Transcripts For BLOOMBERG Bloomberg Markets European Open 20

Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

Fines for not wearing a mask. Jimmy lai tells bloomberg he was arrested on trumped up charges. Our interview with the next didge tillman owner shooter. They push back against a groundbreaking green between israel and the u. A. E. To norlanderalize relations between the two countries. President trump says there is more to come from diplomatic efforts in the region. A very good morning to you all. We are just under an hour away from the start of the cash Equities Trading session here in europe. Lets have a look at where we are on the futures. It looks as if we could see in downside moving at the start, but we are generally drifting when it comes to the Global Equity session from asia to europe. We are expect to go see a little weakness. Some of the futures suggest it could be weaker down about. 2 or. 3 on a futures. Programs a different dynamic in the ftse 100. Lets have a look at u. S. Futures as they point to a little bit of weakness at the start of the u. S. Trading day. We see strength coming through on those futures. It was weak nelson in yesterdays session, weakness in yesterdays session, setting us up. Lets dive into that it shows us where we have been on the asian session. South korea is leading the board in terms of losses. The Australian Market made some morganza. We are fairly flat overall in terms of the asian session. Fiscal stimulus in the u. S. A bit more data to deal with, whether that is improving data in the u. S. Mixed data coming out of china. All of that in. Mix. Dont lose sight of the underlying virus story where we see increasing case numbers coming through in parts of europe where previously programs we thought things were conditioned. France, greece, spain, folks focusing on those earls. Laura cooper joins us. We do seem a little rudderless in this last 24 hours of trading. Into friday. What do we think it is going to take to break things . We seem to be firmly in summer mode, low volumes coming across various markets. More between this ongoing washington standardoff. It is clear that we are not going to see any kind of nearterm development on that front. But then on the other hand we are seeing up side data surprises coming from the u. S. So jobless numbers beat yesterday. We do have this deluge of data today kicking off with jewel retail sales in the u. S. If we were to see another kind of surprise beat on that one, that could provide some uplift to sentiments heading into the weekend where it is all about the trade review. I think it is really kind of directionless is really the way to put it this morning. What is going to matter . What matters most to markets most as we look for the next move in the market now . We have china talks, chinau. S. Trade talks coming on a number of fronts. Not just trade. A lot of focus on the u. S. Stimulus story, although there dont seem to be any dates in the calendar to look ahead to. What is going to matter most to markets . I think right now the escalation on the trade front is likely to be contained. I think if we look at the 2019 playbook, the u. S. Was in a very different position in terms of their economic outlook, their growth trajectory is different today. They are likely going to keep that contained. I think it is more a case on the stimulus fund. When they look at stocks it zers appear that a lot of good news is priced in, and that does lead equities vulnerable to this negative news flow. I think breaking it down, clearly fiscal stimulus is needed to kind of maintain this momentum that we are seeing. But as well when we look at 2020 earnings estimates, they are likely still it too high. We have seen annual e. U. S revise them after earnings beats. Then we have the political risks around the u. S. Election. It is really unclear whether or not some of the potential policies we could see under a biden win. The market are likely sing win about that sanguine about that. In the near term it is about the stimulus. Now that the senate is on recess until early september. We are likely to see clear Forward Guidance from the fed. It leaves markets vulnerable to the down side. We see treasury yields year an eight week high. How do you think that move stands up to the latest news around the virus . I suppose some of it is Getting Better in the u. S. And worsening slightly in europe. Country are reflecting the prospects for a stern economic recovery. This is being reflective when we look at this rotation into sicklyal stocks in the u. S. And in europe. I think really Going Forward what is going to be crucial is whether we do see a vaccine. I think a vaccine is going to be needed to kind of propel this upward lift in yield. I think ultimately, though, given the fact that we are seeing just this economic uncertainty, the fact that we are seeing Central Banks kind of wanting to maintain these easy financial conditions that we are going to see really rangerebound treasuries Going Forward without kind of that catalyst on the up side to kind of break them out of that on a sustained basis. Laura, thank you very much. She was joining us with a look at the markets there. From one laura to another. Lets get a news update. We stay here in london with laura wright. Thanks. Israel and the united arab emrate have agreed to begin normalizing relations. The u. S. Hailed it as a key step toward peace in the region. At one time sides will hold a range of talks in coming reams. Israel has adreed to suspend its efforts to and exthe west bask. Palestinians criticized it. People arriving from malta and other countries have to isolate as shall days. It comes as the u. K. Is easing more lockdown measures and having more penalties. L. Yale university illegal discriminates in its undergraduate programs. That is a letter. It says it useses race as the determining fact torre. They categorically denied claims of discrimination. Under the bloomberg quick take, powered by 2700 analysts and journalists. This is bloomberg. Laura, thank you. Laura wright here in london. Coming up on the program, jimmy lai says he was arrested on trumped up charges. We bring you our interview with the Hong Kong Media tycoon. This is bloomberg. Welcome back to the European Market open. 50 minutes until the start of the trading day. Futures look fairly mixed. A little built of movement to the down side. Euro he futures point higher. Pro democracy activist jimmy lai says he was arrested on trumped up charges in an interview with bloomberg tv. He says he bees overwhelmed by the outpouring of popular support. He also said he thinks the National Security law has already had an intimidating effect. I dont know what they are trying to do. Those people bought the share. It is an expression of support for the company. Think they knew that. The rally was not there. It is just people want to up the s and buying stock. I asked people first when i came out from the police station, i said look, dont buy. You lose money. They just show support. They bought our newspaper at 1 00 in the morning they lined up at the stands to wait for the pucks of it. This is just hong kong peoples support for the newspaper and of the n of the anger rate of the mutual and for myself. The rally in your shares seems to be a bit shorty term. Did you ever consider in the last couple of days, i know you were preoccupied, but possibly issuing more shares to take advantage of this. And do you also have any plans given the uncertainty surrounding your future of divesting . You own 71 according to the latest data on bloomberg terminal of next digital . When people suggest issuing new shares, i think this is a very dishonest way to do it. I tell them that is not our business. Now, what is the future of apple kelly . We will proceed. There is no doubt. You serve a role in this community. You have been critical of the government. You have been critical of china. In an International Financial center, many people say you need accidenting media. You need a platform for these kind of voices to be heard. Are you practicing since the National Security law self censorship and monitoring what you are saying on your digital plate fomples . We cant do that. That diaw is general. En people want to really toe the line. It is a low line for you to toe. We cannot change what we have been doing. We dont think what we have been doing is wrong. You know, we are just practicing the freedom of peech. We are giving the community here a voice of their own. If that is a crime, we cant do anything else. Cow have plans at all to divest any of our holdings . Like i said, at least from march of 2019 is the latest data we have on your share holds on the bloomberg terminal. 71 and change. Dow have any contingency plans to divest or sell those shares . No, i dont. I wont divest my holding in echo daily. We have our presence in taiwan. We are the biggest newspaper in paper nd online, the and online. That is what we would have to ivest. What are the contingency plans . Say for example if you are convicted, we have to talk about that prospect . Yes. If i am convicted, i think the business will go on without me. That was the hong kong democracy activist and founder and chairman of next digital jimmy lai speaking to bloomberg tv. Fascinating conversation. Lets get back to some of the data on the european story. How bad did it get for europe in the depths of the coronavirus lock down . We will find out at 10 00 a. M. This morning with euro area g. D. P. Numbers are released. The survey numbers sees a 14. 1 slump from the previous quarter, and the euro is Holding Steady above 11 to the dollar ahead of that release. Joining us now is evelyn a bank of America Global Research economist. Great to speak to you this morning. As you look ahead to this data, what do you think the story will be, the narrative . The overall number will hide a lot of Different Levels of performance from one country to another. But what will the narrative be . Good morning. I think it is relatively less. It is the second quarter. We know already what that one was. I think the story forward will be the one interesting. We are relatively worried about that one. We think q3 growth will be easy because q2 was lockdown. It is normal that growth was very bad. Q3 will be reopening, so growth will be strong with 8 slightly increase in q3. You only compensate for a small part of what you have lost in q2. This is really where the story is going to be. How fast and how far can this recovery be . We are skeptical. In our forecast scenario, we have minus 7. 9 for this year and 4. 3 for the next. By the end of 2021 we do note get back to where we thought we would be a year ago at the same time or where we even were at the end of q4. That really is the part we need to watch out for. That is interesting. That helps us cut through the quarter on quarter katie and look at the underlying story if you like. How nervous are you about the underlying virus developments. We watched various parts of europe with sw, from france, to germany, to places that up to now have had a very good crisis such as greece. Are you concerned about you about local flareups in these countries . We are. To a certain extent when you increase mobilities when you reopen your economies, it was to be expected that we would get new infection rates again. The problem is we do not have a perfect tracing and tracking system in place. Potentially even cross border, and that makes things very complicated. Our base case is predicated on the assumption that tracing and tracking can avoid you from getting local breakouts growing bigger. You get the kind of surgical approach to lockdowns, to outbreaks, and there by you keep it sort of under control. What we are seeing at the moment is everything us a little bit more worried because we have the impression that the increase in cases is broader based. What we have learned in u. S. Data, and what we also learned in the swedish example and what we are seeing in europe is consumers responding quickly to. That we saw Consumer Confidence in the euro area, and no longer in some places and declining. If that is due to increase in the virus, that would potentially make us respond in our very own way and take our own precaution even without lockdown. That we con not dissect. Both factors would suggest there are risks to recovery. And there is a risk that we are plateauing early. We are watching the virus numbers closely for the risk of this response. And what kind of up side surprise could there be to your numbers, or up side revision to the numbers you have at the moment if we see a vaccine . I guess that depends on a calculation of how long the vaccine takes to roll out and how consumers will behave in the meantime . Yes. We just released that this morning. The vaccine is tricky. The timing matters a lot. In our base case that i just talked about. We assumed some sort of pontiff vaccine or treatment and tracing and tracking next year. The scenarios is about the timing of the vaccine. What if we do get a vaccine in january, and it is available without supply constraints and distributed quickly so by the end of q1 we have a sort of inmanute. In our scenario that could bump g. D. P. Growth higher. Maybe we are talking about 4 bnp 3 or 5. 5 in our next years number. It would be a confidence effect in q1. In q2 it you would front load. You might go to the restaurant. You may travel at more than before. But all of that, it would bump g. D. P. Growth higher, but the point i would make is that we will have lived with the situation for more have been damaged in the economy. Unused labor be it in the form of unemployment or short term week will be high. That comes with disposable income losses. You cant shrug off all of that after one year of virus. So yes, the vaccine in early 021 would be an up side, but within limits. All right. Interesting analysis. Thanks evelyn. Bank of America Global Research. She stays with us, and we will get further thoughts from her on what is going on in the euro zone. Boris johnson is lifting the lockdown in england, but can he keep virus numbers under control . We will discuss next. This is bloomberg. Welcome back to the european open. We still have 35 minutes to go before the start of the cash Equities Trading. But it is friday. Boris johnson is resuming lifting the lockdown in england. Casinos, theaters and bc parlors will be allowed to reopen. But there are tougher penalties for hakem who break social distancing rules. Travelers from the netherlands will have to quarantine for 14. Evelyn is still with us. We will get back to our consideration on the euros, but your thoughts on the u. K. As the latest headlines here are about reopening parts of the economy. What is the underlying eek story at the moment . Are you looking for the bank of england to do . Will stimulus play a bigger role . The story from an economic perspective, us that is a systemic shock. The virus hits everyone in a similar fashion. What we expect in the u. K. Is the bank of england will respond to the weakness with further easing. Their last report or their last communication was a little bit milked. The presentation was hawk i guess, and the press conference was raur dovish. We think given where we expect the bank of go, eek land. That means 100 billion of q. E. In november, a rate cut to zero and a cut in the p. F. X. As well. This is our base case because the economies really need all the support they can get from budgetary, fiscal and monetary policy. Yes. And so from the u. K. , we will wait to see whether we get physical tal stimulus. You have had time to look tu eurozone bailout funds. How is that going to be in shoring up the economy . It is 700 billion euro at 2018 prices. That is more than 5 of e. U. G. D. P. We think the recovery from the next generation is very powerful in terms of political message. Europe has become an option again. You eliminate the immediate down side risk in terms of physical given the plan is over six years. We are not sure how much impact it can deliver very early on. Ok. Interesting signals though. Evelyn, thank you so much. Bank of America Global Research economist. This is bloomberg. Welcome back to the European Market open. Mix. Es u. S. Futures point higher. Eu Foreign Ministers will hold a meeting to discuss the situation in belarus. At 10 00 a. M. This morning london time we will get the second reading of the euro area gdp data. At 10 00 am, russias largest crude producer publishes its secondquarter results. It is set to return profits by gains may not be enough to offset the companys earlier losses. And u. S. Retail sales figures for july. They are expected to read gain continue rebounds. 7 31 in london. Time to talk about one of the companies that has reported earnings. The Danish Company looks to deleverage amid the coronavirus uncertainty. We are joined with the Maersk Drilling ceo. To speak with you. Outlook pping your keeping your outlook. What visibility do you have around this . We have very clear visibility. As we have said, we do not expect to have any significant contract that will influence the outlook. What you are looking at is what is in the book already. What about next year . Will impactthat 2020, but what about 2021 . Anything you could tell us about how that straightens out . Big call most of the Oil Companies put when covid hit us, we see companies on the way back. Especially norway, where there has been some tax relief, virtualize new investments. It is in the territory and with customers that we tend to work for. We have a lot of talk about filling the pipeline for 2021 and we do see it also in other areas where we pulled. N the handbrake some of the customers in the areas on deepwater are doing the same looking at how they can get back with the project they put on hold. Your numbers, you have taken a noncash impairment charge. You say that reflect the current market situation. What is that based on . What does that represent . A technical adjustment in the account. Danish, wes with the have to look at that every time we publish accounts. For us, every half year. We had withlook ebita, abbott. This is the if petition for the future. That is afflicted in the impairment we have announced. We have seen your rivals going to chapter 11, preparing for bankruptcy. Other companies could follow. Is that setting the stage for consolidation . Is. Think it it is what we expect will happen. First of all, we see the o

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