Transcripts For BLOOMBERG Bloomberg Markets European Open 20

Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

These are your top headlines from the bloomberg terminal. , nancyg the deadline pelosi sets a tuesday time limit for more progress on u. S. Fiscal stimulus if the president wants a deal before the election. Backing down, a bloomberg exclusive says the u. K. Good rewrite its lawbreaking brexit bill, a move that may revive talks with the eu. Sterling gains on that. Plus, restrictions tighten as virus cases surge around europe. Italy is the latest government to add lockdown measures, prioritizing its struggling economic situation. Under one hour away from the start of cash equity trade in europe. Lets take a look at the futures this morning. If you pull up the European Equity Index Futures you will see a pretty mixed trade. You have ftse futures trading a little lower, now bouncing off up about a quarter of 1 . Ftse futures are a little changed right now. Take a look at the u. S. Futures picture. You have more green arrows there. Dow jones and s p many contracts up 7 10 of 1 . Nasdaq 100 many futures up 9 10 of 1 . What have you got on the gmm screen . And lets put up the gmm see where we have been through the session. U. S. Futures pointing higher. The upside. Adly to interesting to see how positive things are in japan. Japans nikkei 225 raising its losses for u. K. 2020. We talked about the European Markets and where we see that taking place. Whether we were going to see the get back intoy positive territory. The dax is down by 2. 6 year to date. Thats the best performing in europe. Europe is by the u. S. Where the nasdaq is up 30 year to date, and now behind asia with japans market. You can see that red headline. Thats what weve got in terms of the big picture. We have a lot of talk about stimulus. Stimulus in the united states. We will talk about that with the markets live team in a moment. The pound has been on the move in the asian session. Credit downgrade when things kicked off in sydney. Moving a little to the upside. We talk about the possibility of watering down the mark entre version legislation. The new Zealand Dollar getting a boost from the fairly definitive victory. Gdp data from china in the mix. We get to that and a moment. But getting first word news update from laura wright. Laura there is optimism of progress in washington. How species House Speaker nancy pelosi says a deal remains possible, but a tuesday deadline is set for making way with the white house. Getident trump says he will the gop to get a good deal. Going beyond the dollar amount thats on the table. New zealands Prime Minister has won a landslide election victory. Voters were turned her labour party, a majority with her biggest share of the vote in more than 70 years. Since new zealand reported proportional representation in 1996. There is a Coalition Government that will increase the green party. Azerbaijanty between and armenia has collapsed hours after coming into effect. Its the second by russia that failed to stop the virus. A traded accusations of who had violated the agreements. It comes over a longrunning context in the region. Global news, 24 hours a day on air and at bloomberg quicktake, powered by more than what he 700 journalists and analysts in more than 120 countries. This is bloomberg. Laura wright in london with your first word news. Asian stocks rise along with u. S. Futures amid optimism about progress on stimulus talks in washington. U. K. Officials are paired just prepared to water down controversial legislation in a move that could revive failing talks with european union. Lets get into the markets with mark cudmore, bloombergs mliv managing editor out of singapore. I guess we will start with brexit. Angela merkel suggested the eu could budge on state aid rules. What do you suggest . I think its great pulled sides have a little bit of compromise coming. U. K. My water down the controversial legislation that has passed a month or so ago. The fact that both sides are showing some sort of compromise is giving investors a small bit of hope that we are going to ultimately end in a deal. The reason we are only seeing it relatively subdued is that a compromise will be reached. We knew that last weeks deadline would be fudged. We knew it would be under pressure and get a small relief rally when it was fudged. That is the way we have been expecting all year. To anotherh forward deadline and we will play this again in a months time. Anna something to look forward to. Good morning. Let me ask you the markets live question of the day. This is something that for a long time we were fixated by. Preelection stimulus affect assets . Nancy pelosi setting a tight deadline. The deadline is not far off. Just tuesday, tomorrow, is this still a preelection issue for markets . Do you think markets are almost happy to leave this until after the election . Have a think it would massive shortterm impact. I think precisely because for most investors this is a postelection issue. I dont think this new debt by makes any difference, aside from keep the hope and the story alive. We have known it has been hard to get a compromise because its not about the white house and the house democrats. Its because the Senate Republicans are not willing to go higher. I dont see how that will change going into the election as trump does much worse in the polls than he was a few weeks ago. Senate republicans might be aware there could be a new leadership in a months time. I think its very unlikely that this changes, but it does keep hope alive. It means when the deadline is passed we get a little disappointment and we have a negative backdrop so it will play into that. Is a very unlikely chance that we suddenly have stimulus and it would have a very powerful shortterm impact because its expected to be next year and not this year. Matt i guess we talked about brexit, the election, and that leaves covid. We talked about italy at the top, but ireland could move to a level five lockdown today, which is like con one in coronavirus one in death con coronavirus times. Do think investors will be worried these measures will be too rk only in . Draconion. Mark it will drift into other countries as well. Polarizingt is very what should be done. We think rising case numbers exhibit consumer behavior. If we have a restrictions, that only happens more. Economic recovery will be hit because companies will suffer and we know that most likely, asset prices have to fall until we change the liquidity equation with more stimulus paired stimulus. Anna the fatality rates we are watching. Mark cudmore, Bloomberg Markets live managing editor. You can join in the debate and getting get into the question of the day. Would preelection stimulus affect assets . Reach out to us on tv on your bloomberg. Up next, a continued recovery, chinese gdp growth accelerated in the Third Quarter. The nations economy has regained all ground it lost in the first half. The gdp number came in below estimates, but we got other numbers that beat estimates. This is bloomberg. Anna welcome back to the European Market open. 50 minutes until the start of equity trading. A mixed picture coming in for the futures market here in europe. We are expecting downside or in underperformance on the london market. We are seeing a push higher in the pound because of some of our colleagues reporting around the Withdrawal Agreement bill. Lets get to the big picture story, the growth story coming out of china. Chinas recovery continues. The headline gdp never came in short of expectations at 4. 9 . Growth accelerated in the Third Quarter while retail sales both beat forecasts. Our Bloomberg Markets coanchor Tom Mackenzie is with us from beijing. Great to see you. How much should we read into the gdp numbers and the fact that it missed estimates . Some people are saying it missed estimates, but that had to do with imports and things that could be interpreted as good signs. Tom the number we got for the Third Quarter was 4. 9 . The forecast was 5. 5 . Quite a ways off what the economists expected. The people we have been speaking to today, economists, and jpmorgan earlier this morning has said that you should look through that, effectively, because the important numbers are tracked from the overall gdp. Even though higher imports is positive for china. You are looking at growth of around 0. 7 . Its made up from the loss of momentum we saw as a result of the pandemic. It sounds pretty anemic, is well away from what officials hoped to achieve for 2020. They have been looking at 6 . The when you look at china when you put china along other economies, its not positive. There is one reason we are here in this massive Fulfillment Center run by the ecommerce giant jd. Com. We knew retail sales would be important. We saw growth at 3. 3 . Well above what we saw in august. It was the missing piece of the puzzle for many economists concerned for chinas economic momentum. There was chinas consumer . Now it seems they are feeling more confident and theres a suggestion that if you see retail sales at this pace or higher, then that momentum could continue. Industrial production was high at 7 . Fixed asset is relatively strong. The sustainability remains a that thethat now consumer is chipping in, some are suggesting the momentum should continue. How solid are things looking on the experts site export side of things . Tom exports have been a key component of the recovery because postpandemic when they were able to get the virus rapidly under control, they fired up factories again and make up for that demand, or at least meet the demand they saw from europe. Medical supplies and electronic equipment with the work from home work from home shift. Given the severity of the virus situation in europe and the u. S. With demands on chinese exports. Certainly that is a risk that is being flagged. Other risks of the perennial issues around debts. Officials have been talking about leverage in some parts of the economy. Areother component u. S. China tensions in the background. If you get a more severe pickup intentions that could prove to be a drag. We are not out of the woods, but the economic recovery has broadened in terms of the momentum. Well have to see what happens when the consumer kicks in. Matt thank you for joining us. Tom mackenzie, Bloomberg Markets anchor out of beijing talking to us about the big economic story to kick off this week. Lets turn back to europe. Millions are facing tighter resurgence as infections continue sweeping across the continents. Still, governments are clinging to the idea that fullscale lockdowns can be avoided. Most governments, that is. Italy and else minimal changes to its coronavirus policy. Last night the Prime Minister said, the country cannot afford a new setback. However, in ireland we could see travel restricted and nonessential stores shut down when the government votes today. We are joined by the chief european strategist at bearings. Gettingre the markets used to this thing being around longer than we previously anticipated . He spanish flu was two years do you think markets are pricing that in . Exactly whats happening right now. People are understanding and Market Participants are understanding that this virus will stay. Even a vaccine would not do anything. Social contact, restrictions would have to remain in place. Might not recovered to the same the same status that they were before. That set us up for the earnings season i had . I was reading some commentary from jeffrey saying the mother of all profit turnarounds is coming in the Third Quarter, that depends on visibility that individual businesses have to make it through the winter. Agnes that is a complex question. There are several parts that are moving at a different pace. You just talked about china and china is doing really well. Equipment fromhe germany and the luxury group from france and italy, you really have to rally into the detail about earnings. We know that the virus is here to stay. If we are locked in at home, to some degree, then tech is also having the time of its life and is not going anywhere, vaccine or no vaccine, tech will stay. New tech hasof accelerated three to four months, more than you had in the last 45 years. 45 years. One has to be discriminating about pockets of values that are there on the markets. So, some stocks are going to do well in a continued lockdown. I wonder about the bankruptcies we have been warned about, and so far have not seen. At least not the cascading bankruptcies that joe has talked about. Do you expect that to materialize in the Fourth Quarter . Europe, it has been in many years. Ny, the governments right now are carrying the economy. They are supporting companies with payouts, with guaranteed loans, supporting households. 8 of the population right now in europe has been on furlough. So about a third of where it was at the april pick, which means there is still room for households to go back on this, and governments do have the means to support them. Where the Fourth Quarter is going to go is probably not so bad, given that the economy has not recovered yet and is weakening at the end of september. Social distancing restrictions remain. I am more worried about 2021. It it depends on how long takes to find other treatments and whether social distancing restrictions are expected. Its not about economics, its about confidence and health progress, medical progress. Matt agnes, we will keep you a little longer. Agnes belaisch, chief european strategist at bearing. She stays with us to talk about whats expected in the u. K. Britain is prepared to water down its lawbreaking brexit legislation. That could boost billing investor confidence, but the trade deal could happen. Maybe more important, Angela Merkel pointed out the eu is willing to bend on state aid. That could be the compromise on which we want to focus. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 40 minutes to go until the start of the equity trading day. Brexit could be the dividing line here. We might see u. K. Assets and stocks under persona underperform if we see pounds continuing. To wateris prepared down its lawbreaking brexit legislation. Sources say the bill to revise failing talks with the eu. Otherwise, Boris Johnson said his focuses on leaving without a trade deal. The chief european strategist at barings is still with us. What are you watching when it comes to how this develops and when it developed . What is the deadline for you, and what caught your attention . Is it the posturing from number 10, posturing from Angela Merkel or Emmanuel Macron . Agnes compromises the name of the game in politics. All parties are very good at playing this game. It went on for long months, a roller coaster ride. I think its around november 23 when the European Parliament meets last for this year and can ratify any new agreements that both parties will have done. Whats happening on three or maybe two and a half bones of contention that remain near the debate. When you mentioned before, which is how much the government tends to push the economy postbrexit and to enter competition for the eu. Wants toe hand, the eu be sure that the u. K. Sets its rule. And on the other side the eu wants to reassure that the u. K. Wont break the rules. These cannot be resolved by itself. Looking at the second issue, we had to resolve disputes about the issue. I think these two negotiating tactics have to be resolved together. It will have to be made on these two chapters, one after the other. If they can find a way to resolve this, then the eu will let go of its desire to have everything on how the state aid the u. K. Can give. There is this other bone of is the victorych tosence that could be given the u. K. , which is about fishing rights. I really hope the u. K. Does not lose their sense of humor for brexit. That its going to be the final tactical play where the eu understands very well that they will have the same access to the u. K. After brexit and it will give up some of its demands on the assets. All this is playing together. Go ahead. Channel isuch of a there between no deal and the deal that is possible here . Is it really a very small difference . Agnes its a very small difference. Its only going to be the starting line. The u. K. Will have to negotiate what happens with its service industry, which is in negotiations now. They will have to negotiate other trade agreements with other zones that they can trade with. The u. S. And china are doing a big one. I think what really matters is mr. Current u. K. Leader, johnson, comes out of this looking like a real leader and a choice were the leader. That is left up to brexit for the u. K. Its not a particular type of trade deal that they will have reached. , chiefgnes belaisch european strategist at barings. Really appreciate your time today. Nancy pelosi sets a tuesday deadline to agree on a stimulus plan before the election. President trump he wants a deal bigger than the 2. 2 trillion package. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Anna welcome back to the European Market open. 30 minutes to go to the start of equity trading. The brexit news having an impact on the ftse. Let us look ahead at some of the events we will be following this week. Later today, opec and its allies will gather to assess the state of the market. Theident Vladimir Putin and saudi crown prince, mohammad bin salman has spoken twice before the summit. Netflix will report earnings tomorrow. It could top its somewhat conservative guidance of two point 5 million extra subscribers. I cannot think of anyone that has had any time to watch netflix. Matt [l

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