And the markets say by gold. Global google searches for the phrase hit levels not seen in nine years as the yellow metal barrels passed 2000 an ounce. The cash trade is less than an hour away. Here are your headlines. The white house and democrats aim for a virus relief deal by the end of the week and bill gates tells bloomberg exclusively the u. S. Should help poorer nations get vaccines. Rocked by a massive explosion at its main port, killing dozens and injuring thousands. Authorities are yet to confirm what caused the blast. In fromcontinue to roll europes largest countries. Commerzbank anticipates a loss for the year. We will speak with a host of top executives in the coming hours, including from the frankfurtbased bank. We are just under an hour away from the start of cash equity trading in europe and out in the u. K. Lets take a look at what futures are indicating. Green arrows across the board. For ures up the most, 0. 4 . We get a slew of earnings out of German Companies this morning. Take a look at u. S. Futures. Showingu. S. Futures gains not quite as strong, but dow joneshere with futures gaining the most. Almost 0. 25 . Annmarie cross assets, we have to look at the dollar figure again today. Eurodollar against a weaker u. S. Dollar. Real yields again hitting another record low. All the action is in gold. We are above 2000 an ounce. This is another milestone. Analyst even see more upside. One from aviva investors describes gold as a disneyland that only the fed could stop. Oil a little bit softer. This comes after the massive explosion, harrowing scenes out of beirut. Possibility of instability across the region. Matt lets talk about that right now. We are joined by nigel wilson, the ceo of legal and general. We just have been getting lines across from the company. Nigel, we are looking at first of all a first half profit after tax of 290 billion pounds. We are also looking at operating profit that beat the street estimate at 946 million with the dividend per share, how have you ofn able to take advantage maybe the volatility of investors may be wanting to rebalance during this past quarter . Nigel i think we have seen lots of different investment and your introduction was a great example of that. To the massivein shortage of investment here in better. To build back and leveling up in britain. We are very much doing that. As you pointed out, our operating profits are flat yearoveryear. We had some negative covid effects in the other two divisions. Optimisticpretty that the government is trying to create an Economic Framework which will allow investment drive growth here in the u. K. Because we have been desperately short of this type of investment for a long period of time. As you pointed out, we kept the dividend flat yearoveryear, which is a good outcome for shareholders and we think the right and appropriate thing to do, given all of the market backdrop. Good morning. What are your latest forecasts for how covid will evolve and its impact on u. K. And European Growth . Most oft is great that the European Countries have got it really under control and we have done a good job here in getting it under control. Has tocking test system butove as we go forward, america is a somewhat different story. Therefore, we are a bit more nervous about the outcome in america, particularly for our Life Insurance business where we have claims from the usa. What are your expectations right now . You are following this probably more closely than other people for how covid is going to evolve , for how the pandemic is looking, especially its impact on European Growth. Im a little bit perhaps more optimistic about the potential for growth, particularly if we can get the investment side right. Pretty much all economies have been underinvesting, but there are a huge amount of projects. We have over 100 projects in the u. K. With over 6 billion pounds of investment attached to those. Like more companies to do that. At a scientific of the level and a societal level, there was a huge amount of investment required. Interest rates have never been so low and we should be making all of those things happening. I dont think covid is a barrier to that personally. I think it has been a tragedy what has happened so far, but it is not a barrier to longterm investment and growth. They have been hugely rewarded as a consequence of that. Annmarie given the favorable debt market, are you worried about some of these companies you invest in gorging on ready supply of credit . [laughter] good and is a very relative point. I think the fed, the ecb, and the bank of england do a really good job in the capital markets. Companies are getting themselves in good shape, particularly investmentgrade companies. I think the difficulty is much more at the sme and. In the where certainly u. K. We are undercapitalized. The other way of looking at what we are talking about as we put too much debt into lots of these companies wear what they really need is equity and we havent really created a framework for getting equity into these companies. German companies have historically been much better and doing that than british or american companies. Somehow, we have to provide more equity finance for smaller and Mediumsized Companies because they are the real Growth Engine of the economy. If they are starved of equity capital, that is some of the other side of the coin that you made, which is relevant. Right, nigel. A pleasure having you this morning. Too short as usual. As soonget you back on as possible. The ceo of legal and general joining us after earnings. Coming up, bank of ireland reports a loss for the first half of the year, almost double what analysts had been estimating. The ceo of irelands secondbiggest lender joins us for her first interview of the day next. This is bloomberg. Annmarie welcome back to the european open. We are just under an hour away from the cash equity open. Futures to the green, but potentially going to be a little bit of a lackluster session. Bank of ireland reported a loss that the first half of the year which was almost double what analysts were estimating. Ireland secondbiggest lender meet. Ready struggling to the lender took in almost one billion euro charge on the impact of the pandemic. Joining us now is the bank of ireland ceo francesca mcdonagh. Thank you for joining us. I want to start with that impairment charge. Is this the worst Case Scenario . Francesca good morning. We have chicken taken the impairment charge. Two thirds of that reflects expected losses. Only third reflects actual decline or deterioration in our lending book. It is difficult to be prescriptive and definitive, but we are saying that should represent between 70 and 85 of our fullyear outlook. Messagethe underlying that the capital remains strong and we have made Good Progress in terms of cost and transformation, but obviously the impairment number, which is a reflection of how covid19 is impacting our economy and all businesses is obviously very apparent. Has the easing of the lockdown been impacting your economy or how has the recovery been since the easing started . Francesca sitting here today, i feel cautiously more optimistic than i did when we gave our First QuarterTrading Update back in may. The Irish Economy has opened up sooner than expected. We are not out of the woods yet and there are challenges, butc data suggests house prices are more resilient and claimants on unemployment support are 52 below peak. We have had a new majority government being formed and they have launched a material fiscal stimulus package which is being well received that represents 11 percent of irelands of gni. On a per capita basis it ranks up there with european country peers. We are seeing behavior in trading from our business and personal customers. After effectively the trough of april and may, we are seeing Mortgage Applications higher in july and 25 up versus july 19. Lets see how those translate into written business for the second half of the year and debit and Credit Card Spend his back to precovid19 levels, though i would be cautious that some of that is pentup demand, so still some real challenges, but i would they i am marginally more optimistic than i would have been back in may. Annmarie you along with a number of other ceos of irish banks had been called in to speak to the finance ministry. The government owns about 14 of your bank. Excessiverried about political interference in your bank and other irish banks . Francesca the government is a major stakeholder, a shareholder with 40 . You would expect the government to be very interested in how we lend to irish businesses and household. There is no political intervention in terms of how we price, how we charge customers, and how we grow and manage our balance sheet, but there is a lot of interest, as it relates to payment rakes. We have been front footed and providing payment banks and emergency liquidity to households and businesses. Across all of our business, we breaksreed 105 payment 105,000 payment breaks. That has given customers the breathing space they needed during the real trough of the pandemic. Matt what kind of demand are you seeing right now . Sawsume that you initially a flurry of demand as people started to realize they werent going to be bringing in any revenue. Has it stayed that high since the easing started . Francesca it hasnt. We agreed to 105,000 payment breaks for the first three months and those have begun to expire. What we are seeing is that about half of our mortgage customers in ireland are opting for an extension. Slightly more businesses are opting for an extension for another three months partially because the government stimulus package has not landed yet. In our u. K. Business, we have seen the take being lower between because government stimulus packages have landed and they are being effective and businesses are saying, i can go back and resume my original capital and interest payments, which is a good sign of economic recovery, but some customers and businesses are going to struggle with social distancing and the new normal and we have taken an impairment charge, part of that really large number i talked about, 180 million of that is because we dont think ill payment breaks will resume back to the way they were before covid19. Annmarie you have been targeting return on tangible equity 10 2001. Where do you see it now . Francesca to be honest, it feels premature to start being explicit about mediumterm targets. The world has changed for the last six months, so we are not giving guidance beyond 2020. In the mediumterm, getting to a return on tangible equity of 8 to 10 plus is still the longerterm objective. Right now, our focus is on supporting our customers, get through this crisis. We have given guidance on cost coming down and it has improved better than we said in 2021, but we are not being explicit about more mediumterm objectives today. Annmarie bank of ireland ceo francesca mcdonagh, thank you so much for joining us. Coming up, and other awnings interview. Tomerzbank, we will speak the cfo next. This is bloomberg. Welcome back to bloomberg markets, this is the european open. Im matt miller. We are 40 minutes away from cash equity trading. We see green arrows in terms of futures, especially here in germany. A slew of companies are putting out earnings. Among them is commerzbank. They have abandoned their goal for a fullyear profit after losses tied to wirecard and surging bad loan provisions that banks across the industry have seen. But at commerzbank this comes amid a change in leadership. The Company Appointed a new chairman this week and it is still searching for a new ceo. Fortunately, the chief finance officer is in place with her feet on the ground working. Bettina orlopp joins us now from frankfurt to talk about the Earnings Report and the plans going forward. Thanks very much for your time. About the lossk here. The Loan Loss Provisions are nothing surprising. We have seen them sorting across banks throughout europe, but the wirecard story is specific to germany. Much has that hurt you . How quickly do you think you can return to a profit after 2020 . Q2, we first of all, have shown a profit. That is really important. Announcement that it would become much more aspirational to reach positive net income given the corona impact on revenues, but also on the Loan Loss Provisions. Even more important, we want to look into q4 for the restructuring charges to really make progress on our contravention program. That all in all brings us to a negative net income for the year. Matt in terms of the wirecard story, before you were ceo at commerzbank come along before, journalists were writing stories about the problems at this bank and the amount of smoke coming from the company meant pretty much everybody should have known there was fire. The regulators certainly did not seem to wise up to that until far too late. Neither did the government. What do you think needs to change so we dont have another case where a German Company misplaces more than 2 billion euros . Bettina the discussion is ongoing and i will really not comment on cases from our side, but what i can say from a general point of view is that clearly one question on how do you regulate payment providers, something which need to be discussed by regulators and politicians. On the other side, i think everybody has to ask who is involved in cases like that, what have been the red flags and how do we deal correctly with the red flags which were out there . That is something that will happen over the next weeks and months, im pretty sure. Commerzbank and germany is past this, do you expect to be profitable again in 2021 and what kind of growth are you looking at after that . Bettina i mean at the moment, we expect a ushaped scenario. We expect to the recovery of the economy. That will then also have an impact on our revenue. How 2021 is developing and the guidance, to be very honest, it is too early to tell. I think i need to ask you for your patience and wait until the end of the year and then we are pretty much in a position to give some guidance on 2021 because it is also clearly depending on the strategy we will announce. You have a new chairman in place. Im wondering if youve met him yet and talked to him about costcutting plans . Bettina i have not met him yet. It is too early, but i will meet him soon. The role ofbout ceo . How soon do you think investors can expect that position to be filled . Bettina unfortunately, im not in the position to tell you because it is the job of the Supervisory Board and the newly elected chairman. Yes. We all hope we have clarity soon, but i have to say, we have a ceo fully in charge, plus a full management board, so we are pretty much in a situation where we can drive the key Strategic Initiatives and where we can implement the cost measures we have already planned for. Matt diversity is a push globally right now. I wonder if commerzbank wanted a woman at the helm and offer you the position, would you accept . [laughter] bettina nice try. I will not comment on that. [laughter] matt well, i had to try. Bettina orlopp, thanks very much. Appreciate your time this morning. The chief Financial Officer at commerzbank. Coming up, bp cut its dividend for the first time in a decade. We will speak to the oil giants ceo next. This is bloomberg. Welcome back to bloomberg markets, this is the european open. 30 minutes away from the start of cash equity trading. Futures higher across europe and the u. K. The bloomberg first word news right now. Laura . Thanks. A massive explosion has rocked the city of beirut. The video we are about to show is intense. Lebanons main port, killing over 100 and injuring thousands. It was so powerful it was heard from cyprus and blew out windows across the city. It was caused from highly explosive materials across the port, but they did not say whether it was an accident or attack. The white house and democrats hope to have a deal on a relief package by the end of the week. The two sides remain far apart on some key issues, but they appear to be moving closer to an agreement. Any votes on the deal likely wont happen until next week. The u. S. Is planning the highest level visit to taiwan since washington cut ties more than 40 years ago. The health and Human Services secretary will lead the delegation to discuss the Global Response to the pandemic and deliver medical supplies, the latest signal that there is support for taiwan in the face of increasing pressure from beijing. In the u. K. , lawmakers are urging Prime MinisterBoris Johnson to be more open about the travel risks associated with the coronavirus. A committee criticize the way ministers talked up the opportunity for a Summer Vacation only to reimpose restrictions without warning. Johnson has published a promised a public inquiry. 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. Matt laura, thanks very much. Laura in london with your first word news. Intessa reported a higher rise as revenue helped offset provisions. Francine lacqua spoke with the ceo. We want [indiscernible] the ecb want to wait for january to take the final decision. They want to look at the environment. The negative will remain. If there will be that these expectations [indiscernible] then they can change their attitudes. How has the economy in italy fared in july . What have clients been telling you about their mood for the future . Sure, like ther , pean countries [indiscernible] because in the lockdown [indiscernible] all the others are recovering. Possibly of gdp [indiscernible] the growth in gdp could be much higher. Think this describes a sense of urgency. Gdp growth would mean 2022, 2023. Do you think you buying ubi means we will see more crossborder mergers . Is somethinger that it is too early to talk about for the european landscape. Expectation is that it will reach that level in the next two years. Inre are a lot of areas which we need to have some more variety, especially the possibility to move toward integration and the possibility to have synergies emerging. See in the future of the european landscape, after the integration, there will be for thely my priority next 69 months will be to look again at some areas in wealth management. [indiscernible] months, we will be devoted. I think for us, it would be difficult to have that role in the european crossborder consolidation because it will be difficult for us, but we will do different. To for the time being, we are the second bank in europe, but after this transition so just looking at the positioning, we did the transaction, we made an important move. Was francinet lacqua speaking with the intesa ceo carlos mussina. Coming up, bp cut its dividend for the first time in a decade. We will speak with the ceo bernard looney. This is bloomberg. You know, engineers from all over the world including in china coming you know microsoft is very careful about its data promises. It will try to have strong relationships globally. Thingsw, we wont do that are hostile or viewed as hostile. Matt that was bill gates, the cochair of the bill and Melinda Gates foundation. The microsoft cofounder, one of the most famous rich people in the entire world basically, so i assume you know him. We have plenty more from that interview through the morning. Stay tuned to bloomberg for bill gates on the virus. He is obviously very big on vaccines. He said he wants a vaccine for every single one of the 8 billion people in the world. Minutes away from the market open. 20 minutes to be exact. Dani burger, what do you see out there . A lot of earnings from germany area dani really a lot. Commerzbank now cutting their a worse picture for 2020. This cut was driven by one single case. That one single case being wirecard, losing money there. Now they see bad loans, which impacts the 2020 result, being as high as 1. 5 billion euros this year. We have wirecard and souring loans. Allianz, a bit better of a story here thanks to pimco. The giant bond fund manager seeing more new clients this past quarter, which helps them some of the losses they had in the beginning of the year. Does say they do expect positive results and they think the performance is going to improve in the second half. People will stay cautious about equities. Bmw coming in worse than expected. Losing 1. 5 billion euros in the quarter. Matt a lot of carmaker news out today. We saw jim farley promoted to ceo. First car guy in that position since lee iacocca at ford. Dani burger talking you through some of the movers. Coming up, bp slashed its dividend for the first time in a decade. We speak to the ceo, bernard looney, next. This is bloomberg. Matt welcome back. This is the european open. Got an interview we have been teasing for a little while now. Lets bring in alix steel, our oil reporter from new york to talk with the ceo of bp. Thanks a lot. I appreciate the time. Bernard, thank you. Good to see you. Big announcement yesterday. Many analysts cultivate transformational shift. Whether they liked it or they did, one thing that i saw cropping up was an integrated Energy Company. How does that not eventually make you a Utility Company . Bernard good morning. Thanks for having me on. Yes, an exciting day yesterday. As you will remember as you were there on the day. On february 12, we set out and ambition to be a Net Zero Energy company by 2050 or sooner. People had at of lot of questions. They said they would come back later in the year and give them this autoroute march. Out a new strategy, a new Financial Framework. What this is about, they are increasingly complex. Looking for many things from energy. They wanted to be clean, reliable, affordable. To do that, you have to knit together lots of Different Energy sources. It plays very much to our strength because we are in natural gas, solar, wind. Worldsone of the largest Trading Organizations, giving customers what they want, industries, commercial companies, and enhancing value as we do that, so that is our strategy to be an integrated Energy Company providing solutions for customers and i think it plays well to our strengths. That does sound very much like to Utility Company. What is the differentiator . Bernard we dont intend to do Power Generation or Power Transmission and regulated markets. We dont intend to deal with Consumer Retail customers. We dont believe that is where our strengths are. Where our strengths are is what we have been doing in north america for over 20 years now. We are well known and you know us as a natural gas producer in the United States. What people dont know is that we sell over 20 of all natural gas in the United States and more importantly, that we have been providing Energy Management to over 100 cities in the United States as bp for many years. What those cities want is they want clean power. How do you get that . You get that clearly through wind, solar, and maybe with a blend of natural gas because the wind and solar isnt giving them the reliability that they need and natural gas can bridge that. They also want to predict the price of that. Because we have a large Trading Organization, we can hedge the price. 100 clean andbe as one of the largest traders and carbon credit in the world, we can do offsets for them. Sometimes through our own, and sometimes through the marketplace. If you put yourselves in the shoes of a city or in the shoes of amazon or mike soft, each of whom we are working on deals with, they want that solution and they dont really want to knit together six or eight things. That is what we do. Inmarie i have been alix have been to your Trading Floor in houston. Can you give me some insight into that . Can you give me insight into the back half of the year . Bernard we had a very Strong Quarter. I think we called it an exceptional quarter in trading. It was one of the few highlights of the business and the Second Quarter. Have avery fortunate to Trading Organization that is global. The Second Quarter was probably one of the most challenging quarters in our industrys history. It played well in a market, it played two people who have the capabilities like we do. It plays to people who have infrastructure positions like we do. A very Strong Quarter, but not one we would expect to be repeated. Struckhat i also was with when you were talking about returns and this brings into prices. , you still see higher returns of 1214 . That is predicated . Bernard we laid out the distribution policy, committed distributions. It is profitable growth, which is the returns growth, as well as the share growth. Here is an opportunity to invest in a company that is the carbon eyes helping the world the carbonized. Part ofns, in the early the decade, it is driven by the existing hydrocarbon business. As we head into the second half of the decade, you see the new businesses come to the forefront. There are businesses that we see in this space. We expect to go from 2. 5 gigawatts of power to 50 gigawatts. It is not just about renewables, it is about the consumer. A 1520 return. It is a consumer story. It is also a mobility story. Bp sells coffee. We sold 150 million cups of coffee. It is a growth business. Overll go to 20 million the next decade, so we are as excited about that. Still need 60 oil to make that happen . What we did with the distribution policy reset is what we wanted to do is consistent with strategy. This was rooted in strategy, absolutely rooted in strategy. We need to invest into the transition. We need to be able to do that at a range. Frameworkt out is a that has a balance point of 40 oil. We can do these things that 40 oil. By the way if oil is less than what he dollars, we will take actions to preserve that. Is a veryve laid out distribution policy. If there is excess cash flow, there is an opportunity for buybacks. What is on your postit note of assets to sell . Bernard well, you might expect it to be very difficult for me to answer that austin, but it is a core part of what we laid out yesterday. We are going from a business that for over 100 years has been predominantly defined by two commodities, oil and gas, predominantly defined by two businesses. And we are heading into a company that has a much more diversified energy mix with two growth areas. Time, that hydrocarbon business, which is really enabling the strategy and fueling the strategy over the next several years, we will see that business shrink and we will see our emissions shrink that business. We are saying we will see about a 40 reduction in production over the next decade and that will come predominantly through divestments. We were at 2. 6 in 2019. We sold our alaska business and we obviously have a long list of that we can do, but we cant go into detail today. Me what wouldtell be the priority . Bernard i think we are looking clearly for continued investment. Per and im in the near to medium term will go into our hydrocarbons business. The refining business. We are looking for probably two things, quality, we have increased the thresholds we demand from the hydrocarbon business. We have shortened the payback periods that we require. We have really ramped up the quality of the return we are expecting. We want to make sure we can continue to make it more environmentally efficient and we are continuing to do that and we have lots of plans to do that. We will invest. It will only be in what is the highest quality and it will only be in that which we believe we can do on when accretive basis in the environmental space. Alix i look forward to any updates you can give us as you transition into the space. I really appreciate the time. Back to you. Matt thanks very much. Bernard, thank you very much for your time as well. We love, we follow the company very well, love to hear the updates. Coming up, it is the market open. Futures pointing higher here in europe. Over in the u. K. , as well. With five minutes to go, we are looking at a 0. 6 gain on the ftse. 0. 7 on the dax. This is bloomberg. Annmarie just a minute from the open of cash equities trading. The white house and democrats aim for a virus relief bill by the end of the week. Bill gates told bloomberg the u. S. Should help foreign nations get vaccines. Beirut is rocked by an explosion killing dozens and injuring thousands. Fromrs continue to roll in largest banks. Merzbank berlin,u are sitting in it will be a heavy day for the dax given all the Companies Reporting this morning. Matt there is a lot going on in germany. You are looking at pictures of commerzbank, a big focus. Everybody waiting on tender hooks for the new ceo to be named. Higher res pointing moving higher throughout the last hour. We saw big gains in futures and now the live cash trade opens up and if we pull up the global macro movers screen on the bloomberg terminal, you can see in the lefthand terminal the indexes pop up as well as what looks like hillarys mouse, as they start trading live. 8 , starting big. Andftse up. 5 at the open the euro stocks block is still gray as we wait for a number of move intoributors to the benchmark. Up. 5 . European equity indexes are rising across the board this morning as we get these earnings. And investors are buying shares. Investors, assessing the prospect of more stimulus in the United States. This is something Steve Mnuchin said we could see by the end of this week and we also have gold this morning past 2000 an ounce. Real yields on the tenure treasuries, hitting below 1 . Joining us to discuss is the investment director at Brewin Dolphin. Thank you for joining us. We have equities higher but lower in theinding United States, gold is on a tear. One analyst said this is like disneyland or a freight train. Newsere anywhere for good because these trades show how investors are flying to safety . We are tracking Economic Data and it does seem the data recovering still. We looked at the latest pmis and they look pretty good to me so there is evidence we are heading in the right direction and against a backdrop of potentially more stimulus coming ofm the u. S. , there is a lot political determination to get a deal so i think there will be more stimulus, which will avoid the extra Unemployment Benefits falling off a cliff and i think Monetary Policy remains very thinktive and to us, we the monetary and fiscal backdrop is supportive and Economic Data is more we are there evidence we are in the recovery stage of the Business Cycle and as a result, we think equities should continue to do well, relatively speaking. Is the u. S. Stimulus picture or u. S. Economy what is calling the tune for markets right now . It doesnt seem likely have a real clear indicator of whether we are going to be risk on or risk off. What is driving these markets, janet . So, this week, the globalidence economy continues to recover so that is good news for investors and, of course, there is going to be more stimulus we think. Interest rates will remain very low for the foreseeable future and they will support the economy whenever it is needed. I think that is the same rhetoric for other global central banks. Stillackdrop for us is the focus. For investors, there is still cautious optimism in the market. Annmarie the pmis were encouraging, but the joblessness component of them signals a lot of worry when we have to jobs number out friday in the United States. Is this momentum sustainable . Matt janet obviously, there would be some risk. Knowledge there was pick up in the initial jobless claims been au. S. And there has rise in cases regionally in the u. S. Bumpy, the recovery is so we take that into account. Thehink generally speaking, trend is normalizing. There could bee some pickup in the unemployment number this friday, but generally speaking even cases picking up, we think because there has been more testing and annmarie welcome back to the european open. There 10 minutes into trading session and you are seeing green arrows across european markets this morning. Potential stimulus, geopolitics, earnings. The dax in focus today. Bmw, commerzbank, allianz. The dax is up nearly. 9 . For the Bloomberg Business flash, here is laura wright. Laura commerzbank has abandoned its goal for a fullyear profit after future losses tied wirecard. It comes as the lender seeks to emerge from a leadership crisis. This week, the lender appointed a new chairman but is looking for a ceo who knapp navigate the conflicting demands of shareholders. Theo attracted new money in Second Quarter, blunting the impact of outflows in the first three months of the year. The u. S. Bond giant brought in 23 billion euros in the period, allianz took a hit with profits declining 19 . Pressure from cheaper alternatives before the coronavirus crisis. Virgin atlantic files for chapter 15 bankruptcy protection in the u. S. After telling a london court it is set to run out of cash next month of a rescue deal is not approved. 15 allows Foreign Companies with u. S. Assets to protect themselves against claims while the work for a turnaround plan at home. Virgin hopes to secure a rescue package. That is your Bloomberg Business flash. Matt laura wright in london with your business flash. 80 of europes Biggest Companies have reported numbers for the Second Quarter and while most forecasters saw the coronavirus crushing earnings, maybe they were too pessimistic. Bloombergs surprise index shows 40 of Companies Beat expectations significantly higher than prior quarters going back to 2018. Which is weird, because i feel like over time, 76 of Companies Beat expectations on the s p 500, but maybe analysts have been doing a better job lately . Iset mui, at Brewin Dolphin still with us. It is not always about how much you make. It is about how much more you make than the market anticipated, so how has earnings season than . Been . Janet it really depends on the sector. Generally speaking, the earnings in the u. S. Is quite good. Have already put in a very pessimistic scenario. They had been expecting a 50 year on year in your earnings in earnings. It is still quite negative because of the covid situation, but we observed it is dependent on the sector. Companies like amazon and microsoft are doing extremely well and the tech sector benefits from covid, but other sectors, as we saw yesterday, Energy Companies like bp have posted a large loss because of the pessimistic outlook of the oil prices. We think it is very important to be in the right sector. We like the tech and Health Care Sector which have growth quality in the market. Annmarie i want your take on the dollar. It had an absolute meltdown for the month of july. Is near the most oversold levels in a decade. Do you think the dollar will bounce or will it be tricky to place ahead of the u. S. Election . Saying theave been dollar is likely to weaken. The drivers of the stronger dollar have been fading, so there has been a huge differential between the u. S. And europe, but that has narrowed significantly. That should narrow further. As well. Mic situation, we have seen more cases in the u. S. And the europe data is getting better, but these macro Interest Rate drivers have been reduced, so it is unclear but we generally see that we have been saying the dollar should we can, but the dollar actually has weakened already. We think it could be trading sideways right now so there is more clarity in a macro and Interest Rate drivers. Matt i want to update viewers on the spain pmi numbers. Are out andg pmis now we are looking at Services Pmis in spain. 51. 9 is the reading. 52. 3, andst was for forcomposite now in spain purchasing Managers Index rises to 52. 8. That beats the forecast of 52 even. In terms of the European Economic picture, we talked a little bit about the possibility of a decoupling. Do you see europe doing better in the recovery than the u. S. , or is the u. S. Still going to rein supreme if we get this fiscal package at the end . Is it possible for the federal system to do better than the social democrats of europe . Think the recovery in the u. S. Would be better thetually, because i think u. S. Consumption has potential. If you look at the personal income data in the u. S. , it has actually shocking up substantially, 15 year on year. As long as we get some extension of the extra unemployment comingnd other through, im confident the u. S. Consumer will be able to spend that. The European Recovery Fund is quite substantial, but ultimately there are conditions attached to how the fund is itng used and dispersed, so is likely to be less dynamic than the u. S. In terms of fiscal policy. Annmarie thanks for joining us. Janet mui, investment director at Brewin Dolphin. Next time, we need to talk about whatever comes out of the u. S. Come of those checks, whether that will continue the consumption we seen in the United States. Bill gates says u. S. Data from tiktok would be safe with the software giant. This is bloomberg. Matt welcome back to bloomberg market the european open. We are 20 minutes into the session and looking at gains of more than. 8 on the ftse and the dax in frankfurt, up. 7 and the cac in paris almost up 1 . Lets talk about microsoft. It carefully toed the line between washington and beijing for decades, but major hurdles remain as the tech giant works to satisfy both the Trump Administration and the shareholders of chinese parent tiktok parent. Bloomberg spoke exclusively with bill gates. He is cochair of the bill and Melinda Gates foundation and the heounder of microsoft and talked about the growing tech war and doing business with china. Bill the whole situation is novel in terms of what are the technicals involved here . What principles should china apply to companies in china or the u. S. And are those reciprocal and predictable . Now. Ot at the company china. Ade investments in we have engineers from all over the world, including in china. Microsoft is very careful about its data promises and we will try to have strong relationships globally. We wont do things that are hostile or viewed as hostile. What about the app in general . Ap is very popular thisp. Something you. Would like to see in the microsoft family . Tiktok it is bill it is nice that it has been some competition through innovation and it does not look like it is preventing that innovation from being available, that that makes much sense when you want new things out there. I am not in the target audience so i am certainly not expert. Ive gotten a lot of education from my daughter about this and she spends time on it. They did a great job on it and theres a lot of ways to take it and hopefully that is allowed to happen in some form. Emily lets talk about what is allowed. Is the Trump Administration correcting trying to force this sinese company to sell tiktok u. S. Operation or shut it down in the United States because it is chinese . Subjected company be to that, 100 million americans are using it . Bill what law . If this is such a clear thing, why wasnt it clear 3, 6 months ago . When people make investments, they should understand what is allowed and what is not allowed and therefore, what is the reciprocal principle involved in this thing, so maybe i havent read the right article. I dont understand what happened , imturday, but anyway focused on the foundation and ill probablynd advise at some point, but i am not at the center of this decision here. I want your thoughts on the antitrust situation. Im sure the hearings have been a bit of deja vu for you having gone through a lengthy review process yourself. At look Like CompaniesCompanies Like apple and google and think they have become too powerful . Is this a way to preserve competition . Bill these companies are shaping the economy so the idea that congressman get a chance to talk to their leaders and find out what they are doing in terms of media and competition, that all makes sense. They were lucky there were four of them on the hot seat. With criticsmyself even sitting next to me. Guess we are getting nicer to ceos than in the old days. I always felt going to washington and talking about our values and what we did was helpful, particularly through this pandemic were these companies have done so well, now understanding what is it like to be an entrant . Thereare general issues that did get raised. That was bill gates, cochair of the bill and melinda speaking totion bloomberg. We will have a lot of that throughout the day. We are 25 minutes in todays session. Bank of ireland is on a tear this morning, up nearly 10 . This comes as they had an underlying loss of 669 million euros, but the ceo told us, feeling more optimistic. Bmw, cutting 1000 jobs and more than 2 lower this morning. First quarterly losses since 2009. It has been a dismal quarter for the autos, which i know youve been keeping your eye out for season. Matt yeah, well, every season. Im always watching the industry closely. Partly as my job, partly because i care about cars. About thesomething new ceo afford . I of ford . Myave been following ford entire life and jim farley, a tremendous car guy, has been promoted to ceo. It is fantastic news, i think, for the product. 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. You say the customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept. 5g, everybody is talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item, corner offices for everyone. We just have to make more corners in this building. Chad . Your wireless, your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch to Xfinity Mobile and save up to four hundred dollars a year on your wireless bill. Plus, get two hundred dollars off when you buy an eligible phone. Matt welcome back to bloomberg market the european open. We are half an hour into the trading day and we are looking at headlines coming across from sweden. A slew of swedish Economic Data coming across, including june industrial orders, rising 6. 7 in the month. They had fallen 11. 9 in the year, but there is a lot more there and if you want to look more deeply into that, you can sweden on your terminal. You can also type risk go to see is acting right now and you can follow that on the bloomberg terminal. Lets take a look at the bloomberg at the stoxx 600, i index and, benchmark there is a bloomberg screen, the group ranked returns, showing the different industrial sectors and how they are moving. Oil and gas, the biggest winners as the underlying commodity price rises and basic resources are up. Food and beverage, the only loser today, although health care is perilously close as you look at most of the sectors winning today. Lets get the bloomberg first word news this morning with laura wright in london. A massive explosion has rocked the city of beirut. The video we are about to show is dramatic. Itwas lebanons main port, blew out windows across the fromal and was even heard cyprus. Latest figures are over 100 dead and 4000 injured. Authorities say it was caused by explosive materials at the port but did not say if it was an accident or attack. The u. S. And china are planning to assess their phase one trade deal this month. Sources told bloomberg the discussion between Robert Lighthizer and the chinese vice premier will take place august 15 against a backdrop of rising tensions between the two countries. In the u k, lawmakers are urging Boris Johnson to be more open about travel risks of the coronavirus. In a scathing report, the Criticism Committee the talk of opportunity for vacations only to restrict without warning. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Laura write in london, thank you. The white house says the democrats are aiming to strike a deal by the end of the week but the two sides are far apart on some key issues. Treasury secretary Steven Mnuchin and says they are not at the point of being close to a tried to agree to a timeline. It follows a meeting with nancy pelosi and chuck schumer. For more, Michelle Jamrisko joins us with more. Is there a decent chance we will see a deal finalized this week and run us through the sticking points. Are nearlygotiations impossible to predict so we could see developments hourbyhour and someday language from secretary mnuchin and others on the democratic side but at least they are affirming they are hopeful they have set the goal for the weekend and it is encouraging the two sides are reportedly exchanging written negotiations at this point so they are talking seriously about where they differ, but plenty of sticking points remain, how much to extend the unemployment insurance. There is broad consensus on the need to continue that support, but worry among republicans if the benefits are too generous, you may see workers stay home rather than try for a job that might not pay as much. There is urgency to extending benefits that ran out last friday and to watch for a few evictions. S, President Trump pledged some action will be taken to protect renters from being evicted and within congress, there is debate on state and local aid democrats want to include versus Liability Protections for employees favored by republicans. A lot to hammer through before a deal is reached and it wasnt long ago before i covered the u. S. Economy and this could be a rocky journey ahead. Question 5400 billion dollar question these days, what happens if they dont reach a deal by the end of the week . Michelle we are doing trillions these days so the numbers are large. Politically, trump has said he is weighing using executive powers to push their aid if no deal is reached by the end of the week am including evictions. Jobless benefits and the payroll tax. Mark meadows said later they are holding off on using executive power for now so we may or may not see more on that side. The house is already out on the august recess and the senate is set to start recess on friday so regardless, lawmakers have to adjust schedules accordingly if talks drag on. Economically, the 2. 2 trillion package in march is fading fast and businesses and workers alike are looking for what further support they might gain through the end of the year and meanwhile, Economic Data has reassuring. We had a good manufacturing report this week but most figures have been pretty bad, including the labor market. We get another jobs report friday and that may ramp up pressure to find fiscal support. Federal reserve officials this week but we need to get more support to the economy. Annmarie Michelle Jamrisko, thank you for joining us. Hopefully we will see a fiscal deal. We have breaking news to bring to you from china. They are saying taiwan is the most important issue in relations with the United States. This comes after the fact we learned alex azar, the health and Human Services secretary in the u. S. Is going to tie want to discuss covid19 and the international response. It is the most senior u. S. Official to visit taiwan since 1979. We are getting chinas response to that and they say they oppose this official interaction between the United States and taiwan. They say michael pompeos remarks on the Hong Kong Affairs are wrong. We will be keeping an eye on all of this as trade negotiations and talks continue in august, august 15. A lot going on between beijing and washington. Coming up, and explosion at they roots main port rocs the city, leaving more than 100 dead. We will bring you the latest from lebanon. This is bloomberg. Matt welcome back to bloomberg market the european open. We are 40 minutes into the session and looking at gains that are increasing throughout than 1 y trade, up more across all the major equity indexes in europe. Lets get over to laura wright for the Bloomberg Business flash in london. Down disney is doubling on its streaming business. Its liveaction remake of willgo straight mulan at 30. Erview, pricing commerzbank has abandoned its goal for fullyear profit. Future losses tied to wire card as well as surging bad loan provisions. It comes as the lender seeks to emerge from a leadership crisis. This week, the lender appointed a new chairman but is looking for a ceo who can navigate the conflicting demands of shareholders. Rent for homes in london are set to slumped to the lowest level in six years as the slow opening is weighing on demand. The capital has seen a 3 drop in the first half and according to a report from the property website, it could fall 5 this year. That is your Bloomberg Business flash. Annmarie laura wright, thank you. Lets get the latest from lebanon. The deal we are about to show you is quite dramatic. There was a massive explosion at. Eiruts main port, killing more than 100 and overwhelming hospitals. By highlysed explosive materials at the port but didnt say if it was an accident or attack. What do we know about the cause right now . We are seeing horrific and tragic pictures coming out of beirut. The government is saying nitrate stored at the port. The consignment was there for at least six years and i think they are also indicating they are looking into why it was stored there, how it was stored there and they will be investigating what ignited it. If it is confirmed that is what happened. Former horror is made worse by the fact that lebanon was already in a bad economic situation. It has been mired in political difficulties for decades now. What is the situation like right now in the country . You are absolutely right, matt. Lebanon was already in deep trouble, its currency was losing ande, almost 80 of value you had inflation, hyperinflation, political upheaval, demonstrators on the streets and you had a great concern the lebanese economy was going to collapse completely so lebanon was struggling already with getting imports into the country, food imports which rely heavily on import, and for the loss of its major port, it is very likely to weigh heavily, the loss of the material, the goods that were stored at the port, likely to weigh heavily and with a country that was struggling to pay for fuel for electricity, for example. Timeis really a terrible for such a serious event. Imfarie what about the talks . Riad the imf have been going on for a while, but theyve been stuck because for various besons, one, there seems to the inability to agree on the type of reforms needed because lebanon for sure needs serious reforms in the way it runs its government, its finances, and the second thing, there cant be agreement on how big the financial losses are that lebanon has suffered. Themhe imf, that has put in a rather difficult position because they are going to hesitate to provide the financing lebanon so desperately needs if there is even an agreement on how deep the whole is that lebanon is in. Matt thanks very much for joining us. Our middle east executive editor, riad hamade talking to us about this terrible tragedy in beirut. Talk more about european Economic Data and the upcoming German Services pmi numbers. We have the return of Richard Jones from the mliv team. This is bloomberg. Annmarie welcome back to the european open. 40 minutes into todays session, green arrows across the continent this morning with the dax up more one more than 1 . Bp as dividends and sets out new targets for a shift to greener energy. Alix steel spoke to the oil giant ceo, bernard mooney. We had a Strong Quarter and i think we called it an exceptional quarter in trading. It was one of the few highlights of the business in the Second Quarter. We are very fortunate to have an Incredible Organization that is global. I dont think that level of performance is ratable. The second was one of the most challenging quarters in our industrys history and it played well in a market where there was a contango. To people who have infrastructure positions like we do so a very Strong Quarter but not one we would expect to be repeated. Also struck was with yesterday was when you were talking about returns, and this brings into account commodity prices. By euronet mission, you admit our project to make a lower return for oil and Gas Investment but you see higher returns at 12 to 14 . How much of that is 100 predicated on 60 oil and what if we stay at 45 . Bernard that is a good question. Yesterday, we laid out the distribution policy on our commitment to shareholders has three elements to it. Committed distributions, reset dividends, and a commitment to share buybacks. The second is profitable growth, the returns growth you mentioned as well as per share growth. The third is around sustainable value where we are actually saying here is an opportunity to invest in a company that is decolonizing and helping the world. Carbonized de eisen and helping the world. In the second half of the decade, you will see businesses come to the fore. We are about what we can do in this space. We expect to go from 2. 5 gigawatts of power to 50 gigawatts. Weve talked also, it is not just about renewables. It is about the consumer and mobility of the business, which we said is in the region of 15 to 20 returns. Our transition story is not just a Renewable Energy story. It is also a consumer story. It is also a mobility story, and people may not know. Sold 150 million cups of coffee last year, one third as much as costa does. This is a growth business. 10 millionfrom customer touch points a day to 20 million. We are as excited about that as we are carbon. Low carbon. Alix dont you still need 60 oil to make this work . Bernard what we did with the distribution policy reset is what we wanted to do is consistent with strategy and this decision was rooted in strategy. We want to become an integrated Energy Company. We need to invest into the transition. To do that, we want to be able to do it at a range of prices, and what we set out yesterday is a framework, a Financial Framework that has a balance point of 40 oil so we can do these things at 40 oil and by the way, if oil is less than 40, we will take actions to preserve that. What weve laid out is a very resilient distribution policy that enables us to invest into the transition while giving shareholders a fixed dividend and the potential for at least 60 of buybacks if there is excess cash flow. Matt that was bloombergs alix steel speaking to bps ceo bernard looney. Is our fx and rates strategist Richard Jones. Richard, i kid, but you got Work Experience in banks across continents and now you are here with us in berlin. We are seeing something that is historic. The real yields are very negative in the u. S. And hillary had a chart. 57. 45. It is it shows the entire Treasury Curve up to 20 years, below 1 . What does this mean . Richard good morningrichard . I definitely am in berlin. Im not speaking to you from canada because it would be very early. I think these bond yields are telling us, these negative real yields are telling us the bond market does not see the worst of the pandemic being over and the move lower we have seen over the past couple of months in bond yields is saying weve got pretty difficult economic circumstances in the coming months, and the actual nominal bond yields are going to continue to make new record lows by the end of the year. The big challenge for these developed economies is the Unemployment Rate remains too high and if you are looking at the pmi readings coming in this morning and the past couple of trend ofis showing the job losses across manufacturing and Service Industries and with the virus outbreaks and restrictions being put in place, it is preventing a steady recovery so the bond yields are telling us we are not cleared of the worst. We still have economic challenges ahead and yields will move forward by the end of this year as well. Annmarie richard, good morning. Also, the volatility on the treasuries, near lowest on records. Jeffrey gundlach compared this to descending to death valley from mount whitney. Is this the calm before the storm and where do you see this going yearend . Richard i think it has really been, since the beginning of june. Inhad a little price action may, but since june, yields have been grinding lower. I think that is where volatility is being depressed and i think this is a trend that will continue because the problem is, weve still got unemployment too high in the u. S. And u. K. And euro area, and even with the fiscal and monetary stimulus weve had, what bond markets are telling us we are going to need more of the same to stabilize the economies and essentially recover to where we were before the pandemic. It was a lot of talk in late april and early may about a vshaped recovery. Im hearing less of that and what the bond market is telling us the vshaped economic recovery is a fallacy and it will take longer to get back to where we were before the pandemic. Richard, we are seeing German July Services pmi come across. 55. 6. 56. 7,eliminary number was so it is a little under that. 55. 3 and weves seen pmis, Services Pmis from spain, as well. What do you think about the pmi numbers we have seen . Manufacturing has come out, services and is coming out now. By the way, how key is this pmi data for an economist and traitor like you . Trader like you. Richard there are a lot of forwardlooking elements to it and it reflects the most recent survey responses from various industries. It is interesting because you are seeing a dichotomy between headline numbers improving and heading in the right direction and fiscal and monetary stimulus we have seen, but despite that, cuttingseeing reporting jobs in spite of numbers improving. Get jobitical we creation happening rather than job losses happening in order for this recovery to take place and we are not seeing it from these pmis yet. Mliv fx Richard Jones, and rates strategist joins us from berlin. A risk on morning. This is bloomberg. Francine lufthansa beirut is rocked by a massive explosion after an explosion kills over 100 and injures thousands. Commerzbank cuts its outlook. The german lender abandoned fullyear profit amid the wirecard scandal. The pandemic threatens the entertainment giants traditional business but it plans to release mulan on disney plus. Im Francine Lacqua in london. The markets have a risk