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Facebook. Fears of celebrity boycotts. And jp morgan has said to have sent some manhattan traders home after positive covid test with plans to restack. Jamie dimon says work from home will cause lasting damage. 6 00 came in london, and a call over the past 24 hours, from the two veterans of markets. Gross. Y dalio and bill its about debt, deficits, and inflation risk. The veteran mindset, the warning shots are plenty. Annemarie good morning, manus. Certainly in different ways both these titans as you say are playing those risks. For ray dalio, he said the dollar is under threat. My question is, what would become the global new king currency as he makes the point in his interview with erik schatzker, the three major currencies all have the same basic problem. Gross, for him its about becoming more defensive, isnt it . Manus it is. We will pick up on the trades in just a moment. Do with to corresponding cash having negative rates. Lets see what our guest host makes of that trade. Take it away. Marketsa huge stay, the are dissuading for what jay powell and the fed have to say. The Msci Asia Pacific getting a little bit of a bid, the u. S. 10 year yield not doing much. Nasdaq futures, we will talk a lot about this in terms of whats going on in tech. , andrace earlier losses Kim Kardashian getting involved, saying she wants to actually freeze her account due to whats going on with the social network. She has 180 million instagram followers, a lot more than you and i have. Interesting to see what kind of impact that will have. Investor hedges focused on the fed decision. Shifting to a more relaxed approach on inflation, but the key question is, will new guidance come today or will markets be cap guessing until after the elections . Fed faceslio says the tough choice of congress manages to pass a muchneeded stimulus bill. We know that if a big bill is passed or of next year, we have a larger deficit, we know that the Federal Reserve will be faced with the choice of either allowing Interest Rates to rise, or buying and monetizing that debt. That diminishes the value of those bonds. Us annemarie joining us is the head of global macro strategy. The morning to you. We heard from bill gross yesterday and we heard from ray dalio as well. What of these traits do you like out of all of that . Is this a time to stock up on say, or tech, as some is it more of a defensive trade ahead of the fed . Longer term than just positioning ahead of the fed, but frankly, when you look at what the fed came out with in august already, i can imagine theyre going to come out with that meaning you policies. So theres a question about forward guidance, but the reality is we already know Interest Rates are not going to go for a long time. When it gets projections into 2023, that might show us, until that point weve had positions into 2022. We still think that equity markets can continue to move higher we have some gold in our portfolio. Trying to understand how does the fed deliver my question to you or markets, if we believe will get more of the same, what does that do to the spreads . You talk about highyield and investmentgrade spreads almost normalized. Is there further contraction to come in that trade . I think theres potential for further compression. Impressiveh an rebound normalization him as you said, since march. Weve already seen a big part of the move. I dont think the fed really needs to adjust itself at this point, its already pretty much set the stage for a of years to come. So there are number of challenges for spreads to tighten further in the next couple of weeks and months until the u. S. Election. Beyond that, they will be able to continue tightening further. Templeton isanklin boosting purchases of longer stated government debt. Does extending that duration provide a buffer . Much thatnot sure how extends duration today. We dont think sovereign yields are going to go anywhere, to be honest. Its almost as if the market is ready for yield curve control or understands that the fed can start buying if stocks are moving up. I think that higher yields would be a challenge for equity markets as well. That being said, im not sure how much more i would extend, id try to diversify a little bit, and we look at hard currency corporate debt, you have a lot more potential for spread tightening. We havent seen as much improvement there, and then in the corporate space, a bit more toward latin america that we prefer in the corporate in the current environment as well. Manus some interesting talk there. Our guest host stays with us this morning. For coverage for the fed meeting all day throughout. Got a fed special in london to get to, and the former fed vice chair. Lets get you up to speed with the first word news from our london hq. Wto has ruled the u. S. Violated International Rules by imposing tariffs on china. Any unlikely to lead to changes in washington. The u. S. Is removing the aluminum carrots from canada after being aluminum tariffs after being threatened with retaliation. U. S. Trade representative robert , his office expects shipments from canada to effectively signal a quota. Sources tell bloomberg jp morgan sent stapp home this week after an employee tested positive for covid19. The infection in the equity trading comes days after jp theyll be traders expected return to the office by september 21. First continue to rage from california to washington state. More than 5 million acres have burned, killing dozens of people. Ite of the impact has made to the northeast, skies over new york have been a milky gray due to the jet stream carrying smoke across some of the country. 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. Annemarie thank you so much. Coming up, ray dalio is having a. Anner year of next, were bringing our exclusive interview with him. Stay with us. This is bloomberg. We think there are cases where we can have winwin, where we are working on solving medical problems and working together on Climate Change innovation. When somesee this people talk about complete decoupling, think that would be a loselose. Bill gates talking about the u. S. And china decoupling. Ray dalio is having a bad year. Interview with erik schatzker, he expressed concerns about u. S. China relations. There are five kinds of wars and we are in four of those and we could be in a fifth. Theres a trade war, a technology war, theres a there is al war, beginning of capital war, and then theres the question always of military war. Having watched these things over a period of time and having close contact that the situation, we dont internationally have a rulebased system, so that there is a testing of each others powers, which is done in public. Watch one leader win and another leader back off on that brinksmanship testing, thats a highstakes, dangerous game. Its a big issue, and it will be a big issue for the rest of our lives. Graham allison wrote a wonderful book. Weve talked about it before. I would be remiss not to ask you about your firm, bridgewater. No secret to many people its had a challenging, difficult year. Are you confident, ray, that the firm can put all the stuff passed it, whether its external or internal, and most importantly, improve returns in your Flagship Company . I dont have a problem with my clients, because we have Something Like 140 billion of , where the Largest Hedge Fund for a particular reason. There are a lot of people who are not knowledgeable about that. Weve had a bad year so far. Portfolio was up a couple percent. , wevee last 20 years never had a significant, any significant downturn, all positive years. But we knew that there will come pandemic miss the going down, and thats the reality. I want to say theres a problem sometimes in the detail. Got a particular problem with one correspondent with wall street journal, and if you look at the particulars on the case that we went to in terms of misrepresenting what the situation is, thats an issue. That happens. We are transparent, these things come about. We are not worried about any of that. Were just operating in the same way weve always operated, and thats right. We have so far, a bad year. A reconciliation moment there. Ray dalio speaking exclusively to bloomberg. Nobodies perfect, are they . One day we all have failed trade. Part of the narrative was the dollar theres a threat to deserve currency and it goes back to physical largess. Do you share that level of concern . That deficits will matter one day soon. Esty i think the question is more about timing. Im not sure about soon. I think everyone agrees that we absolutely needed the fiscal spending, and we still need fiscal spending. I think passing the cares act is going to become more important to markets as we move forward. We needed this, given the situation to be the question is how long it takes to go down, but if all the major countries are in a similar situation, debt is rising across the board, i think were going to have some time until it early becomes an issue for investors. , if we hadnton spend why we have, would have been so much worse, a much more dire outlook going forward. Today we have a little bit more time before investors start to worry about these levels, inc. Given that its happening across the board, im not convinced that were going to have questions about the dollar, but i dont really see another alternative for quite some time. We do have nancy pelosi saying she wants congress to stay in session until they hammer out a deal, but that seems more and more unlikely. Time, other fed officials have pointed the finger at congress to get the fiscal deal in line. What do you think the market should be pricing and now, at this moment . Esty we are seeing some optimism, were not seeing this big worry in the market that the cares act 2 is not going to get through. Theres a view that if we dont get it through in the next couple of weeks, it probably will happen before the election. So hopefully a little pressure to do anon congress agreement. Ultimately i think a compromise will be found and will get a version out hopefully in the shorter term, because pressure is going to build, whether Economic Data starts to slow a little bit. August looks pretty good despite the lack of benefits. How long it will last is the question and it might Pressure Congress as well. V is you also said the fading, but not fading in equal scale around the world. Risk, andhev most at how does that translate to an adjustment for you . Esty we havent changed so much in terms of positioning based on this, mostly because everyone knew we would have that initial sharp bounce and its probably going to ease somewhat as we go into q4. I think well see a bit of a challenge for europe as the number of cases is growing. Theyre trying to take measures to avoid this, whether in france, spain, italy, or elsewhere. We will have to see if they can manage as well as they did in the spring, and be able to continue to move forward. So had this really strong fiscal impetus between the recovery fund, a number of countries like andany and france extending enhancing fiscal packages. Just quickly, bringing it back to the fed, what car i this morning said that the markets need to inflation, and, vaccine expectation. Might be inflation, but at the same time, what does it mean for growth . Esty i think its going to be a lot more about growth and employment. Inflation doesnt appear to be on the feds radar for now. I want to generate inflation, what we seen in last month or two is really making up for the spring, so they are probably going to look through this. Theyre not worried that inflation will come back in the shortterm and be a problem for the fed. What we want to see is that the labor market holds up, we want to see the initial jobless claims fall and the nonfarm payrolls continued to improve. Saying, were seeing a little bit of stalling and momentum here and it looks like thats what the fed will be focused on. Annemarie thank you so much for joining us this morning. Coming up, get reviews on the jobs outlook and covid facing ae, the u. K. Turbulent end to 2020. What does it mean for the bank of england . This is bloomberg. Annemarie good morning, this is bloomberg daybreak europe. Lets look at some of todays key events. New Economic Forecast for g20 economies at 10 00 a. M. London time. Then Prime Minister Boris Johnson, questions by the u. K. Parliament as the government juggles the Coronavirus Crisis and brexit negotiations. Maker and the ecb policy will join us to discuss considerations for a sustainable recovery. That conversation gets underway at 4 00 p. M. London time, and the fed, which is holding his last meeting before the president ial election. Investors are hoping for guidance on what policymakers want to see before raising Interest Rates. Annemarie lets stick with the u. K. Boris johnson has opened talks with tory rebels in an attempt to win their support to override the exit deal. The Prime Minister and other senior government officials held talks with leaders of the party on monday. U. K. Is facing a turbulent end of 2020. The bank of england officials are expected to lay the groundwork are more monetary stimulus with a policy decision tomorrow. One thing that caught my eye in the past few weeks is what we heard about the fact the government should wean the country off the furlough scheme, but then of course we do see other countries around the world, germany and france might extend their furlough scheme. All of this, coronavirus resurgence, could they change the course tomorrow . Esty im not sure if theyre going to change so much tomorrow. Theyre probably going to stand ready to work further if needed and it will probably be needed, but it might not be announced tomorrow yet. As you were saying, a complicated end of year and a complicated transition year for the u. K. Of other Boris Johnson in his government think they might as well get all the pain over with together and then be able to move forward in a more healthy way in 2021 and forward, theres plenty of time tonight more measures for any reelection questions. So it looks like hopefully is just a negotiating tactic, but the bank of england is going to have to im not sure theyre going to make a big announcement tomorrow yet. This, ife question is we have a sort of chaotic end of ,ear or a dysfunctional brexit does that take an immediate move to negative rates . 5 on america saying no brexit deal. What is your call . They said they were open to negative rates and contemplating it. All the central bank that already had negative rates before the pandemic chose not to go more negative and just find other ways to play this. So im not sure negative rates is always the solution are the best solution. Theres more room to expand the i program first, but yet think all options are on the table for the bank of england. Esty, thank you so much. Coming up on the show, the European Commission discussing an ambitious plan this week. We are live from brussels, thats next. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Annmarie good morning, 6 30 in london, im Annmarie Hordern alongside manus cranny in dubai. Wait clarity we from jay powell on the new inflation policy. Ray dalio says it would put the dollar under threat. Facebook versus the ftc, a possible antitrust lawsuit against the social network. Kim kardashian urges her instagram followers to flee their account. Some tradersds back to the table after employees tested positive for covid19. Does this derail jamie dimons plan . Good morning, i guess it is waitandsee mode until we hear from jay powell later today. The note that caught my eye, markets confront a quadfecta. And the fed needs to consider all this before their future guidance. Outgunned ie to be somebody we both respect. It is all about this. Asymmetric risk in the bond market is to the upside. With thelimits on it, fed tolerate a bond yield spiking . What would that do to the market and to yield curve control . Course, all of this before the u. S. Election, 48 days away, and this is the last fed meeting. Everybody talks about the skinny brexit deal. Nobody knows what will come down the pike. S p, asia and european stock markets this morning trump says a vaccine will be available in three to four weeks. Perhaps a little pushback from bill gates. Watch the interview on bloomberg. Com. Thiss are a little better morning. Euro stocks flat. It is all about what the pboc did. We have swag, we can hold out, we can let this go higher. Viewve citi moving their in the next three months. Oil is rebounding, up 1. 9 as we see inventories drawdown. Is theopean commission other key driver of the narrative. The president is expected to unveil a and vicious emissions cut plan. It will leave no sector of the economy untouched, and will force wholesale Lifestyle Changes and stricter standards for industries. Maria tadeo will keep an eye on how strict. How green can we go . Greenerhey want to go and want to do it quicker. That is the message we will hear from them today. It is part of the European Green deal, the flagship project from the European Commission. It was sidelined because of covid19, but they want to resuscitate this project. She will pitch to the European Parliament and european governments to cut emissions 55 by 2030. T to the current target is 40 . He wants to increase that there are reasons why this is happening. A lot of it is politics. We know the idea of cleaner energy does go well with voters in big cities. The European Commission is this is the future, and a Growth Opportunity going forward. Things up forn investors and force major changes in industries that will have to modernize. Airlines, the big industries, carmakers, agriculture whoever gets to do that first is that the legislation will be the winner of the future, at least that is the thinking from the European Commission. Thearie as part of bloomberg climate festival, one question on europe, bring us down to earth what it means. What did she say about the outlook for the european economy . Be the otherill major pillar, because we know she will say she is concerned about the prospects for the european economy, and this is a health emergency, and the idea of a recover is fragile. One key aspect we will hear from her and this is interesting for investors is implementation. We have seen fiscal stimulus like never before emma we will tappingcommission markets which are play bonds sometime this year. How is the implementation going to happen . What reforms will he get from italy . There will be a focus on that. Cautious on the economy but they want to see the Implementation Plan and reforms happening. Annmarie that was maria tadeo live from brussels. Today maria and matt will speak to the pres professor dont miss that. Switching gears, apple is on board of the bundle bandwagon. They will offer package subscription deals. Behind the timing of this move . This was a longawaited move by wall street. What does it mean for revenue expectations for these services . Been you say, people have expecting Something Like this from apple for a long time. There are various digital services, and offering in a bundle makes sense when going headtohead with the likes of amazon. This allows them to offer the same services at a lower price than what you might pay for on amazon services. It is competitive in that regard. Up and apple tv plus running, plenty of subscribers under the hood, that makes it easier for those subscribers to upgrade to this bundled subscription giving them an instant base of users for all services. In terms of lot momentum. The revenue is not gigantic, some estimates are that it could increase Services Revenue as much as 7 . About how it ties users into the ecosystem, that is what is big for a company like apple. They need users in the Apple Ecosystem buying hardware and software and content. Considering i am already on the Starship Enterprise for 15, i think i am all in. I love the subscription. Lets talk about facebook. From the ftc. What is the worstcase scenario with the risk of this going back on some of the deals facebook did . This is not an existential risk. It is a big risk. Politicians in the u. S. , top president ial candidates, others have been talking to break up Big Tech Companies like facebook , which they see using the scale in a monopolistic way to crowd out competitors. If this goes wrong for facebook, they could be in a position to selloff their bigger properties. Manus ok. Thank you very much, they become with the latest potential. Itigation we have an exclusive interview mendelsonwith michala at 9 00 a. M. Lets get your first word news. Laura President Trump is touting it as the foundation the United Arab Emirates and bahrain signed an accord with israel. They also agreed to Exchange Ambassadors as soon as possible. Are light on details and leave crucial questions unanswered. President trump is preparing to decide whether to approve oracles alliance with tiktok. It is not an outright sale. Oracle would invest in a restructured global tiktok. President trumps controversial pick for the Federal Reserve does not yet have Senate Support to win confirmation, according to the number two republican in the chamber, john thune. Has drawn criticism for her views on monetary policy. Some republicans have said they would not back her, and others seem on the fence. 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 thank you so much, laura wright in london. Top executives and policymakers gather this week for the firstever bloomberg green festival. Andoke with the chairman ceo, and asked him if oil are buying utilities. That conversation, next. This is bloomberg. Annmarie im Annmarie Hordern in london with manus cranny in dubai. With Oil Companies and their balance sheets, will they start buying utilities . Climate change is a global emergency. We need everybody on board. I think that is possible. [indiscernible] , we see that less and less people are denying. ,he problem of Climate Change in many cases they have been delaying climate action. If the reality [indiscernible] , i am please people are coming aboard. In a0 years competitive position. Continueology, if we doing that [indiscernible] we are seeing plenty of opportunity. Reach agreements with companies and austria, france, germany. We have huge potential to make renewables in these countries. Offshore we are one of the leading companies. We started 20 years ago [indiscernible] achieve. Ake time to we welcome everybody on board to do the necessary things to improve. Annmarie do you think they will try to start to buy utilities . There. Ink the market is they are already buying certain things. We are in the market and somebody is making a good offer, they have to make a decision. Every day we are moving 1 to 2 of the capital in the market. Offer,ary made a good how about that . Great conversation between the chairman and ceo speaking to annmarie. Track. Tay on energy oil is extending its gains across the market. We have reports from the iea showing a drop in u. S. Stockpiles. Biggest oil trader is the global stockpiles will keep shrinking. The secondbiggest trader says we are going back to surplus. Lets speak to christof h. Ruehl , senior fellow, columbia university. Always great to have you with us. We have the risk going into the opecplus meeting of demand relapse or surplus build up. How do you see the market . Do you see it facing a surplus build . Christof good morning. It goes up on tuesday and down on wednesday, then back up a little bit. We have a sluggish demand recovery. The economic recovery is not very strong and not synchronized. Different recoveries across different regions. We also have huge stockpiles at near record levels. And to remind people, it is higher than it was in january 2017 when opecplus was formed. [indiscernible] this time with more sluggish ,emand and a bigger stockpile it will require more discipline. Annmarie we talk about the demand side, i know you used to work at bp. You must have seen the report yesterday. They are saying this could be peak oil. What do you make of that . Do you think the world will ever see 100 Million Barrels a day again . Christof that was a very good question and important question. Camp saying 2019 was not the peak. We are in a situation where demand was approaching peak. Is not i would see that with any recourse of energy transmission. Longterm,k at the very sturdy trend of improvement in oil efficiency. Is a simple measure which tells you the amount of oil you need. We need 70 liters of oil to produce 100 of global gdp. Trend and ride it forward income blinand combie arrived indy have the early 20 30s as the point of peak demand. That is not a forecast. Indicator demand peak is not as useful of a concept as it used to be 15 years ago. Corona has accelerated that. Oil demand was hit harder than gdp. I think within this decade we will see a peak in oil demand and oil markets will start to shrink. I want to get back to the market, the next 2436 hours will be important. When you see bloomberg stories about the uae complying by 10 , is that significant . My last guest said do not worry about it. And that we are getting too perplexed by this. It is a serious breach by a core member. What does it mean . Christof i dont think it means much. I dont think this is the time you would see one of the core members openly act against the party line, that will not happen. , the moreterm problem successful they are, the more they sow the seeds of their own failure. But not goodble, enough. Are,ore successful they the more you see the need of the and the needr diminished. In the longterm, if we are entering a phase were oil demand plateaus or peaks, the markets shrink. This will change oil markets completely. There will be no more room for producers to cut production. Annmarie thank you so much for joining us. Christof h. Ruehl, senior fellow, columbia university. Coming up, jamie dimon says it is time to get people back to their desks, but his plan hits a major setback after an employee contracts the virus. This is bloomberg. Annmarie good morning, this is bloomberg daybreak europe. Im Annmarie Hordern in london with manus cranny in dubai. Jamie dimon wants to get people back to the office, but may be facing a setback. Why is dimon so eager to get workers back . Dani we talked about how there is a study on jp morgan employees and they were less productive at home. It is probably a most likely goes further than that for jamie dimon. This is a man who has been going into the office since june. On a virtual panel, he said it is good to go back to work, it makes sense to open carefully, and see if we can get the economy growing. He mentioned economic damage and pressed on on the social damage saying there could be more depression and overdoses and we could lose people because of that. At the same time we heard jp , andns jamie dimon speak employee in new york city and are trading Equities Division contracted coronavirus. They have had to send employees home. City planners in new york new this would happen as we started to get offices open again. They are prepared for a resurgence as offices start to open. Manus thank you very much. Annmarie hordern delivers creative combustion every day on radio. Yourrie i do my best, but the one where creative combustion comes alive. Futuresin focus, u. S. And european futures looking for direction. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Anna good morning and welcome to Bloomberg Markets european open. I am anna edwards in london alongside matt miller in berlin. Today the markets say it is getting busy, u. S. Tech stocks are the most crowded trade ever according to bank of america. Futures in europe and the u. S. Right now are divergent, the cash trade is an hour away. Top headlines from the bloomberg terminal, fed

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