Be risk on. The cash trade, less than an hour away. Here are your headlines. Big attack its even bigger. Alphabetacebook, and tune to techsumers to solve the problems of a global lockdown. The French Economy shrinks 13. 8 or after an increase in jobless claims shows the recovery is in shaky ground. Ibar, bnp arab are par beats all but one of the big wall street banks. Just an hour from cash trading. Lets look at futures. Futures futures, u. K. Are down but only slight moves. Nothing material. Nothing to show us what kind of direction we can expect. Futures right ww, if you take a look at the eif screen, also slightly mixed this morning. Of working slew earnings news. I will kick it off right now with natwest. Impairment charge of 3. 54. 5 billion pounds. Expecting less than one billion. In the Second Quarter, more than doubled the impairment charge for the full year. The company expecting at least possibly up to 4. 5 billion. The operating lost was 770 million pounds. Have iag asyou well. The first one we should go through is the red headline. A capital increase. It was mentioned last week. Going toif this is happen. One thing, the Second Quarter revenue came in at 703 million euros. Loss was less than the street was expecting. A little bit better for iag. Their business was at a near freeze due to the pandemic. They say it will take until 2023 for demand to recover. That is similar to what we heard from some of the airlines in the midst rates. It is going to take years, not months for the airlines to recover. That is bad news. We know there have been layoffs around the world at airlines. News frome to get bad the airlines. Out as well in the bloomberg terminal, cutting 4. 55000 positions. Seeing negative. It has been a horrible year for airline employees as they are fired in every company. Managed to retain employees. We do see some like ryanair that have managed it. I am sure even they are going to be allowing some out by attrition. European futures makes a little bit, pointing slightly down as we look ahead to the euro area economic data. The s p 500 and the u. S. Closed lower as data showed the economy had the sharpest contraction on record. Much worse than the european contractions we are seeing. More than 30 contractions for the u. S. Here in germany, we are looking at 10 . Still bad, but not nearly as bad. That is why maybe we see so much euro strength. Lets bring in mark. You had a great piece out on all , medium to longer term traders should be long in the euro. You think it is going to 130 . The big changing moment when was when we got the announcement they would have this Recovery Fund. They said it was a complete game changer. It was opening up the idea of burden sharing. The biggest change since the fall of the berlin wall. We have had the Recovery Fund in europe, we have this big divide in the west. It is going to emphasize the dollar thing. We have the whole pandemic where it is largely contained in europe. The uptick is nothing compared to what we are seeing in the u. S. , and ongoing deterioration. The the specs are long on dollar. The world is very long in dollars themselves. Up by thet backed share of the global economy. Come down is going to over time. The most important thing in the short term is the fact that the u. S. As an economy like so many others in the developed world. Deeply negative rates are an established part of the norm. That is a new paradigm. It has not been the case for many years. The fed has solved the liquidity problem. We are not going to see the funding squeeze. The picture is strong on a longerterm basis. On a shortterm basis, specialized traders will go but longterm, this is going much higher. Are policymakers going to be concerned about that . Are manufacturers going to see the benefit . Europe is a massive export zone. We are seeing that theme. European equities have really suffered. Even though supposedly the story theetter in europe rate Second Quarter was not as bad. We are seeing a better containment of the virus. European equities are laggards. One of the issues is we are where a complete change currency strength is. The ecb has fought to keep the euro week. They are going to lose that battle. The dollar is so negative. That is going to be a concern for european manufacturers, yes. The techo us about earnings. Is this the end of the good news . What do you say is in store for august . Great numbers overnight. Kindannot deny the recent of picture from the u. S. Has been positive from earnings. And from the bill whether names. We know the central bank has been supremely supportive. They are all in. They have rates, they are staying there for a long time. They have solved liquidity problems. They are pumping money into the system. What will they do during the drawdown . What did they have to look forward to . Nothing. That is what i want to ask you about. We see a resurgence of cases. The u. K. Is doing a partial lockdown of northern england. What if things start to get really bad . What is left for the fed or the u. S. Government to do . There is nothing the fed can do. The ny situation for where the u. S. Is stuck in a pandemic situation. The president ial election is on. Little bit of paralysis about how they act on the federal side. What can the fed do . Nothing, really. Next will be dramatic and will force some sort of reaction. The next weeks will be very bleak for u. S. Stocks. So much for joining us. Mark cudmore. Check out the blog. Coming up, the tech giants capitalizing on the pandemic. Earnings surge for apple, amazon, facebook, and alphabet. Is that it . Only place u. S. Consumers are spending money . Is bloomberg. Welcome back to bloomberg markets. 40 minutes away from the start of cash equity trading. We see futures turning a little bit higher. They had been down. Although ftse futures have been up, they are increasing as well read german virus numbers have past 24by 989 in the hours. Lets get the first word newss. Go to laura wright in london. The economic rebound in the u. S. Is looking even shakier. Shrunk the most on record. The labor market is showing signs of strains. The number of people continuing to claim Unemployment Benefits rose by almost 900,000. It is something he does not have the power to do alone and would need the backing of congress. Mitch mcconnell says the date is set in stone. Lockdownsas reimposed across the north of england. Some britons have been failing obey social distancing measures. They will no longer be able to meet indoors with people from other household read global news, 24 hours a day. Powered by more than 2700 journalists and analysts and 120 countries. This is bloomberg. Biggest tech company saw earnings surge during the pandemic. While the rest of the economy is being hammered. Quarter were Quarterly Results beat expectations as the county capitalized on the crisis. Net income of 29 billion, a three month ending late in june. Is this as good as it gets for u. S. Stocks . Lets ask our next guest. He joins us now. Good morning, thank you for joining us. One analyst put it yesterday, it is the tech world and everyone else is just paying rent. Is this as good as it is going to get . Phrase low use the out quarter. Apple, amazon, facebook, they are in a fitting from the shift to ecommerce trend. Seen that in the outperformance of the names this year. We think the trends will continue. We are seeing interesting opportunities elsewhere. Homeimprovement trends in the u. S. , etc. Well we agree the companies will benefit, we think investors need to be looking elsewhere. You expect a sharp rebound in Consumer Spending . Productsf the apple they were picking up on. Are they going to be buying the rest of the stuff in q3 and q4 . When you talk about Consumer Spending, we are taking a lot of take home things, diy. A lot more products being undertaken. That is benefiting retailers, the likes of home depot, etc. Sherwinwilliams come etc. There are other areas where you are seeing consumers spending money. Areas peoplee are need to be looking at. From a consumer perspective, we think there are other areas people could invest in. Wax diy. I saw that a lot in america. In. Le putting pools we see americans taking advantage of the low mortgage rates. One part of the data in the u. S. Has been right is the housing market. Should people be putting more money into real estate . Housing,ms of u. S. Activity has been stronger than we have expected. We have seen a rebound in home sales. There is a lot of pent up demand and supply remains limited. Low mortgage rates, almost as low as 3 . That is certainly helping. You are also seeing structural shifts as people look to suburban areas, larger houses. We think arrange of people can benefit from this. Home depot, some of the u. S. House builders have been doing well. There is a wide range of companies that can benefit from this housing activity you are seeing right now. I was thinking last night about the european equivalent to the companies that killed it. There really are not any. There is no european facebook. A netflix, european amazon, google. Giant google one worldwide. What about these other companies . Are you finding european equivalents to invest in . To home depot . To lows . That you think are going to do well . Find europeanto equivalents to some of those things. Certainly within the european area, we think there are opportunities in areas such as electric vehicles. We had numbers out of volkswagen which were interesting from our perspective. Electric vehicles is going to be an interesting area. A lot of new model launches. There are a lot of folks in tesla. You see that in the share price. Launches with volkswagen, etc. You are seeing stimulus patches. It directed to ev incentives. We think that is a good example, tesla versus volkswagen. A clear example of a u. S. Stock doing well on the backs of evs. There are companies in europe that can benefit. Hold that thought. Richard loves autos. We are going to talk more next. Now coming up, an alternative to tesla. Surgedtric car maker has 120 in the last two days. But is it too risky . We will discuss that next. This is bloomberg. Bloombergback to european open. We are looking at stronger and stronger gains in terms of european futures. We did see drops. Now we are seeing futures turn much higher. Ftse futures gaining 0. 5 . We were talking about tesla and electric cars. The yield incredible rise we have seen in tesla stock has made it a Retail Investor darling. In some places in twitter, absolutely hated. It has many looking for similar opportunities. Chinese rival condi has surged 120 . The same type of investors might be behind the move. Havethan 34,000 added the stock to their portfolios. Do you like tesla . Do you still like tesla . Are you looking for other stocks that might be similar . Tesla share price has been remarkable in many ways. They are very much at the forefront when it comes to electronic vehicle innovation. We think there are other companies that have scale, dedicated platforms, that we think investors should look at. We talked about what government has been doing. We are really seeing that now, particularly out of european countries. This is about trying to bridge the affordability gap for consumers in terms of buying evs. It is critical in terms of Companies Meeting co2 targets. Yes, they are going to do well with the model three sales. It is going to be a big year in many ways in terms of new model launches. There is a big supply chain, not just auto manufacturers. There are Semi Conductor manufacturers, battery makers as well. Thes not just about carmakers. There is a big supply chain at play. Speaking of the supply chain and what we are seeing in the electric car market, do you think the pandemic has moved aong the Energy Transition at rapid rate . Do you see investors interested in getting their hands on anything with esg exposure . Investors are getting more interested. You are seeing governments directing funds toward this. Whether it is the european Recovery Fund, which is earmarked in terms of building efficiency investment, joe biden, he came out with a climate plan which targeted funds toward energy efficiency. It is not just hype. You are seeing governments start to direct stimulus toward this. We think that is why this tailwind we are seeing could continue. For us, it is about being selective. The hvacn some of companies, that is another area where you could see some investments tailwinds. If you pull up on the bloomberg, you can use a command on any equity. It shows you the supply chain. Enough, not only names like panasonic, continental, like you would. Xpect also glencore rio tinto. He is a fund manager for Global Equity income. Eally appreciate your insight fascinating points in the electric carmaker supply chain and joe biden. Taking off. Ot quarterlying a record loss. Meanwhile, the iag parent saying it needs to raise more capital. This is bloomberg. Good morning. We are 30 minutes into the start of cash equity trading. A look at some of todays key events. We will get data from the euro area. Analysts expecting the economy to contract by 12 in the Second Quarter. We will also get inflation for italy. Headlines expected to increase a touch as downward pressure from Energy Prices alleviates. Theybil reports announced they are maintaining cash dividend. Fiat chrysler expected to post a tough quarterly result. North america may have been more resilient than expected. A lot of autos to look out for. I will look to see what exxon mobil posts. A lot to look forward. Fiat chrysler teased a jeep wrangler. Have written the company to ask them to please do it. Lets get an update on those sectors that have been hit by the coronavirus lockdown measures. Air france, klm, posting a record loss. Beforey it will be 2024 capacity returns to normal. 2023. H airways said for klm, maybe another year longer. Raise 2. 7hey need to 5 in euros. Lets talk first about the recovery forecast here. It isy airlines have said not going to be a secondhalf recovery but it will take years. Theme we have seen emerge. There was a raised maybe a month ago where there was some optimism demand would return, particularly in the short ro utes. That has evaporated in the last couple of weeks. We have seen people cancel. Feed back the industry. We have heard from airbus. Saying then body, recovery will take years. We are hearing from air france 2024 is an optimistic target for recovery. A lot of people have really changed booking behavior. Late of people are booking and canceling. Being able to plan is very difficult. Iag, slightly more optimistic. About whether they have a target they can maintain or whether they have to revise them. To the industry, klm cutting up to 5000 positions. This comes on top of the industry cutting 400,000 jobs. Either they were fired or furloughed. What at the end of this pandemic you see as the loss of an limit to the industry . There will be fewer people in this industry. From airbus. They said they would cut thousands of jobs. Lufthansa, which like air france and klm, received bailouts. There is only one way to get through this. That is to cut costs. Ground your aircraft or get rid of employees or both. Raise fresh funds as we heard from iag. They are increasing money. Arer airways, they achieving they announced they in spain. An airline they want to renegotiate the price tag. They only want to pay about half of that. Ways,e seeing creative less creative in terms of job cuts, airlines trying to cut costs. When i flyy, vacation,for work or im going to look for a hotel to stay in. Restaurants to check out. Beenss that industry has pummeled at the same level as the airlines. Absolutely. Restaurants are really struggling in the u. S. Thanbly even more dramatic over here. At least where we live in berlin, we returned to some degree of normalcy. We can go out, we can dying. Indoor dining in many places. That has not returned to that degree in the u. S. Or places like austria. We are going back to a second phase of lockdowns. That is keeping people at home, private and them of their normal lives. They are not going out, they are not booking travel. We have seen an increase in local vacations for people who say i am going to rent out a camper van. Or go somewhere local. You are not seeing these typical longdistance or even mediterranean holidays that typically would form the background backbone of this industry. This is the time of year where these Companies Make money. They make money so they can make it through a cold winter. Youre probably going to see a bigger shakeout in the months ahead we do not even know about. Thank you so much. It is a good point. Google, their ad spending was down because they are so heavily exposed and relying on the advertising you get from the hospitality and airline industry. Thank you so much. Bnp paribas has reported a blowout performance. All but one of the this will allow the french lender to move past embarrassing losses. The ceo was asked if they would maintain guidance in the event of a surge of coronavirus cases. We anticipate there will not be a second nationwide rollback. We should look at the results of this quarter and the first six months. It is in line for us to confirm. Was d income activity it is up 100 54 . This exceptional market volatility will be less in the coming months . It is an issue, institutional but also sovereigns. It is probably above normal. To serveas we are able customers, because of our strong financials, of all the financials we have, we have oath the market share. Being there for clients. Weis something we anticipate will keep on having in the second half. French Retail Revenues are down 11. 8 . It is worse than our estimates. Anticipate a recovery there . Impact had an impact, particularly in april. If you look at the activity, the number of activities, credit card transactions, demands for loans, in june, it basically tapered off to levels precoronavirus. The runway would be tapering up to the normal amount. To the precrisis levels. Have seen a pickup in activity. Yes. When you anticipate the full recovery . Can you give us more on this . There is a pickup in activities. It is faster and some, slower than others. As we said, if you look at the overall pickup, before it is back to the level, we dont think that will happen before 2022. Holde ecb recommended to off payments until the end of the year. To followibas willing the recommendations . Supervisory authorities extended their recommendation not to pay dividends until the end of the year and we will comply. This recommendation will not be accepted. There is a return to normal. Regulatory rules are applicable precovid. Return tod be able to their planned policies. In this case, bnp paribas participates, anticipates returning to 50 payoff ratio. Bnp paribas cfo speaking to caroline connan. Bigger. Gets apple, facebook, and google see 200 billion in sales. It puts the sector in the spotlight as the pandemic hammers the rest of the economy. This is bloomberg. Back. Come this is the european open. We are 17 minutes away from cash equity trading in europe. Futures are firmly gaining. 66 . Futures up zero wind lets get the first word newss. We go to laura wright in london. Tocsin washington over a new relief package are making little progress. Senate republicans extending debate on stopgap insurance. They say job protections must be part of a comprehensive plan. Even if it fails, it gives them a chance to say they tried. The u. K. Has imposed lockdown restrictions across the north of england. The announcement comes as the government says some britons have been failing to adhere to distancing measures. They impact Greater Manchester and parts of lancashire. They will no longer be able to meet indoors from with people from other households. Jie zheng hang the chinese president calling for reforms to stimulate domestic demand. Ony said china should focus local input. Global news, 24 hours a day. 2700ed by more than journalists and analysts. This is bloomberg. Matt and marie. Think you so much. Biggest Tech Companies saw their earnings surge. Alphabet showok, the companies are capitalizing on the crisis. They reported revenue of 206 billion. A net income of 29 billion in three months ending in late june. Joining us is our media and tech analyst read thank you for joining us. The quote i loved came from one analyst who said it is techs world and everyone else is paying rent. Out of all of these massive beats, who do you think stood out the most . Standoutk the single adld be facebooks digital group. It was about 11 up year on year. In the context of overall budgets being down 30 40 in q2, that was pretty spectacular. It talks to the power of instagram in particular. Platformit is a great to encourage people to buy products. Facebook called out the fact it is a great platform for small to medium businesses. Year body of iphone sales. When he 6 billion in the quarter. They were expecting 21 billion in sales. Are there any european equivalents . I dont mean are there any companies of the same size. Companies that are big, huge tech got bullies. Can really grow even during lockdowns . Just isnt anything at all comparable really. Telecoms, deutsche telekom, they are pretty substantial. They are in the shade, really. The interesting thing is the window of opportunity for nokia. Given what is happening with huawei. Can step in. Overnight, tech got 250 billion pounds bigger. Case theirdd to the power and influence is out of does. L . I think it maybe it is good timing. They have that hearing on wednesday. Then they report blowout results. Perhaps if these numbers had come a day earlier, they might have faced some tougher questioning. Are such dominant companies locally. It is difficult to see without some kind of Government Intervention what is going to stop this machine from continuing to grow and grow. I hadnt really thought about it until annemarie got it up. Money handare making over fist at a time one 150,000 people in the u. S. Are dying from the coronavirus. Are they this recessions banks . It looks like they are. Amazon, they are becoming almost the default kind of platform for everybody. Isnt anybody to challenge that. Ago, googledays saying you cant look at the ecommerce market in isolation. You have to look at it with the. Rick and mortar it does highlight the dominance of them as a platform. More people are shopping online. Is that really going to change once the pandemic is behind . Amazon forecasted the momentum will continue. What are the risks to holding these Tech Companies . Risk is simply washington with unexpected regulation or a move to kind of break these things up. Nothingt feels there is the can really challenge position these businesses have created for themselves. It is this Government Intervention. Washington and europe looking at some of these big players, too. Matthew blackstone, thank you for joining us. Armenia and check analyst our media and tech analyst. It will get the stocks to watch including b. N. P. Paribas. Performance. Ding this is bloomberg. The year. This time, they were able to cut costs. They played catch up a bit. They say sales as delayed to the second half. We heard from lars, bnp did pretty good when it comes to debt trading. Better than pretty much every other bank in the world. I would say pretty good the didnt pretty good doesnt even capture it. They did better than every wall street bank which is a tough thing. The only thing they did not beat was morgan stanley. Equity trading how 53 . Byy were benefited governments taking out more debt to deal with the coronavirus pandemic. We saw a lot of hedging in there commodities. That helped the trading surge. Air france this morning adding more job cuts. Already we have over 400,000 people being fired or furloughed during to the due to the pandemic. Klm cutting 5000 jobs. They are higher this morning. Thats likely because they are doing these cuts to secure the 3. 4 billion euros in aid they need from the government. They had to do restructuring to access aid from the dutch government. It shows how dire things are after the record 3. 1 billion dollar loss. By doing this, by this announcement, it is more likely they can secure the age they need aid they need. Dani burger talking about some of the stocks you want to watch in todays market. It could be a fastmoving market. We did see futures trading down 54 minutes ago. And now have moved firmly higher. But you seeinst ftse futures up in london. Up about a quarter of 1 . Coming up next, it is the market open. It looks like we could see a risk on friday, the last trading day of the month. The open is next. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Simon pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Annmarie good morning. About a minute from the open of trading in the city of london. Here are todays top stories. Big tech gets bigger. They all beat the street as consumers turn to tech to solve the problems of the global lockdown. Unstable rebound. The French Economy shrinks in the Second Quarter after an increase in u. S. Jobless claims shows the recovery is shaky. Reports a blowout performance in fixed income trading, beating all but one of the large wall street banks. Matt, good morning. Last trading day of the month. Last day of the month. Bnp the start of the earnings this morning. We will see how they react when markets open. Got some amazing earnings overnight in the u. S. And then some interesting, a mixed picture in europe, future still pointing solidly higher after a mixed picture earlier. We will see how the live cash trade opens up, this is our global macro movers. You can see a number of risk assets across the column. Live, wetart trading will pop them up there. The ftse almost always kicks it off. Then the euro stoxx 50 is a benchmark that still has yet to see all of the stocks open up. But it is higher by 0. 1 . The cac in paris opening up about 0. 3 . The dax opened early for a friday, gaining 0. 25 . European markets are opening higher across the board after a big boost from tech earnings than the u. S. Overnight. Following a 900,000 person increase in jobless claims in america, as well. Some companies are doing great. The economy may be not so much. Here in europe, we have had spanish gdp numbers. If you take a look at the Second Quarter gdp, it contracted 18. 5 . Me,y good friend reminds this is a quarter over quarter number, it is not the yearoveryear number you see in the u. S. Very bad. Worse than the estimate. A 10. 1 germany, we had percent contraction quarter over quarter. , we have in the u. S. Seen a drop yearoveryear. Joining us to talk about this is jp and profittaking morgans Asset Management global multiasset strategist. See thescinating to biggest drop since records began in the 1940s. At the same time, apple and amazon are making money hand over fist. How do you square that circle . Thanks for having me. Inhink that you are right pointing to the divergence we see in the underlying fundamental economy and what we are seeing in these markets. I would say that tech has been the main ballast for us and why we like u. S. Largecap equities. The quality, the defensive nature. At the same time, we are very conscious of the near term that there are some cyclical risks developing. Conviction levels in u. S. Largecap are the lowest we have had in quite a few years. I would say the final point is that the secular trend and these by theen underscored performance we have had, we are just seeing that circular support accelerating. How thisay in terms of translates into economic data, gdphighlighted the historic and the same in the euro area today. That althoughght spending is very weak, os income, so income has actually risen in those two. It is a policy response. Crucial, that is the main crucial underpinning for these reasons of being positive on risk assets at the moment. Tech is performing extremely well. Annmarie i want to bring you back to the gdp numbers. Looking, is backward but there is a lot of talk in the market about europe recovering faster than the united states. Do you agree with that assessment . What could make it more shaky for europe . Yes, thanks. Europe,say in terms of toward the end of the quarter, we are starting to see the monthly sequential data in europe improving. We are seeing some of the double digit types of rebounds. Thesis agree with the that we are likely to see a rebound. We see the data pointing to a pickup in growth in q3, as the end of q2 things were already improving in the euro area in secondary derivative terms. , we dontf the u. S. Like thinking about it is europe versus the u. S. This is a european story. A key tailwind for the recovery. S you say, we have risks how are we thinking about it within multiasset solutions . We are thinking about it as we want to own some cyclical markets. We want to own cyclical markets where we think the policy support is strong and consistent. Fund the european recovery satisfies those requirements. Europe is a key area we like within the cyclical markets. We are conscious that it is starting to become slightly contentious at the moment, but we dont think that is a big hurdle to keeping that overweight european equities. We have a stock today up more than 12 . Nokia jumping more than 12 right now. It beat estimates, guidance was raised. Was on tech expert talking about nokia and ericsson may be taking advantage of this antiwhile way opportunity, 5g opportunity right now to really blow up. Do you expect this to be an opportunity, Telecom Network equipment makers . Yes, possibly. I think we will see Technological Companies profiting or using this theirunity to reorient profits. We have seen that already with the net effects overnight. ,acebook adding more revenue that is pretty positive. Otherct the same from telecommunications industries. Questioning the thesis globalizationhave to the extent that uses certain tightenings and asia. You have big Tech Companies in asia performing extremely well in q2. Weightdnt put too much on this decoupling theme at the moment. Ands very hard for markets companies to ignore the competitive advantages that they have in the production of composing. Supply chains remaining global phenomenon. We do see some chances that you will have a localized certification. Matt i want to point out the amazing differences we are seeing every it nokia has done so well today and we are seeing it as a possible candidate for success, but if you look at the 20your chart we had up earlier, especially compared to the chart of the other big Tech Companies we saw yesterday, it has not gotten a break. Everything else that burst in the bubble that is still trading has recovered to some extent. Telekom havetsche not come back from that. It is interesting to get that 20year view and see how far it has come down. Annmarie we are going to be ceo about allia of this. Our guest stays with us. We continue our conversation and discuss the strategy. The euro crossing above 1. 19 to the dollar. We just broke out the 1. 17 handle overnight. 1. 19. Cross the euro strength. At what point does it start to worry policy makers in europe . This is bloomberg. Clearly, there has been an extraordinary economic contraction. To call the end to the most difficult period would be premature. Strong given the macroeconomic impact. Underscores our business model. The volatility in the first two quarters were quite exceptional this year. Expecting ale are degree of normalization. Of course part of it is participating in the better Market Opportunities that have existed in the Second Quarter and we do expect a normalization of that. There are a few ingredients in the second half of the year that can truly drive. The biggest concern is a second wave of infections. We see economic stresses continuing to be present. The situation is still challenging and difficult to predict, so we should never be complacent. We had a strong first half, but we are focused on managing the second half of the year. We are in a period of real uncertainty. While that has led to revenue opportunities, it can also lead to other markets. Was european banking executive speaking about the challenges facing companies in the month ahead. After a mixed set of earnings from the banks were trading revenue was often undermined by huge loan loss provisions. Lets get back to our guest from j. P. Morgan Asset Management to get her take on the earnings season so far. A lot of volatility, now moving into normalization. What is your take and what do you see for the second half of the year . Hi there. In terms of earnings season, i would say it is quite bifurcated. As you pointed out, we are seeing some mixed results and disappointing results in parts of the financial sector. Equally, we have seen Strong Performance from the consensus secular trendy sectors like tech. In terms of how the markets react around that, we have been positively surprised. The price action has been positive. We are not seeing the markets really punishing things that are underperforming those expectations going into earnings. What i would say specifically on financials, it has been hard for us to have a very strong or High Conviction view at the market on financials or in general the value sector because we are not seeing any major change in bond yields and secondly the regulatory headwinds have been cut. Dividends being a headwind. We are in the early stage of the cycle. To see valueect doing well and seeing that rotation toward value. Multiasset solutions, we are steering clear from timing. We prefer to take more cyclical exposure rather than value oriented at this stage. From a high level perspective, earnings up to now has been supportive of a positive risk view. The outlook mains very uncertain but for the second half of the year, we are expecting those to be recovering. We are in the recovery phase of growth. What has been interesting is the divergence we are seeing in terms of pmi data. No one recovering as far as the activity data. For now, that does not change our stance for the Global Equity. Appreciate your time. Thank you for joining us. Morgan global multiasset strategist. We will be continuing the conversation on Bloomberg Radio at 9 00 a. M. Switch over if you are in london to Bloomberg Radio. Coming up, big tech gets bigger. We will continue talking about the Massive Gains in amazon, apple, facebook, and alphabet. Billionssed the 250 bumper day in trading. This is bloomberg. Annmarie welcome back to the european open. 20 minutes into the trading session. That a mixed picture picture. Overnight, americas biggest Tech Companies saw their earnings surge during the pandemic. While the rest of the economy was being hammered. Quarterly results showed the industry is capitalizing on crisis as consumers turn to tech for entertainment, shopping, groceries, work, etc. The companys reported revenue billion. Joining us now is the asset manager technology. Very interested intact. Good morning. On mega techkeen blockbusters. We have 200 billion in revenue overnight. Why are you interested if getting in on this . Just because you dont own the Biggest Companies doesnt exposed toe not their upside. I dont particularly like it undere if you are buying mega caps, you are buying a bundle. They are all looking vulnerable. Matt isnt there a power in the scale of an almost monopoly business . The rez, but there are disadvantages, as well. It attracts regulatory attention. Whether the regulators can move past and do anything about it is debatable. What they can do is produce a lot of negative news flow. Annmarie you are interested in supply chain, what offers supply chain . Im not interested in the Disruptive Companies. Those Disruptive Companies are not the Companies Making money. I am much more interested in the companies that make what they do, those disruptions possible. The disruptions come and go. [indiscernible] possible, disruptions they tend to be the same once again and again and again. Tend to own up about the slightly boring stocks because what they have been doing is incredibly important and difficult and profitable. We are having a little bit of technical difficulty with the Disruptive Technology right now. We continue to have a clear line. One company i dont think people would be calling disruptive is microsoft. I dont think bill gates was called in front of congress with his other 1 trillion brothers. Why is microsoft able to fly under the radar . Most of the world is not rocking around with the iphone 11 right now. Most of the world is using probably a previous version of windows. Microsoft soto got the antitrust stuff out of the way 20 years ago. It is definitely not in the crosshairs at the moment. Bit is theteresting public cloud. Is number two position currently extremely attractive because the companies that are moving their businesses to the cloud currently are not the leaders, they are not the most tech savvy, the most sophisticated companies. They are not comfortable dealing with amazon. Mores these slightly staid businesses are more familiar with microsoft. Microsoft is really the best positioned player for the current suite where the bulk of industry moves hedge fund computing. [indiscernible] annmarie sorry, your line broke up. I just want to quickly ask you before we let you go, you are interested in this company. It is like the amazon of argentina. Why are you so excited about it . Is the amazon and ebay of latin america without the other company. It is basically existing in a market without strong competition. The competition in most of latin america is the online side of traditional retail. The mexicanntered market because it can do that across the border in the u. S. , but that led to an acceleration. For the rest of that, it is not really an amazon site at all. It is a business that has but very low penetration in ecommerce compared to lets say 25 in china. There is a huge scale for growth in the market. It is an extremely wellrun business. It has developed an equivalent to paypal as well. Really great to get your insights. Viewers, you our spent 20 years at blackrock investing in technology companies. He also wrote a book, the Successful Technology investor. Check that out if you want more on his strategy. This is bloomberg. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Annmarie welcome back to the european open. 29 minutes into the trading session. We are green across the board. Cac, up nearly 0. 4 percent. We are green as well on the stoxx 600. The biggest sector is technology. That sector of more than 2 . , theys biggest gain or raised their profit guidance. We had the blockbuster from the big tech in america. We booked a 2. 1 billion pound charge to cover bad loans. On top of that, this sends the lender to a loss in the first half. A loss. Preparing for they joined their rivals in a very grim picture. , lets takethe ceo a listen. Think what we saw in the Second Quarter was a real skewing in the economic outlook. The numberable with for the half. We are giving guidance to the market today. Significant increases to come through. What we will see is that when you look at that impairment number, people still servicing your loan. I think what you will see happening in the second half of the year is the servicing will become more difficult. Tot will be related in part early november. It will be interesting in the timing coming through. Quarter, weper thought we would not see another one of this size this year. Ok, now those impairments youve reported have also taken you into a bigger loss than expected in terms of the Second Quarter pretax. Comes toen it earnings, do you expect to this coder to be the worst . It is always really to report a loss. With the level of the impairment charge, you would expected to be the worst in this year certainly. What does that mean for cost cuts . You said you remain committed to the Cost Reduction in 2020. There were some reports recently in terms of Cost Reductions over the next five years to the tune of 3 billion pounds. Will you be accelerating cost cuts as a result of the numbers you have reported today . Committed to the cost cuts. We have always said the market should expect us to take 3 or 4 of our cost base each year. We dont change our guidance on that. We have moved well forward. Fromde some decisions property issues were corporate has highlighted property issues. Comfortable moving through. You are very exposed to the consumer. In terms of your corporate loan book, you have exposure to the leisure sector, retail, the sectors that have struggled specifically during covid. If the economy does take a turn for the worse and you have had your ceo talking about the economy continue to pose challenges, what steps do you take if you dont accelerate the cost cutting . I think it is continuing to work with the customer base. We have a very good, well diversified shape. We have incredibly strong capital. 17. 2 . It is one of the highest capital levels you will see within any bank in europe. We need to make sure we are and work ourring way through what is happening. When do you expect a return to profitability . This year has been a very hard year. Told 2020 would then be behind us and move on. What is your outlook for the economy . What is your base case . The base case when we did our modeling, we did four cases. We had the gdp ranging from 7 to 17 . Was good recovery starting in 2021. It depends how long your view is of the recovery. As you move into 2021, you will see the recovery starting to come. Chief finance the officer of Natwest Group speaking with nejra cehic earlier this morning. Lets get the bloomberg first word news. We go to london. Thanks. HasFrench Economy experienced its sharpest contraction on record. Minister isinance painting a pessimistic picture for the road ahead. He said the worst is still ahead. The data for the whole of the euro area comes out and is expected to show a 12 slump. Ae u. K. Has reimposed lockdown restriction across the north of england. Somemes as they say britons have failed to appear do social distancing. They will no longer be able to meet indoors with people from other households. The economic rebound in the u. S. Is looking even shakier. Gdp for the Second Quarter shrink the most on record, a massive 2. 9 when annualized. The labor market is showing strengths. Withumber of people Unemployment Benefits rose. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Annmarie thanks so much. Now, the Hong Kong Government has denied attacking free speech after banding a dozen candidates from elections on the Legislative Council. It came in day after Police Arrested four youths over social media posts. Our north asia correspondent has investigated the ramifications in a new hourlong documentary hong kong on edge. Congratulations on this show. What is in store for the opposition after these latest moves . It is going to be pretty tough. Four years ago, there were candidates disqualified for their platforms. This time, upwards of 12 candidates yesterday were disqualified, saying even more could be disqualified. The democrats were hopeful they could win many more seats. The Legislative Council has 70 seats, 30 directly elected. For september 6. This takes a lot of wind out of their sales after last year, they had District Council elections where they won more than 80 of the seats and a rebuke of beijing. Deadline for candidates to submit their nominations. The government came in. The Election Officials came in and disqualified 12 main candidates, including joshua wong, really the face of many of the antigovernment protest over the last year. Is featured in hong kong on edge. Lets hear a sliver of that. At the end of the day at the moment, we are on an airplane with lots of turbulence. Everyone is holding on waiting for the plane to land. Or waiting for it to crash. Or waiting for it to crash. I honestly feel this airplane is not going to crash because china needs hong kong. They are not going to change the mode here. They want to make it stronger. Beijing certainly doesnt want a stronger prodemocracy camp. Before the passage of the National Security law, lawmakers have been accused of using disruptive and filibustering while fostering antichina sentiment. To thoseard similar the u. S. Put out in iraq during the second goal for has circulated here singling out the of prodemocracy advocates, including a prodemocracy lawyer, the ace of hearts. There will be a lot of scare tactics in scaring away. They want to defeat you without using any force or even without waging a war. It is the way the chinese play the game. If i sit here and say, no, i were your be arrested, born yesterday . You live under communist rule. Ive never said that. Even in 1997. Neither did i predict i would be arrested tomorrow. We live under chinese rule. Everything can happen. It would not surprise us. That is the way they behave to their own people. But we will stay and fight. I dont think im going to leave. Even though i risk being put into jail. Scared, all the other people will become very scared. We need to fight until the last minute. Before the National Security law was implemented in hong kong, this is legal, but after the National Security law was illegal. Freedom of speech is limited by this new law, but it is mainly the freedom to advocate hong kong independence or the freedom to advocate overthrowing the Chinese Communist party. Is somedmit that there limitation of freedom of speech. s freedom of the press under threat . No. Unless they work in secession or subversion or terrorist activities. Do people have to be worried about what they post on facebook or social media . And what their employees post . It is ant think official obligation for what criminal offense your staff commits. If you are not involved and you have no intention to carry out secession, subversion, and terrorist acts, what have you to fear about . Right, that was excellent stuff. Looking forward to seeing the whole program. Stephen engle on hong kong. Up next, 5g come back. Nokia bumps its fullyear Earnings Guidance with a 5g plan on track. We will hear more from the nokia ceo. Dont miss that interview next. This is bloomberg. Welcome back to the european open. Right now, 44 minutes into the trading day. We are looking at some slight gains across European Equity indexes. In nokia. For shares that after the Telecom Equipment maker bumped its fullyear Earnings Guidance higher. The company cut costs. In theh up with rivals markets for fifthgeneration generation wireless network. Joining us to talk more about behind the ceo transformation of nokia. Our Bloomberg IntelligenceTechnology Expert was telling us that this could be one of the company is that is really leading the Technology Resurgence in europe, taking advantage of the 5g revolution. How much of an improvement do you see as a possibility for the aares . Clearly, nokia is sliver of what it once was 20 years ago. Rajeev yes, thank you, matt. Of course, that was a different business. I think we are winning more and more 5g deals. Servicemore in the provider space, we have launched 32 networks. We have seen better than expected profitability. Indications of a strengthened mobile radio. Of course, continued strong growth and robust margins. This gave us confidence to improve our guidance for the full year, as well as offering margin and upgrading our free cash flow. Good morning. On the 5g market, you have been 4g, 5gfor about 25 share. Will you make up for that . Because of thet pushback in the way that the west is basically blocking out while way . Rajeev thanks. Weve set about 27 . We canthat this year, and 4g and 5g market shares to be 27 . 5g when rate, moving from 4g over 100 that remains including china. We have been watching geopolitical trends. I like what we have seen before. We have seen concrete midterm opportunities emerging. Space. Some deals in that we are wellpositioned in terms of capability and capacity. Sales, then your nordic rival erickson in china could that be an advantage if china fights back on the walkway bands with its own bands on western suppliers . Rajeev yes, we have business in china. We are adjusting our mix in china. That we willlear , asmize for profitability opposed to markets in need customization. Seen a 40 return. , this focus is allowing us to lead nextgeneration solutions. So, i think focus on where you tot to win allows you benefit in nextgeneration technologies, as well. China,e picking up on this year has really showed us about the geopolitical tensions playing out in the world between beijing and washington, as well as westminster and beijing. Is the world headed for this bifurcated tech system, east versus west . What does that mean for Tech Companies . Rajeev of course, there is the risk of that. Watch geopolitical trends very carefully. You also want to make sure that the Global Company operating in both the risks and opportunities it creates for us. Seeing concrete midterm opportunities. At the same time, we have to be watching our Global Supply chain footprint and luckily that is designed for optimized Global Design so we can mitigate the study risk. To be honest, over the last couple years with the trade wars and with the pandemic, our supply chain has done well so far. Matt today is your last day on the job. I wonder what advice you have for your successor. What do you want to pass on that you have learned over your long career . Rajeev i would say a few things. Operational discipline is a must at all times. The importance of that growth, they are linked. During that time, we have diversified into enterprise very successfully, as well as standalone software. We believe in equality, fairness, we want to lead with Ethical Leadership challenging industry. Oft is the importance people. Done with colleagues and people, both past and present. Have invented the breathtaking products and services, always done by acting in an honorable, ethical way. You know what . We have had a very long transition here. Five months since we announced. Im still around. I stepped on later tonight, but then i will be there to help the transition. Annmarie thank you so much for your time on your last day. The stock is surging or than 13 percent on those results. The ceo of nokia, rajeev suri, in for joining us. There is a new bill in town. The gop and more democrats the gop and democrats agree that more stimulus is needed, but how much . What needs to change . A very important story coming up next from the united states. This is bloomberg. Annmarie welcome back to the european open. Equities to the upside this morning. Matt, it has been a pretty blockbuster week in terms of how much earnings there was to digest. Today, really nokia is the standout for the european market. I think it helped that it is the other tech sector that is doing well which is the other thing overnight. Americas biggest Tech Companies. , does ithe question show how much power and influence they have and will they get in more trouble with the ds the . Matt i thought it was also fascinating to see that at the same time u. S. Consumer spending falls the most since recordkeeping began in the 1940s, apple has a record high quarter in sales. As if people arent spending any money, but ultimately they do have is going to buy a new iphone. Lets turn to the economic inequalities in the u. S. The gop and the democrats have a new stimulus bill, but there is a massive gap between the two parties. Packagerillion relief that Congress Passed in mars drank some must the most aggressive. , what was theis problem with the last bill . How can that be rectified in the next one . That last relief bill was still unprecedented, but a lot of people are still waiting on benefit they should have gotten weeks ago. Many of those missing out are black people and particularly blackowned small businesses. There was a number of issues with the payment protection program, but some of the reported issues with the fact that black Business Owners have problems applying for the ppp loans, some formerly incarcerated Business Owners works looted from the benefits. While white Business Owners had a hard time getting the loans. Black people started out already behind and the disproportionate covid19, so some of the structural issues already in reigned in America Today made a bad situation even worse. Annmarie thank you so much for joining us from los angeles. She is fronting the show that i suggest everyone take a look at. 6 00 p. M. U. K. Time and on facebook. This is bloomberg. High tech. Amazon, apple, facebook, and alphabet beat expectations. The sharpest gdp contractions on record. More data later this morning. Bnp paribas reports blowout performance and fixed income trading, leading all but one of the large wall street banks