply and demand that is right, karen, you can see this holding on to the 43 us handle that is coming off the pull back all eyes now on official crude oil to get confirmation of another draw down in the United States, which would be bullish for the outlook. It comes as eamon tering committee gets set to meet to discuss what could happen next first would be to extend the current output curve of 9. 6 million. It runs the risk of prices running too far too fast opec is more likely to consider an easing of the output down to the 7 million barrel per day mark and that would be significant which would add more oil to a fraj ill market and keep prices on a more sustainable path to recovery the question is can they start scaling back to the output that remains to be seen they indicated they expect Global Oil Demand to the 100 billion Barrels Per Day and becomes more optimistic saying it is going to bounce up to 97 Million Barrels a day. We spoke to one expert he said 97, it is still dismal looking back to 9. 7 Million Barrels a day next year. Thats a car crash lets face it. We were around 102 million a day before the pandemic this is not a great look for the out look of oil even worse, thats enough to keep the oil industry, the shale industry on its legs you kind of got the worst of both worlds with opec. Karen, julia, all eyes on that meeting that gets under way in a few hours coming up on the show, britain deals a blow to beijing as they banned the use of Huawei Technology as part of the 5g rollout. More on that after the break now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. Welcome to street signs. Moderna fuels vaccine hopes with a study showing its drug produces antibodies. Burberry warns the pain could be felt through to 2021. The luxury designer says it has been severely impacted by the pandemic sending shares lower. Will the european tax man take a big bite out of apple getting ready to rule whether ireland should recover in a leading battle jp morgan Ceo Jamie Dimon says the future is uncertain we cannot forecast the future i feel well have a murkier environment Going Forward than we had in may and june lets get a check on european markets. We had that news out of moderna publishing the study providing a boost to wall street futures and european trading nearly every region is trading in the green the more cyclical sectors autos performing well. Now we have a little more on the board. Telecom also coming under a little pressure. The ecb meetings and Council Submit plenty to prepare and suggest for in addition to making sense out of that new data looking at futures where do we stand in openings on wall street it looks as though the gains will continue. The dow jones looking for a triple digit gain at the open. Let me flush out for you the detail shares shut up as much as 16 in trading after the early staged trial for covid19 vaccine resulted in, quote, robust immune response in all participating 45 patients. To discuss this trial result and broader vaccine landscape, i am pleased to bring in dr. Friedman who is said of the school of medicine id love to get your take on the phase one trial results. How significant is this finding . This is a big result but well have to wait for the phase three study in terms of how the vaccine works i think it is as good as you can get from a phase one study like this especially with the immune responses that look promising working around messenger rna. Both of these are using this novel messaging technology do you think those vaccines will be messenger rna and still a chance traditional vaccines will win out . It is really too early to stay none of them yet in use and seem to be a promising approach time will tell whether there is an approach. Using the new vaccine and you wonder how much they are from this pace, and looking to the phase one and look at the side effects that Patients Experience are fairly typical a bit of fever in some patients, tireness, a bit of headache. Those are common side effects. The phase three study will roll out to 30,000 patients, there may be other side effects that become apparent. I dont think we should be too optimistic that these messenger rna vaccines will cause problems i want to draw the link that every time we hear about one of these vaccines, the market takes off. Youve got capital raisings from the corporate and governments raising money. Does it mean we are going to get a much quicker vaccine if they do show success of those later trials speed is of the essence it may take a couple of months before we know whether the vaccine works. If it does work, it will be vital to step up production quickly and a lot of these candidate vaccine productions are already starting in the hope that they will prove successful of the trials. Have as we look ahead at the trial. Moderna launching the phase three trial that will include 30,000 patients. What will be key here in terms of this much wider study the main aim of it to see what prevents the virus they may reduce severity of the disease. These would be important end points it will take longer before we can get results. The plan is to follow patients for two years but we hope to get some signal the vaccine is or isnt working before that. Weve had a spike in cases. What do you make ofwhere we stand in just getting through the first wave of the virus . The virus hasnt gone away. With new data in winter months, certainly in europe and the uk, there is concern we might see a second wave. Then, yes, we dont understand everything about the spread of the virus and whether it is droplets and how important the spread is. There is a lot to learn. A lot of uncertainty about what is going to happen over the next few months appreciate the time the head of school of medicine at cardiff university. A European Court is set to rule whether they can earn on back taxes saying the company illegally benefitted to reduce the tax burden theyve filed the claims the uks ban on huaweis technology is about political manipulation the statement comes after the British Government banned providers from purchasing new equipment from 2021. They may be right on the United States side. Once the u. S. Stopped access. The main reason was given down to the main reason and that changed the game and the Risk Assessment from huawei and the uk Intelligence Agency and National Security center they did say huawei could be part of the network and even longer for that, they were campaigning. You could say this wasnt completely politically motivated in any sense and what happened in terms of the technology front. Theyve long suspected this has all been a political game. What is interesting is what happened next. What they eluded to there was some sort of retaliation state media backed this up saying it is necessary to retaliate otherwise, it wouldnt be that necessary to bully without specifying what kind of retaliations, do expect some backlash here. When it comes to motivation, you could say, look, it was political. And it certainly was on the sanctions and what that means for technology Going Forward can i bring up technology and where we stand in 2020, weve had a pandemic, blaming the quarter for that we havent had answers got a National Security law gone into place in hong kong causing some bitterness in the west because of the hand over i will ask you about the future because we are coming up to the election around joe biden. Clearly there could be hopes and change around the white house. Seven years now for huawei to get this right do you think that time could change this decision eventually . It really depends how huawei mitigates the latest round of sanctions. So far, what is your strategy. Let me layout why these sanctions are such a huge issue. They get more of the chips from technology to the base station tsmc are the two most advanced chip factories if they can no longer get chips from its rival, they may have to look to some of the chinese chip makers that one will start trading on the nasdaq style board there smics technology is so far behind tsmc that even if they wanted to move over to smic, it couldnt move all of it. Right now, that path way for huawei is so uncertain now smic, sure, it could catch up it has a huge Capital Investment it raised millions in hong kong that could be used for r d that seven years may not be enough it may not be enough for huawei to figure it out they will need to look for chips perhaps not made it will be more difficult to vet that equipment if it does come in the end, that is still where it stands from what the National CyberSecurity Center is saying it seems they are caught between a rock and a hard place which might make it difficult even in that time period for the Intelligence Agency to change its mind in the company. Thank you very much for outlining that for us. Coming up, a trading are he have knew revival boosts big banks but provisions prove to be the problem. Well have analysis after this hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Welcome back to street signs. Three of americas biggest banks have reported a combined 28 billion in provisions. Setting aside billions in reserves the lender still posted record earnings and trading revenues thanks to strong Investment Banking. Citigroup also beat profit forecast as fixed income trading has surged heavy provisions weighed on wells fargo as it reported a net loss, the first since 2008 Goldman Sachs will unveil the latest earnings today. Bank of america will release results on thursday. Thomas hayes joins us. An incredible report card from the banks particularly when it came the trading income. Also Investment Banking advisory fees on jp morgan was stunning does that bump the scene on the number from Goldman Sachs today . That does offset a lot of the trading revenue you saw. I think this was a kitchen sink quarter. They had to expect the credit loss for this crisis all at once i think the worst is behind us you had the cfo of walls fargo on at 3 00 yesterday he said it is highly likely that 100 of the provisions they had taken have increased they cut their dividend 85 that will save them 6. 7 billion of capital every year it is rumored they will cut abo jobs the last time they cut the revenue was march 6 of 2009. In the next two months, the stock appreciated over 250 off of those lows. Im not saying that will happen this time. I am saying all of the bad news is out now theyve set themselves up with all of the provisioning and set themselves up in a major way to come out of the crisis i want to bring up jamie diamonds outlook. That is not a typical recession. We think about what we know. There has been furlough schemes. That top up payment if you are employed that has made quite a difference where you dont necessarily go to default on mortgages or loans. This could change in coming months because we dont know if it is going to be extended what does that mean as we step away from the stress test models and look at the stimulus in this crisis i think what we are seeing is secretary mnuchin is talking to congress and the Republican Senate is looking to get a deal done it looks likely theyll get at least another trillion dollars passed they had to take 100 of provisions in this quarter in what would be a very bad or worst cased scenario if you get the stimulus, it will be better than expected. The worst is baked in, it is very likely well get additional stimulus and payments directly to the most needed we have close to 10 trillion worth of stimulus, liquidity and aid authorized the fed backstop, which is committed to doing at least 80 million of Mortgage Backed securities and treasury for the foreseeable future until they bring unemployment until they get back to full employment in the single digits, which weve regained about a third of the jobs theyve lost. Inflation target is 2 that means the fed has to stick in there with their backstop until they are well above 2 in order to hit that target really the table is set. Expectations are low just like we are seeing with the global data surprise indices the data continues to be to the upside as well as these opportunities moving forward widening out not just to banks, the cyclical part of the market where weve seen the emerging demand in the other parts of the market and Big Tech Companies that have led the gains. Are we going to see more money put to work in these less loved works on the market. You hit the mail on the head there. The growth bar is so low and sick calls do best in high growth environments. What youve seen in value between cyclicals and tech as you saw in may. Where we saw coming down quickly and pricing in the vshaped recovery we had a shortterm spike in the sun belt and in the last few weeks, you saw tech start to outperform looking in the Rearview Mirror in arizona, texas and florida. Even though they are reporting terrible cases, theyve peaked every single one of them in most cases, it has multiple days or a week since they had a spike in cases number two, the survey has come out from yesterday only 14 are expecting the increase in recovery from the assets where 200 were surveyed we have a wall of worry sentiment that could climb moving forward the number one thing for the v shaped recovery. V equals vaccine we got great news from moderna last night and pfizer last week and the oxford is a front runner as well. A lot of things lining up for the duration on that point in terms of what the market is pricing in, interesting to see that weve had a rally on the back of both pieces of good news. Getting that fast tracked designation. Does this suggest markets were not pricing in in 2021 i think the market is a little more skeptical. Weve had many false starts. The treatments are Getting Better than expected the idea of having the vaccine before the end of the year and to be fast tracted, production is already happening we are in midjuly now the production is happening at risk to the background of these companies and well be in very, very good shape the market in the United States hit about 3,400 on 163 in earnings in 2019 the estimates for 2021 are still up over 163 a share thomas, well have to leave with that. Thank you. That is all for todays show thank you for watching Worldwide Exchange is coming next hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. It is 5 00 in boston your top five 5. Futures surging. Moderna shares set to soar potentially some very good news for all of us. Outside of that, President Trump and china status vowing to retaliate. Oil tensions ricing. An