The bloomberg. Back to school. Boris johnson appeals to parents to send children back to class even as a resurgence in the virus in europe hits hard. Saysu trade commissioner he is profoundly sorry for attending a golf dinner in the midst of the pandemic. Of as push higher on hopes thaw in u. S. China trade relations area and markets turn their attention to this weeks virtual jackson hole and the fed fighting crisis measures. Trump and powell both on thursday. More than 100,000 people protest against the fellow russian president in rainy minsk the belarusian president in rainy minsk. We are just under an hour away from the start of cash equity trading across europe and in the u. K. Lets take a look at futures this morning. We have some decent green a percentre than half gains across the indexes. One of the reasons is optimism that the u. S. And china are going to get along a little bit better amid reports administration is telling Tech Companies they can keep working with tencent. Take a look at equity indexes. After finishing higher for a fourth week on friday, they are up yet again today to kick off the week. S p futures up 0. 3 . Lets pick up on the gmm talking about we chat, the tech story. That is having an impact on hong kong. The hong kong market, the hang seng up. That is the tencent name and other tech names to the upside. Asian tech getting a boost with what you talked about in terms of the relationship between the u. S. And china. Also in the mix, what the u. S. Is doing on the virus itself. The vaccine is being talked about in some quarters. If that is the case, is that going to be positive . Blood Plasma Treatment also seen as a positive. Back foot. Dollar flat to negative. We have the jackson hole symposium taking place. This time it will be more virtual in terms of that symposium. But it is taking place. Three minutes past seven them in london, lets get a first word news update. Has aent donald trump coronavirus treatment that involves blood plasma from recovered patients will be expanded. Widens access to the before researchers know how works. The white house is considering fast tracking the Oxford Astrazeneca vaccine. A bill to Roll Back Service cuts at the u. S. Postal service after concerns the changes could hit male in voting. Lawmakers have allocated an additional 25 billion dollars, but the Postal Service is concerned by requirements. They see it constrains the ability to increase efficiency and reduce costs. Phil hogan is fighting to keep his job after attending a golf Society Dinner during the coronavirus pandemic. It came after the government said no event should be organized that cafes and restaurants. Hogan had a key role in trade talks with the u. S. And the u. K. Tropical storm laura is making its way to the caribbean. It has hit haiti and is closer to cuba. It will make its way to the u. S. Gulf coast which faces a double whammy. Hurricane marco is rushing to the mainland in louisiana today. Over half of all oil output in the gulf of mexico has been shot. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt stocks rising in asia. You pointed out those gains in hong kong big. Tencent adding 30 billion today area today. The u. S. Also showing gains in futures today as investors are looking ahead to a policy speech by Jerome Powell later in the week. The virtual jackson hole summit, we will cover that event for you thursday and friday. For more on the markets we are joined by mliv asia editor Garfield Reynolds in sydney. I wanted to ask about positive developments that we have had in data. You put up a chart on the mliv blog showing data points have the previousten , thaty a big large and was after a big drop and there are a lot of things that skew the picture. In the immediate scenario, this is quite positive. That is one of the underpinnings for todays rally. You cannot really treat data at the moment the way you might normally treat data. Is seasonally adjusted. That means it is taking into in your standard sort of the year where in the summer people were out doing the work, going on holidays. Way areout the massively the way our lives are massively different this year and that makes it so much harder to try and treat data the way you would normally treat data. Also beatingat, the previous indicators. You cannot really blame investors for looking at that and going, this is positive, because you cannot just exclude data altogether from your calculations, but i tend to think they should be discounting the potential for a lot of problems later on. Inevitably, the surprise factor will turn the other way. With relative to last year. Anna let me ask you about the tech rally. In asia there seems to be a number of reasons this morning to be optimistic about tencent lookinghat or perhaps ahead to the u. S. Election, some investors thinking about the possibility of a bite and when biden win and maybe that clears the way. Story is veryech interesting this week. Is how is concerns the Trump Administration going to deal with tech . The backdoor channel comments, chat, that about we has reassured investors that there will not be any bite, which would reinforce some of their expectations into election season. Let us see how we get this week with Republican National congress. We might get more harsh rhetoric. Will we get action . If we dont, you also mentioned , might limitential any downside. That downside is there to be explored if investors get spooked by some actions that might be taken. Anna next on the program, looking for inspiration. Investors are most overweight european stocks since 2018. Stoxx 600 looks to find recordbreaking gains of the s p 500. We will discuss next with the coutts cio. Matt we are 48 minutes from the start of cash equity trading looking at green arrows. Top corporate stories from the terminal, Goldman Sachs expects almost a quarter of the temporary layoffs in the u. S. To become permanent. It says some 2 billion could remain unemployed well into 2021 while the transition rate from temporary to permanent layoffs remains historically low, the figures nearly doubled from june to july. Some of alibabas biggest investors have converted liens of dollars in u. S. Shares for hong kong stock. That is in part to avoid potential u. S. Sanctions and the delisting of chinese Tech Companies. The firms include Billy Gifford and matthews asia. It is a sign rhetoric from the white house is prompting investors to take measures to avoid the fallout. Saudi aramco has reshuffled its senior management. Inis putting a Top Executive charge of portfolio optimization as the Worlds Biggest Oil producer just lowered crude prices. Adjusts to lower crude prices. That is your Bloomberg Business flash. Investors who have tiptoed into european equities have 20 reasons to stay put despite last weeks selloff. The stoxx 600 has outperformed the s p 500. Part of the economic and Pandemic Recovery stories still look stronger in europe, though cases are rising again. Europe also has unprecedented coordinated fiscal stimulus on inside. We are joined by alan higgins, cio of coutts and co. Let me start by asking about european stocks. The yeartodate numbers, the u. S. Performance today is so much stronger when you look at the essen and the nasdaq versus the snp and the nasdaq. P and the nasdaq. We still like u. S. Equities as well. At the margin we are focused more on value areas. What we know about the United States is the u. S. Stock market is not necessarily the economy while in europe the stock market is the economy. Yes, allocating to more typical value areas, and when you allocate to europe, you are adding value here. Does the vshaped recovery theory still hold up when we see things like 5000 new infections in a day in france . We are starting to see a real pickup in virus cases here in europe. It looks like it could be the second wave. It does look like that. Firstly, weped, know nothing, which is always a good one. If you look back in history there has always been a vshaped recovery from every recession. We are aware this one is quite unique and a very different type of recession. In the u. K. , hospital bed admissions for covid are down 90 from the peak. The burden on the Health Services much much less. A way to goou have through. That is what we are seeing this vshaped recovery. Anna the consumption side. Let me ask you about value stocks. Where are you looking within value to seek some kind of pickup . U. S. , it is not just ope where you have these this mismatch, if you like, between the parts of the stock market that are unaffected or even has benefited from the severe recession and the Health Crisis. If you look at the united bankerswe have added to for example where you have jp morgan or circa 12 times earnings, dominates the sector, and a 4 dividend yield. When you look at that, the ational u. S. Stocks, you have stock market in the u. S. , so even in the u. S. You can allocate, it should be said that comes from a starting point of overweight growth and quality sectors for quite some time at coutts. What we are doing at the margin by adding to banks, by mitigating that. Stocks, isg to bank that i mean, that is a real vote of confidence i would say. I am assuming it is not acrosstheboard the board European Bank stocks, but is that a really good sign for the recovery, that you think bank stocks are going to be healthy . You are right. Recall, we focus more on the debt side. Especially subordinated financial side. Creditor ofeing a National Champion banks in europe rather than stock investors. Where higher return on equity is enforceable and huge provisions have taken place by the major banks, we see more possibility for the Equity Investor in the u. S. We have not quite got in step of allocating in europe. That tells us a lot as well. We are going to get more from the cio of coutts briefly. Coming up, jackson hole goes viral. Investors wait for signals from Jerome Powells speech on the move. Next crucial policy we will discuss what to look out for. For. Anna 40 minutes until the start of cash European Equity trading. Jackson hole is going virtual. The feds procedures annual fixture has been pushed online by coronavirus. Investors will be looking to Jerome Powell beach on thursday. He is expected to talk about the lower rated feds review. Also speaking are Andrew Bailey and philip lane. Alan higgins, cio of coutts and co. Is still with us. The bond market is holding on to all details around inflation this week area what will you be looking out for . I know you are in general underway government debt. What are you going to be looking for from a u. S. Treasury perspective . A may be interesting to the they will have inflation. We are seeing slightly higher inflation globally, quite natural after the amount of stimulus, actually cash injection. If you look at it from our perspective as an investor, what. E see is inflation rising the central bank is going to say we dont care. We saw this in 2011 where inflation went beyond that. Interested i in that very interested 5, 6, seven number, the kind of numbers Central Banks find it hard to avoid. The nightmare scenario for bonds and risk assets, would be higher rates. For now there is a big tail risk. Central banks actually reacting to inflation. Reassurings would be , how they ignore an uptick in inflation. Matt on the consumer level we hear about it all the time with groceries. On big ticket items, you really do not see manufacturers with that kind of Pricing Power. Im thinking about cars or appliances. Do you think they are going to be able to get that Pricing Power back even with this wave of bankruptcies and incredible unemployment numbers . Bankruptcy is very much on the u. S. Side, you are right. There is a oil and retail oriented bankruptcy uptick in the United States area not so much in europe. You just have to look. If you look at the money supply numbers, they are in terms of high. But it isr point, business 101. If you have the chance to raise prices that all, you will definitively. Tentative signs in the u. K. For example, car prices are holding their own. There seems to be a boom in people wanting cars if not increasing in terms of secondhand prices. We would expect modestly higher inflation. Central banks will just ignore it. Anna Central Banks will ignore it. What about the credit market . You have talked about the default rate. U. S. ,y in the particularly for large companies, i suppose. How difficult do you think the situation will become . Because of the nature of chapter 11, the ease of it and the ease of the company is reinventing themselves very the leveraged u. S. Oil and energy area, i think we are seeing a default cycle. Europeansed on europe, credit not quite interesting with the fact that basically one, structurally you dont have chapter 11, two, you have Government Support of corporate sector. Credit i think is still an attractive play. When you go to higher credit you have the Federal Reserve and the bank of england also bank credit. It is hard to say about certain aspects of the u. S. Equity market. Really appreciate your time this morning. Great to have you with us. At coutts. S, cio next, new covid concerns. We were talking about this with allen in europe as the continent seems numbers climbing again. In some places, to records we have not seen since the middle of april. This is bloomberg. 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. Anna come back to the European Market open this monday morning until the start of cash equity trading. U. S. Futures point to the upside. Asian dominated by optimism around tech stocks. Coronavirus treatments based on led plasma from people who have recovered from covid19 is set to be expanded in the United States. President trump is calling it a powerful therapy even the researchers are yet to fully understand how well it works. In europe, a resurgence of the virus. France reported almost 4009 hundred new cases over a 24 hour jumpd, the largest oneday since the previous peak in mid april. Maria tadeo joins us from brussels. What is the picture looking like across europe . The number of cases climbed to levels we have not seen since april, may. Yesterday the french put out that data that shows a big oneday increase. When you look at pain, now very much the epicenter in europe, cases have just rocketed in places like madrid. The government is under huge pressure to declare the state of emergency once again. The idea of a second wave is now openly talked about in spain. The numbers have not changed across europe and that is creating a lot of worry that perhaps we are going to see more cases climb up as we get to the flu season. Also questions as to what does it mean for the recovery . With theoing to happen school year . This is a crucial question for europe. Schools open in two weeks time. It is key for parents to go back to normal work hours. Are we going to be able to open schools . A lot of people are saying the Mental Health of children to get back into those schools. I wonder about the economic equation here. We have heard so Many National leaders say they are not going to back along lockdown. What are we seeing already . People who have canceled vacations in the past week. Im sure retail is being affected as well. Masks are being required a lot etc. N what are we seeing in terms of the effects . The country cannot be stopped once again. The Italian HealthMinistry Said he does not see any work a lockdown a need for a lockdown. If you look at the situation right now for a country like spain, it has been a summer of mystery. Hotels,seen restaurants, say this is not a summer like we are used to. About one for every three cancellations. You had very strict new rules come into play like not being and that for a bar, for a restaurant, it is difficult because you have to accommodate that eckley and it costs money. You also see in italy the idea, these restaurants have to close earlier because of young people that are spreading coronavirus. They go out, they drink, they dont respect the rules. You have to take in less people and close earlier than usual, you are not making that much money. We heard last week from Angela Merkel and emmanuel macrons adjusted a lockdown should be avoided at any cost. If youre going to do that you need to do other things. What measures have they taken to control the virus without fully locking down economies. That is a big question at this point. Governments are taking measures. We have seen italy say we are going to cut closed on our night life. You have to wear a mask. There is already speculation that the french are going to make the use of masks mandatory at all times at work. We have seen social distancing has been reinforced. That does make you question what do you do next. A lot of this has to do with stepping up testing and also tracing when you get people coming from other places and that particular area of testing if there able to link is someo