Here are your top headlines from the bloomberg terminal. Angela merkel, the radical, the german chancellor throws her support behind the euro stimulus plan. She warns her fellow eu leaders that there is no time to lose and agreeing a deal. Is yet to come. The World Health Organization warns that a lack of International Cooperation means the virus pandemic is far from higher as aks push volatile first half comes to a close. Controversiales a security law after the u. S. Commerce Department Suspends regulation allowing special treatment for the city. As i said, just under an hour away. We are looking at futures pointing lower for the ftse right now. Andttle higher for the dax the cac. See euro stoxx 50 futures and ftse 100 futures are down. S p down just slightly as nasdaq futures edge a little higher. Lets talk about anna lets talk about breaking news. ,hell seeing volume guidance 3. 5 million to four point 5 Million Barrels per day. That is substantially weaker. Weakve seen extremely demand for oil in the Second Quarter of this year. But the fact that we are getting these numbers is of interest. Also some interesting numbers that will influence their profitability, the Balance Sheet, lets go through some of those. They see gearing set to increase , many in the sector have been trying to get gearing down in recent years. Inventory volumes are seen higher compared to the and. Of just how much debt there is on the Balance Sheet, debt as a percentage of the other moneys, interesting to see that is on the rise. Contraction revised. Number at the u. K. Economy is for the First Quarter and it does suggest that things have worsened a little bit since the bad number we already knew about. Lets get to the gmm, the picture of the asian equity markets as they are trading. This is what we see. Interesting to see such a mixed picture. Beensian session has better. There is nervousness around geopolitics, the relationship between the u. S. And china. We will come to that story a little later on. We do have better data out of china providing perhaps a reason to be cheerful. That may be underscoring some of the gains that we have made in asia. Matt . Bloombergs get the first word news. These are the top stories. Landmark approved National Security legislation for hong kong according to multiple local media outlets. The unanimous vote came at the end of a threeday meeting in beijing for the nations top legislative body. The u. S. Says it is suspending hong kongs special status, exportit harder to sensitive American Technology to the city. German chancellor Angela Merkel is throwing her support behind a radical Recovery Plan. Joint debt that has been controversial in some countries. Standing alongside french president Emmanuel Macron, the chancellor back to the plan. The worst of the coronavirus pandemic is yet to come. That is the message from the World Health Organization citing lack of noble solidarity. States took u. S. Steps to scale back reopening plans. Posting openings. Day innews 24 hours per air and on quicktake powered by more than 2700 journalists and analysts. Anna . Anna lets talk about the asian market session. Asian stocks advance, set to round out their best quarter since 2009. That is following strong china pmi data. Hong kong gains were more modest as the Trump Administration suspended trade benefits for the city over chinas new National Security law. , what interests you about the Asian Session that you are in the midst of . Underperformance of hong kong . Is it rebalancing very evident to you . Isi think rebalancing definitely a theme. Where it is most apparent is we have seen the dollar bid and equities get the boost we were expecting at the monthend. I think a lot of the shortterm news needs to be taken with a little bit of a pinch of salt. That said, ive been super impressed by the reaction of hong kong stocks in reaction to the overnight news. Many of my team did expect there to be minimum reaction. This has been long priced. Hong kong equities. People are very much focused on hang seng. But that is much more of a play on china rather than hong kong in terms of the composition of its index. Overall, there has been an emphasis that this is a blow to hong kong, but it is a long expected blow. China is much more dominant. Hong kong is still trading positive despite the news. We have seen this constant inflow from china and that is probably more relevant. From the support chinese economy or the outlook for the chinese economy still feeding into the global rally. Goodman was writing about china pmi manufacturing and nonmanufacturing both continue to flash a green light for this global stocks rally we have been watching for months. Mark absolutely. It is another kind of positive notch on the data front, which we are seeing generally in developed markets. China is at the forefront of that. They have handled their crisis very well. The extreme measures to get in front of the coronavirus problem and focus fully on the economy after that. That is why china a year from now will come out of this pandemic and a better place relative to much of the rest of the world. It has been more mixed in terms of how they have handled the virus. That these pmis are diffusion indexes and when we have seen massive slumps, it takes more than a few to getting in where near to where we were only six month ago. I think that overall yes, it will be an ongoing theme, but it is in a world where it has many problems related to the coronavirus threat. Bea yes, it will interesting to see how those prints above 50 relate to growth when we get further down the line. Let me ask you about how you are viewing the coronavirus threat. If we put aside the u. S. , which is a big ask, i know. Other parts of the world, we are seeing smaller flareups after big outbreaks im wondering whether the smaller flareups can be effectively contained and put down in democratic countries . Sure. We are not exactly meet processing factories in various parts. Is that with the markets are interested in . Goingat the risk of beyond my mandate, i will say a few things. Im not overall adjust and i dont want to get to talking about various political regimes. Im not so sure it is a democracy thing. I think korea has done a great job and im sure australia will do as well. I think there are other cultural issues rather than just whether it is a democracy or not. Many other countries in asia have democracies and have had done a great job. Littleas been very second wave anywhere. The real problems are in countries that never controlled their first outbreak. I think that overall that is the positive news. The negative news is the numbers from the u. S. Are extremely worrying. It is still the Worlds Largest economy. The fact that we are getting roughly 40,000 new cases every they have had a 4. 8 running mortality rate, that applies implies that the fatality numbers in the u. S. Could be quite worrying again and that is a thing that is going to be on peoples radars when we get into july and we have not even had the july 4 weekend. It is going to be very worrying in the second half of july, but im not too worried about second wave in the countries that have controlled it regardless of what their political regime is. Matt mark cudmore leading it out of singapore with the mliv team. Thanks for mentioning the fourth of july. Im getting pumped for Independence Day even here in berlin. Hope over fear. Stocks look ready to round out the quarter on a high as Jerome Powell warns of extraordinary uncertain she had. We will discuss with Richard Saldana next. This is bloomberg. Welcome back to bloomberg markets, this is the european open. We are about 47 minutes away from the start of cash equity trading ross europe across europe. Asian stocks extending their gains. Even as u. S. States scale back their reopening plans and more clusters are reported of the virus worldwide. Fed chair Jerome Powell said that while the recent rebound is big inactivity is welcome, it presents new challenges, like keeping the virus in check. Is that really a new challenge . If you like that is the challenge we have been talking about for months. We are joined by richard saldanha, a fund manager at aviva investors. Im pretty sure keeping the virus in check is something a lot of the economists have been trying to do since at least march. How do you think they are faring and how much does it matter to you as an investor . I think right now what you are seeing is the recovery part in many countries is going to be in even. Countries are trying to strike a balance. Can more critically spikes and hospitalizations, that is really where Jerome Powell is trying to get to. The fact that you are seeing texas, florida, and arizona ruling back some reopenings isnt a surprise in some ways. I think for investors, the first half is characterized by a lot of volatility. The message for the second half is expect more of the same here. You are really seeing right now a type of war between the more cyclical parts of the market travel and leisure stocks which have benefited from the resumption inactivity and the more defensive parts of the market. When you think about the second half, lets not forget the ongoing u. S. China trade tensions, it is a u. S. Election year, you have brexit negotiations, that is going to add more to the volatility have going on the next phase for investors, that was obviously sort of a euphoria like response to the announcement that lockdowns were easing, we were going to get reopenings, i think the next phase is going to be a lot more uneven and we expect the tugofwar to continue in the volatility to remain elevated. Anna richard, good morning. I wonder how much room there is to distinguish between different geographies here. Do you think companies in different parts of the world with different geographic exposures are going to be on different trajectories based on their home government thisbility to get through or the markets they serve . There must be ways to distinguish companies from one another. Richard sure. I think the key right now in terms of the volatility is that for an investor, you need to be very selective right now. It is very hard to predict what the recovery part is going to look like. We are seeing all kinds of shapes being discussed. It is really hard to predict what the recovery part is going to look like. Investors, we really think you need to focus on areas where you are seeing structural change. The europeant green deal, 5g network deployment, 5g is going to become a vital part of the economic roadmap going forward. We think these are the areas investors need to focus. Need to generate cash backed by robust Balance Sheets. Trying to shift away from trying to recovery ads because that is going to be difficult and focus on these structural change areas. I think that is really where you need to be thinking right now as an investor. Returns canind of an average riskaverse investor expect here . Is it going to be different postcoronavirus then it was the last three or four years . Im not sure it necessarily needs to be. The reason is referencing some of these structural things. When we think about the renewables landscape and we think the European Green deal is a game changer for a lot of companies. Be offshore wind providers, cable manufacturers, there is a neil real need for the updating of infrastructure and investing further in renewables. There are a wide array of companies that can benefit from this. We think returns can be attractive certainly on a threeyear view and thinking even further longterm. Absolutely i think you can make attractive returns. The key really is to focus on these areas where you are seeing structural changes. The key is you are starting to see that fiscal stimulus, which i think in many ways will underpin a lot of these changes going on right now. We think 5g again we think is really important. You are going to see countries continue to build out 5g networks. We had the announcement from singapore last week awarding contracts. There is a lot to play for not just from a network standpoint, but also in terms of devices increasing content. That is going to play into Semi Conductor manufacturers. Mobile operators. There are lots of areas where investors can focus their attention right now. Anna richard, we will pick up on some of these thoughts, we want to get more detail around the opportunities you see. Richard saldanha from aviva investors it stays with us on the program. Coming up, we also want to talk about income investing. Wells fargo plans to cut its dividend, breaking with all the biggest wall street banks. We will bring you the latest on the way the banking world has had to respond to the coronavirus and what that means for income. This is bloomberg. Welcome back to the European Market open. Just under 40 minutes to go until the start of cash equity trading. European Market Expectations are flat to negative. French futures looking bit negative. U. S. Futures flat to negative. Wells fargo plans to cut its dividend after the Federal Reserve last week set new restrictions on the payout. The lender will announce the new level on july 14 when it releases its secondquarter results. J. P. Morgan chase, bank of america, and Morgan Stanley left their thirdquarter payouts unchanged. Richard saldanha from aviva is still with us. We wanted to mention the story. Last time we spoke, you said there are still businesses paying dividends. Most of the u. S. Business sector banking sector. You made this point in a european context previously. It is easy to focus on companies saying they are stopping dividends payments. What does the investing world look like to you right now . Richard im arguing that investing remains alive as well despite other people who might argue otherwise. We are seeing opportunities in Companies Across a wide range of sectors, so it is not just the defensive areas. You are seeing dividends from health care, staples, etc. There are also opportunities in more cyclical areas. Industries are a good example of this. Really being selective is the key. It is focusing on Balance Sheet, high levels of leverage. The companies with stronger Balance Sheets will emerge from this crisis stronger and have the capital to to deploy into dividends, as well. Again, we think being selective is important, but yes, there are lots of opportunities out there. Matt what do you think about value . Is it time for investors to shift into value can really see some appreciation of those prices . When we yes, so i think talk about value and value investing, i think when what we saw in april and may, there was a big shift in markets. We would almost say that that was very understandable. In the state euphorialike response to the announcements of lockdowns easing, reopenings in various countries, so we think that was almost the first phase. The next phase we think will be more uneven and this tugofwar we talked about at the beginning we expect that volatility to remain elevated. For us, it is about being selective and focusing on the structural growth areas rather than trying to predict what is going to happen with value or Growth Stocks going forward. The greenalked about new deal and how significant that is in our last conversation. A bit more detail in where you see the opportunities being. Grid upgrades to the infrastructure, and that sense . Where are the possibilities for investment . Richard it is a really interesting area for us. It is one that is garnering more attention now, particularly from politicians and you referenced merkel at the beginning obviously looking to encourage more stimulus. We think it is a game changer for a lot of companies. It is the offshore wind providers, Companies Providing cables going into building out new capacity. There is a week real wide array of companies that are going to benefit from this. It is not just europe, by the way. This is going to happen in the u. S. There is an argument that you have an aging grade infrastructure. U. S. And lots of natural events, forest fires, hurricanes, etc. The grid needs upgrading and needs more focus. We think initially you are going to see a lot of investment going into upgrading existing grids and also you were going to see investment going into building up in renewables. There is a lot to pay for. This is something that is going to evolve over time. It is not going to change the landscape in the next quarter, but we think on a 35 your view it will be. Matt richard, thanks for joining us today. Richard saldanha, fund manager for Global Equity income at aviva investors, offering us insight at the close of the first half. The worst is still to come according to the who. This is bloomberg. I got an oriole here. Eh. Common bird. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. To bloomberg back markets. This is the european open. 30 minutes to cash equity trading. You can see ftse futures are down about 0. 2 5 , but very little change on the continent. Lets take a look at what to watch out for, what could decide the direction. At 10 00 a. M. U. K. Time coming euro area cti. Bloomberg economics forecast headline inflation will accelerate a touch. Nothing really to write home about. Half an hour later watch out for the First Quarter gd