Happened. The bears breathe a sigh of relief. But is it all over as soon as it started . The cash trade is just an hour away so lets see if this has legs. Here are your top headlines. With thes a big blow nasdaq down almost 5 . The s p severs it steepest drop since june. And suffers its deepest drop since june. Bill ackman tells market jitters the National Bank to challenge santander. So, a lot going on today, as well as german factory orders. They are now out. Ofth over month, the gain 2. 8 not nearly as much as a survey, which was 5 . Over the prior number, which was 27. 9 . Yearoveryear, its a drop of 7. 3 , which is worse than the survey drop of 6. 0 . And a slight improvement from 11. 3 on the prior numbers. So during factory orders german factory orders not shining light on this. Just under an hour away from the start of cash equity trading. Futures are down in europe. And remember, yesterday we were looking at gains on the dax of more than 1 . Then we closed losses of more than 1 . Now we see ftse futures down. 5 . Dax futures i guess you can call that unchanged, as well as euro stoxx 50 futures. But u. S. Futures continue to trade lower with nasdaq futures up more than 1 . What do you see on the gmm . Anna let me get to breaking Corporate News first. We got that from ryanair. We heard late last night they planned to raise 400 Million Euros in shares. Well find out if they planned to meet that target. They priced the offering at 11. 35 euros per share. The reason was tactical raising from companies around europe and beyond trying to shore their way through the lockdowns, essentially. The aviation sector has been beaten up. They also want to shore up their Balance Sheet and take advantage of Growth Opportunity should they emerge. The placement of Institutional Investors has ryanair add flights since the pandemic suppressed costs. Thats the optimistic line from ryanair. Well see how that plays out for them. Let me get to the jammin gmm. Asia really catching up with what we saw on wall street last night. The Australian Market down, hong kong weaker. A lot of this had to do with tech sterling. Thats where the momentum has come from, the driver has come from. Yesterday in the united states. What is interesting is what we dont see. We dont see enormous flight or extensive flight to the havens this morning. Yesterday, we dont see a huge move into dollars or swiss franc or yen. Gold is up, but only by a little. Well continue to see what drove the selloff. We will get back to that story and continue to analyze it. Lets do that now. Global stocks fall and nasdaq futures continue to slide. Thats as the rotation away from rotations gain steam among valuations. Lets get to the conversation with laura cooper. Laura, good morning. Have you worked out what it is the text selloff of yesterday tells us . There are many theories as to how specific this is to tech, how much of this tells us about the vulnerability of stocks overall. What is your assessment . Laura ultimately, what it tells us is there is no obvious count catalyst for the selloff. There were some laura sign warning signs that it was warranted. Warning signs the it was warranted. It could have been some profit taking ahead of the payroll print today, or just investors not wanting to carry risk into the long weekend. But the selloff is largely concentrated in u. S. Tech. I think it tells us there was some neat to skim some froth off these valuations. Ultimately, i dont see this as a sustained rush for the exits, notably not just in tech, but more broadly within this global risk on environment likely to prevail. Matt what does it mean to you id onwe didnt see a big b safe havens, treasuries, gold, yen . Not a lot of money flowing into those. Laura ultimately, conditions are still there to support broader risk appetite. Its goldilocks conditions where Monetary Policy is accommodative. Investors still expect fiscal packages to come through in the u. S. Were already seeing that in europe. We are seeing central bankers continue to talk about accommodative conditions continuing. The fact that we arent seeing this broad risk off environment shows its concentrated in the concerns of frothy tech valuations or frothy equity valuations. When we look at the european price action, we did see relatively downbeat, but it was contained. And its given limited exposure to the tech sector. Anna and laura, i know the markets live team, youve been asking this question today, how long until stocks regain record highs . I wonder what responses youve been getting. Because what ive been hearing is further selling before we get back to those levels. An ruskin at Deutsche Bank saying how the s p could fall 10 . The s p could fall 8 . Also, nasdaq stocks still looking vulnerable in their view. What are you hearing on the markets live this morning . Laura i think if we look at yesterdays selloff, and nasdaq in particular, it only brings us back to the levels we saw a week ago. Overdues correction was and certainly there is a reality check needed when we look at the exceptional gains in equity markets in the summer. I think Going Forward its a case of the technical momentum indicators clashing against what were seeing, as well as the fundamentals [no audio] so which of these will win out to point out the risk off remains to be seen, but ultimately what we have been seeing is this by the drift mantra. Its likely to be tested but more likely than not, we are going to see more support for equities just given the fact that ultimately the Financial Market conditions havent changed that much. They still remain highly accommodative to support this risk off backdrop. Matt for the sake of Retail Investors, i hope youre right. Laura cooper, thanks very much for joining us. Were going to get back to the markets, but right now i want to do your first word news stories. For that, we go to laura wright in london. Republicansrats and Work Together to avoid a Government Shutdown before the president ial election. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin made this informal agreement tuesday. They dont want a stalemate. Prime minister Boris Johnson is facing accusations of hypocrisy after speaking to a packed room of tory mps. At least 50 people were crammed into the meeting despite only 29 are allowed in due to social distancing. Minutes after it finished, they had gatherings of more than 30 people of are illegal. France may extend its furlough. Speaking on french television, the finance minister Bruno Le Maire indicated the government is ready to spend more than 100 billion euros it unveiled earlier in the day. If the crisis gets worse and they need to do more, they will. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Matt, anna . Thanks very much, laura right here in london. Big topic of conversation is the text selloff. Havens have hardly budged. Is the selloff just eight stocks issue . Is a tech issue . We talk that next. This is bloomberg. Valuations for the Technology Landscape got into some pretty extraordinary levels. So, i think its not a surprise. The discrepancy between growth and value stocks has been on the table for a while. Seemed toent seen be able to hold a significantly where they stay in favor. As a stock prices continue to go up, volatility goes up, too, which is not a normal relationship. Its normally inverse. 20, 30t that we upended years of that relationship and are starting to get that, that made me nervous. Theres been a lot of free money everywhere. You had some latecomers, the craziness in this 2020 summer of love for investors was getting out of hand. Then theres the robinhood shenanigans that have been going on. It wasnt a surprise. If you have too Much Technology in your portfolio, this is the time to take a little bit of it off. A lot of money has been made in tech, so not surprised there was more movement here. It is the beginning of a healthy correction. We havent seen a dramatic pullback. It will move markets. Matt those are some of our guests reacting to the selloff in tech stocks in the u. S. , the nasdaq severing its biggest slump since march. Despite the drop in equities, moves into haven assets were muted. So maybe investors were just holding cash. Treasuries and the dollar steadily gain. Gold ticked up slightly, traders see little risk for now that the weakness is anything more than froth coming off an overheated market. Were joined by esther racial, fx strategist at commerce bank. There wasnt much of a safe haven bid, right . That something that would be clear to you in the fx market. Esther absolutely. Not in the traditional safe havens, swiss francs, any reactions. Yeah, even the dollar didnt appreciate further. Anna it didnt. And you do expect the dollar to go down, so this is in keeping with your longterm strategy. Voices you one of those backing that dollar lower trend . Esther because there has been a Material Change in the Monetary Policy strategy of the fed. They wont stay lower for longer and they shifted their focus more to employment, away from inflation, and the indicated that they are accepting higher inflation. Policy by monetary the end of ecb all along and nobody will talk about normalization of Monetary Policy in the years ahead. Has known that for a long time. Great, although we heard the yen divide was saying youve got to get back after this crisis normalization. And we dont expect much from the ecb in terms of more extraordinary policy action in this coming meeting, do we esther . Esther we dont. Because theres possibility to ease Monetary Policy further. Weve seen measures they took in march at the heart of the crisis. It doesnt make sense to cut Interest Rates further. There is also that much impact of further extension of quantitative easing. So if they can do more, the forer keep the situation where emergency measures are necessary. Right now, its more to maintain the recovery. We are not in emergency mode anymore. Anna do you see signs of an fx were growing or in progress all war growing or in progress already . I read about skirmishes among central bankers. For example, the ecb and new Zealand Central Bank indicating theyre open to do more to support their economies, to byproducts that can be a weaker currency. Esther clearly. This is a discussion in weaker moves. It has impacts on the real economy and thats certainly not notthing we want, at least in that not as a dampening factor. And they are looking at the euro. The euro is having an impact on the economy. This discussion fired up again. With thei still think g7 Central Banks, they target rates. Its a fight that only knows losers. I dont think anybody, particularly in this situation, would really consider direct market interventions. The ecb can basically only accept this. Theres not much they can do about this. Matt exactly. 118. 45. T theres not much more the ecb can do. Jerome powell manages to stay dovish, get more dovish, whats your focused forecast for eurodollar . Esther we are expecting eurodollar to move about 120 for the end of the year in a sustainable measure, sustainable basis. We actually expect zero dollar to continue the most in the next year. On the one hand, its monetary policies. On the other hand, its inflation. We do not see if the ecb manages to revise inflation in a substantial manner, and you know, Central Banks dont counteract it, low inflation is actually going to be supportive for the currency, in particular if you expect on the others that the fed will manage to get to higher inflation and wont do anything. This will not automatically result in higher rates. Had in our opinion that it favor zero dollar now. Favors eurodollar now. Anna esther, thank you very much. Stay with us. Esther stays with us on the European Market open. Coming up on the program, its jobs day. The u. S. Labor market is seen extending its rebound. We got mixed clues in yesterdays job data. It dropped below 10 for the First Time Since the pandemic struck. Well get analysis next. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. Looks like 39 minutes away from the cash equity trade. European futures have been bouncing around a little bit today but were now looking at substantial drops on ftse futures of7 , dax. 2 after we saw european stocks drop yesterday, and then the plunge in u. S. Stocks came, of course, after the european close. Speaking of the u. S. , were going to see a jobs report. Bloomberg economists expect gains in payroll to continue, but at a slower pace. Employers added 1. 3 5 million august. In we asked some of our guests what they expect. Janet says recent labor market data says the pace has slowed. We expect an increase of 1. 5 million. Dominic says participation could have increased in august. Increase a 1. 6 million in payrolls. Another says a number is likely to come in close to consensus, but also up around 1. 5 million. All of these forecasts above consensus, and yet the whisper number is only half of that. Esther is still with us. Esther, what do you expect from the number . Esther we also expect pace of recovery to slow. It doesnt matter much for Monetary Policy because even at 10 , Unemployment Rate slightly below 10 , we are far below maximum employment. So its limited. Anna the impact from the dollar is limited. What is the longterm link from the u. S. Dollar and unemployment story . Because the fed has always had a dual mandate. But we heard more when we heard about inflation targeting. We heard about how theyre going to treat the new labor market. Is there going to be a link between the jobs data we get and what happens to the u. S. Dollar . Esther actually, i would expect this link to weaken, because its not about deviations but about shortfalls. Are notng as we significantly advanced, significantly past the maximum implement target, it is clear theyre going to stick to policy and consider easing. The general dampening of the u. S. Dollar, it will only become much stronger if we are getting closer to the inflation target and if we were we are at levels considered to be maximum employment. Matt i want to bring you back to the u. K. Before we lose our time with you. I can understand a stronger eurodollar if you look at fiscal union. We crossed the rubicon into shared debt this new rescue course, the fed is doing what it can to put the dollar side down. I dont get the pound. It was at 135 last week. You got the coronavirus issues, what seems like a lot of confusion in the government and then brexit quickly approaching agreement insight. Why is the pound so strong . Esther something weve looked at repeatedly since the brexit referendum, that pound sterling traders are staying quite calm for a very long time, even as a events are approaching. Thet now, also due to experience of brexit negotiations so far, everyone expects at some point a deal will be made or they will prevent a hard crash at the end of the year a real brexit negative forll be the eu as well as for the u. K. They will come up with something. Rooted. Something deeply although we have risk factors with brexit, its not manufacturing right now. Matt thank you for joining us, esther. Matt welcome back to Bloomberg Markets. This is the european open, 30 minutes until the start of cash equity trading. Well see what happens after u. S. Stocks lost a heck of a lot of ground yesterday. The nasdaq fell 5 . Plunge fell its biggest in nearly three months. Tech shares took the brunt of the beating, knocking down the biggest flyers of 2020. Back in london, to put this in context, is dani burger. What do you make of yesterdays rout . Dani its just all really about tech. You can see it clearly, the trend is your friend until its not. Over the past month, really since the march low, we have seen the nasdaq, which in my chart is the green bar, leading on the way, much better than the equal weighted in blue and the s p 500 in white. When something is on the way up, it becomes high beta. On the way down, he mentioned it was down 5 . Look at the equal weight in blue. It did nothing like that, down around 2. 5 . Its really a head scratcher why this happened yesterday. Tech valuations had been a concern for some time. Maybe it was september. People were back for their august holiday. But it wasnt just tech. It might be more concentrated than that. If we look at the next chart, you can see the names that took some of the biggest beatings. Its what barclays called the biggest concept stocks, things like tesla and zoom. I included apple. Look at zoom. Its the bottom one, falling nearly 10 . Where did the money go to . It certainly didnt go to havens. The yen not really budging. This is in a Broader Market risk of. I know you and i were talking about if it didnt go to havens, where did it go . Money did go to some cheaper stocks. Carnival, the cruise ship operator, gained more than 5 yesterday. And United Airlines gaining more than 1. 3 yesterday. There were some up stocks and it was in the less love to sectors of the stock market loved sectors of the stock market. Anna that interesting, if you take your money into something undervalued and put it into stocks really deliberately beaten up because of the coronavirus. What are analysts saying about the next move . Dani i think because of that concentration, analysts arent too concerned. Barclays say they think markets will be able to continue to climb the wall of worry. We heard from socgen, saying the volatility built up was to protect investors for upside risk. One note of caution comes from pepper stone. They said we had this upward trend in u. S. Futures. And what happened yesterday is it breaks out of