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Powell makes his strongest plea for greater spending. Stocks selloff into the close, and treasury yields slide. Christine lagarde warns of a cliff effect if fiscal aid is ended too soon. France downgrades fourthquarter growth expectations to 0 . On nightlife. Down the german capital joins paris, madrid and london setting a curfew for businesses amid a resurgence in coronavirus cases across europe. Lets look at german industrial output figures. Speaking of the economic engine of europe, august industrial output falling 0. 2 month over month, that is worse than the estimates for a 1. 5 percent gain. In terms of an industrial output, things do not look good. News lets get breaking here in london. Numbers coming through from various corporates including tesco. Up by 7. 2 , the estimate was 7. 3 . They werenting appointing a new cfo, who will join the board. I think we knew the previous incumbent was going to leave the business, and this new cfo interesting to see if they give any comment on what is going on with brexit. We are getting other lines around profitability. We are expecting to see profits drop in the first half because of the cost of coping with coronavirus. In the First Quarter they saw a bump up in sales because of a move to online and away from the discount retailers. That is what we have from tesco. Lets go to the broader picture for equity markets. Asian equity markets taking in and European Equity futures looked sluggish. Ftse futures fairly flat. Asian session taking in stride President Trump coming off stimulus talks. Does the market not mind because they think biden is in the seat, or is the effect nuanced that he is planning to help out airlines . A lot is going on here. Matt very interesting. There are so many things you can today bearish for markets , from calling off stimulus threats toe possible Big Tech Companies that have been big behind the rally we have seen so far. Of see the gmm in terms equity index futures, a mixed picture. Down 0. 3 . Lets go to first word news. Berlin is the latest european city to crack down on nightlife, joining ireland and france. The german capital will prohibit outdoor gatherings and close bars and restaurants at 11 00 p. M. The new rules go into effect saturday and will remain enforced until the end of the month. The French Economy stagnated the last three months of the year, spikingncertainty is consumer spending, it downgraded its growth forecast from 1 to 0 . It says output can contract again if cases increase. Eddie van halen has died. He secured his bands place as one of the best selling acts of all time. Known for songs like, jump Rolling Stone put van halen as 8 guitarists of all time. Global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Guitar magazine listed him as the best guitarist of all probably for one of his best known songs, which plays before the roy orbison cover. One of my favorite albums of all time, 1984. He will be sorely missed. Anna my tastes are more entrylevel van halen. Someone whose career you follow closely. Lets get back to the business of markets. Global markets are weighing the impact of President Trumps decision to call off stamina stocks hours after jay powell recovery. A u. S. Futures are edging higher now. Markets fellas if initially, there was Immediate Reaction to that twitter storm where President Trump was busy on twitter. He called off the talks, but there is a limited extent the market was expecting something to come before november anyway. Stimulus to some extent is certain, but the timing is uncertain. Laura absolutely, and the reaction was understandable, given the fact that risk assets have rallied in recent days on these restarted negotiations, and the expectation the president s health would spur urgency for stimulus packages. But we have seen this combative rhetoric be pared back with a followup tweet that says we need stimulus and Additional Support for airlines. For markets, they are looking through this escalating rhetoric leading up to the election. It is unsurprising given the fact we will see these bouts of volatility, given that politicians will amplify their posturing ahead of that key decision date. Matt markets, u. S. Markets are expected to bounce back a little today. The mispriced puts them up 0. 5 at the open. Does this mean in your view markets thank the election is close anyway, and maybe trump wins . Is that what investors are saying . Laura i dont think that is the case. I think the tough talk we see on stimulus negotiations over the last one he four hours does not change the calculus over the last 24 hours does not change the calculus. The fact we are likely still to see a democratic sweep. We see biden holding onto a durable gain across national polls, leading by double digits in key swing states, and rising inbability of a blue wave probability markets. That has been undeterred over the last 24 hours. At this stage it would portend a massive stimulus package likely in early 2021 with Infrastructure Spending in the pipeline. In the near term, i expect both parties will talk up big stimulus packages. Markets will pin hopes on that instead of this nearterm rhetoric we are seeing emerge. Anna what about the ecb and their role here . Is the next level of stimulus in europe going to come from Monetary Policy or fiscal policy question mark we heard from Christine Lagarde, urging to avoid cliff effects, in which tooal aid is withdrawn soon. That is her greatest fear apparently. What do we expect . Laura a case of both, monetary stimulus with lagarde confirming that is in the pipeline. On the fiscal effects, given the effect that the headwinds we are facing in europe are not going to be targeted by the monetary pipeline. At this stage, they want a forceful fiscal response, and we will likely see more qe at year end. This comes at a critical point for europe, we see these recoveries emerge and renewed virus resurgence particularly in france and spain, likely to halt activity entirely. That is a critical point that we will need stimulus. From an equity perspective, we are at a critical juncture looking at the fox 600, it traded sideways since june, and we are seeing a convergence of key technical points which suggests a breakout. Ultimately we likely need to see a democratic sweep in the u. S. Because that will spur inflation trade, and provide uplift for europe. In the near term it is crucial to have more fiscal and monetary stimulus. Matt thank you very much for joining us, laura cooper, our mliv macro strategist. You can get her work and her colleagues on your bloomberg terminal. Up next, a protracted period of volatility. Teachers stabilize. Futures stabilize. We will speak to Thanos Papasavvas next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 45 minutes until the start of European Equity trading. European futures point to the downside. U. S. Futures point to the upside. President trump has called an end to talks on a new stimulus package, which is what those futures are reacting to. Trump says he instructed representatives to cease negotiations until after the election and a major bill would come after, quote, i win. A call for greater spending to avoid damaging the economy. Stocks slumped the u. S. Close and the dollar spiked. Those moves have stabilized this morning. We are joined now by Thanos Papasavvas, cio founder, abp invest. What stimulus do you think would be appropriate for the u. S. . President trump said some stimulus is needed, the fed says it is needed, a lot of economists say it is needed, but you look at Savings Rates in the u. S. , they have gone higher. Does stimulus need to be targeted, or what will be most effective . Thanos i think that is a key point. We do see savings increasing, but those savings increasing our from part of the population which cannot afford to save. To the crisis after the Global Financial crisis, it accentuates inequality in incomes, and increases the social unrest partly from income but also education and health. I think he is using this as a caret. As a carrot. I think his focus would be more in terms of the Supreme Court than getting this on dustin before the elections get this undusted before the elections. I think they will provide as much stimulus as necessary to ensure economic growth, to avoid increases in unemployment, and protect the industries which have been impacted by that. If that means 10 Percentage Points higher of overall levels of debt, or 3 5 higher in terms of the deficit, so be it. That is the cost for social cohesion. Cost of that the high debt to gdp ratio question mark during the financial crisis, it was difficult to get a trillion in stimulus, it was difficult to get 700 billion out of the u. S. Congress. Now that trillions are flowing like everyone has accepted mmt, does it matter the debt to gdp ratio . Thanos i think it will matter, but not right now. Right now dealing with the crisis, avoiding a breakdown of society and the social infrastructure, which it could easily do. We saw the euro zone crisis. To seeot want repetitions of Economic Crises moving into a social crisis. Is this a problem . It will be longerterm. Not inflation in 2021, but beyond that, it will be stickier rather than transitory. Something the u. S. Can do, but not other countries. Certainly not emerging markets. Anna talking of things that you think matter now or later, or later but not now, what about avoidructural reasons to the u. S. Dollar . Will that matter in the future, but right now it is risk aversion means we see money go into the dollar short term . U. S. S no, we are negative dollar. We were positive until last december. We turned negative in march. This is because of the valuations, partly because we see a reflationary story coming through. Is why we are positive , positivesitive china a number of emergingmarket currencies because we see the stimulus will help growth. In terms of volatility, there may be temporary volatility around elections, especially if either candidate does not concede defeat the risk is for President Trump not to concede defeat. Then the uncertainty extends into december or january. We do see a temporary spike in volatility, but that is temporary rather than strategic. Anna any pushup in the dollar you would also see as temporary. We will talk more to Thanos Papasavvas in a moment. Berlin cracks down on nightlife spike. Pe faces a virus we discussed that, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 40 minutes until the start of cash equity trading. Ftse futures very little change right now. Bit. Nd cac futures down a vernon nightlife will end early starting saturday. The german capital joins paris and madrid in cracking down after hours activity. A recent wave of partying has fueled some of germanys highest rates of covid19 as four districts of the capital are high risk zones, including the one i live. Bars, restaurants and other businesses will have to close by 11 00 p. M. Those restrictions come in on october 10. Thanos papasavvas from cio stillr, abp invest is with us. I have been relatively proud of the germans for keeping covid under wraps to some extent relative to the u. K. And the u. S. , but it is getting out of hand here. Is that a concern for markets . Thanos i dont believe so. I believe partly because of the demographic and germany and where it is impacting it the Younger Generation in berlin, which can be contained is one area. The second area of the local National Health service, can deal very easily with the crisis. Even in april and may, the weres of i see yocu units only at 20 usage. I do not think it will have a dramatic impact. I do not believe it will have an impact in terms of the elections next year. I think the parties are unlikely to play around with covid discussions. Especially with continuing stimulus as much as required. It will keep relatively contained any potential unrest. Anna you are positive on the dax and the euro, is that because you are a believer in the fiscal delivery in europe . Thanos it is more than that, not just cyclical issues, which i agree with, but the structural issues. Is aboutant to say it time, but unfortunately the eu is facing a reality that it has to stand on its own two feet. The u. S. Is moving apart, not just because of trump, but under biden i doubt the u. S. Will deal with things internationally that they have in the past. Biden will focus internally in the u. S. If they take the oval office. The eu has to deal with itself. Economically, a little more in terms of a process. We saw that with the euro recovery fund, a successful turnaround, and i think it needs to get its act together. This will be a positive structural story for europe. And the globalization receding that we are seeing will benefit Eastern European regions such as serbia, croatia, as well as poland and hungary. I believe europe will benefit from the structural changes taking place, and the eu in particular. Matt is europe a more interesting investment prospect . Wins, does if biden that mean more freetrade and fewer tariffs . Thanos i believe under a different u. S. Administration, the tone will certainly differ. But im not sure if the messaging will be changing. Not only for the eu but also china. What trump has been talking about in terms of nato and the 2 , these are issues democrats and republicans agree with. There are issues between the eu and u. S. Which will have an impact. The other issue for democrats is potential uncertainty in terms of Silicon Valley and the tech sector, and how that will impact relations across the regions. Matt Thanos Papasavvas, cio founder, abp invest, great to get your insight this morning as the volatility looks like it could go either way. Up next, one of the main reasons trump pulls the plug on stimulus. He tells representatives to stop negotiating hours after the fed made their strongest call yet for higher spending. This is bloomberg. Are less than a month away. With voting having started in a lot of states, youre sitting there looking at an economy that was doing reasonably well up until march. Then the virus impact really took hold and it is not doing so well now. President trump gets better marks than joe biden on the economy, the but biden gets better marks in terms of handling the virus. Is seenxtent the virus as not in control and weighing on the economy, that is bad for the president. Mike pence has been the head of the virus task force. There has been widespread reports about the various rifts in that task force, how much trump listens to dr. Fauci. Andsure that will come up be pressed. Guyhe same time, pence is a who does not distance himself from the president at all ever. He has been a loyal foot soldier. Ence is expect p anticipating these questions, and i would expect him to come ready to defend it. Matt thank you very much for joining us. Senior editor Derek Wallbank talking about the u. S. Clinical situation. Germany, it is said Boris Johnson will have to take the internal market bill off the table if he wants to do a deal with the eu. The head of the bundestag spoke , and aboutg chancellor merkels legacy. Of course this will be the end of a long period in which the chancellor has shaped and strengthened the reputation of germany as an honest dealmaker. Has strengthened the trust in engagement. Ity and but this is democracy. Governments change. New people come into responsibility and power. I think we have evolved to be a mature democracy. New people will follow. We have experienced the style and success of angela merkel. There are new challenges ahead of us. I am convinced we will see big aid andes, shifts in ongoing reveling of order and uncertainty we have forward which will last in the future. New people will face new challenges. I think the world and our friends can trust that we will follow a reliable engaged, responsible path in foreign relations. If this remains the british position, that the Brexit Agreement is not the basis for our future negotiations and relationships, then we have to face the bitter reality that we obviously and unfortunately for the moment cannot trust on the eliability of the words britain has given to the european union. He always had no doubt that the rule of law was and has been a cornerstone of British Foreign expected ascould be a basic element of our future relationship. If we were to see disappointment of our trust in britain materializes, then of course i basis of both trust and the treaty for future relationships and a future deal has been put in question by britain. We would have to realize this new reality. Bundestag was the Foreign Affairs committee chair. An exclusive interview with bloomberg. Joining us is bloombergs German Government reporter who conducted the interview. He is one of the three candidates to succeed merkel, maybe four. What is the latest in the cdu leadership race . I would say it is really , thear who will win decision will be december 4. , roettgeny convention , who you just saw is the wildcard in this race. The front runners are currently blocking each other. They come from different political camps. Who knows . Be the surprise winner in this race. Everything is possible at this stage, which is unusual for the christian democratic party, which used to be a addictive used to be ang predictable and boring party. Anna what about the other political news out of berlin . The eu is preparing to retaliate against russia over the poisoning of alexey navalny. And berlins appetite to bring nord stream 2 . One thing is clear, there will have to be consequences. Roleny put itself into the that it has to do something. Merkel has been outspoken on the subject. Traveling is it will be. Ans for russian officials the decision will be made by the european union, but germany has an important say there. When it comes to the nord stream merkel. Oks unlikely the project, because her own constituency would be affected. Matt thank you so much for joining us. Germany government reporter, are ne delfs. Berlin cracks down on nightlife, following paris and madrid as europe faces a virus spike. We discussed, next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 15 minutes to go until cash equity trading, some upside on ftse futures. Other futures recovering a little. U. S. Futures despite the cancellation of stimulus talks in the short term in the u. S. , u. S. Futures point to the upside as well. Lets go to the Bloomberg Business flash. Laura microsoft and wells fargo have pledged to double the ranks of black leaders. Microsoft and wells fargo say they are confident diversity pledges are legal. Facebook is banning all group pages and instagram accounts linked to the qanon conspiracy. Postsdual accounts and related to qanon are still allowed. Of the Conspiracy Theory believe President Trump is fighting child molesters. Electric carmaker, tesla, is targeting high production and avoiding to hoping to avoid a supply crunch. Andinal agreement reached, talks are held up on pricing. That is your Bloomberg Business flash. To your morning call. Juliette saly joins us from singapore. We are adjusting all over the place from what we heard from President Trump last night. You are looking at the responses, and despite , theility in bond markets steepened drivers remain. Why are they convinced we will see a steeper yield curve . Juliette we know President Trumps tweets put those reflationary bids on their head and cut short the move we had seen in the bond market, and a lot of volatility. There are a lot of reasons you could see a steeper yield curve, they are saying the treasury Market Reaction to the abrupt halt to stimulus talks is understated, and there are expectations of a biden victory. Looking at an average entry point and saying it could be a big deal in the event virus cases rise further. You could see a further steepening of the yield curve on that too. Matt you have other calls on gold, still in play mid election turmoil. Juliette we have been talking about these calls, that there and be a blue sweep, election moves but analysts say do not rule out that there could be turmoil. There is still a long way ahead, and gold should be in play, having its best week since early august here. Investors sang a lot can happen between now and the election. Citigroup says Precious Metals markets could be under appreciating risks surrounding the election. And Global Wealth management suggested you should buy gold in fooledsays, we have been by the polls before, so look at having gold in your portfolio. Anna thank, Juliette Saly with the morning call. We see the start of the European Equity trading session in 14 minutes. Joining pariss and madrid in cracking down on after hours activities. A recent wave of partying has helped fuel germanys highest rates of covid19 infection. Joining us is director of research and bloomberg intelligence. So much to talk about around this. Number one, it does not start until saturday, which would make me think everyone will get covid friday night. What is the deal calling bars off at 11 00 . Dont people just go out earlier . It, imyou think about not sure the folks of spain and miss their likely to bar evening at 6 00 to make sure they get five hours in the bar. Nightlifeis is about and the feel of nightlife, but the unfortunate thing, people are fatigued with the whole thing not that i am endorsing it but it drives them to get together. Is, you canthinking never have that many people at home as you would in a bar that is closed and people are mainly close by. I am 100 sure that is the aim of the restrictions. Anna meanwhile, what is the latest on the race for a covid19 vaccine . We have heard from Market Participants about their assumptions, and one said they were talking about q3 of next year for mass distribution in the u. S. But within the medical community, what is the latest on the vaccine . Was aast night there three hour symposium put together by john hopkins and the university of washington. At it there were Vaccine Developers and the warp speed leader and ahead of the fda talking. And on distribution, the broad is to be should will be very challenging. I think q3 next year would be good for broad vaccinations. Tightenedhe rules are for approvals, which means we are more likely to hear about possible approval in novemberdecember this year. Anna thank you very much, sam fazeli. Around 10 minutes until the start of European Equity trades. Coming up later, a new study says funds deliver outperformance, but not as smart as you might think. We will bring you that story. Up next, we will get stocks to watch, including tesco. Missing estimates just a touch. News on a new cfo as well. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are eight minutes to go until the start of cash trading. We see a mixed picture in term of equity index futures, but not a lot of direction from the zero level. I want to point out one day after turkey returns to debt market to 2. 5 billion dollar bond sale, the currency hits another record low versus the dollar. It is nearly at 8 now. 4 two theoking at 7. 6 turkish dollar. If you take a bigger look at this picture, you see the trend continuing to hit record low after record low after record low. Gets go to dani burger and stock stories to watch, and we will start with tesco. Tesco first half sales is a miss. , theood news for tesco expansive move to online, sales have more than doubled. The issue when it comes to moving online is the costs associated with distributing various products for the new channels. Profits are not as high as they would be. Tesco forecasting the sales and profit operating for this year to be in line with that of last year. From what is the latest the travel sector . Dani the travel sector has been under pressure, and they are announcing their cfo is leaving at the end of this year, and stepping in her place is a member of the executive board. There is another new executive board member being announced. When there is a change of the cfo level, it reflects bigger turmoil. Sometimes they can do a little to appease shareholders, or have the adverse effect of how much trouble they are in. Aboutfinally, lets talk using everything at their disposal to fend off a takeover . Dani the saga never seems to end. Suez is in a tough situation trying to fight the takeover. The suez chairman was asked to restart talks. Or three months of discussion can reach a deal according to veolia. They believe in a merger can take place between the companies. Anna thank you dani burger with your stocks to watch. The french utility story keeps giving. Lets take you up to the open with a quick reminder where we are on european futures, looking mixed and slight downward on ftse futures. U. S. Futures positive around 0. 4 on the major indexes. The open is next. This is bloomberg. Anna a minute to go until the start of cash equity trading this wednesday morning. Here are your headlines. President trump calls off stimulus talks hours after jay powell makes his strongest plea yet. The ecb urges more stimulus. Lane saysomist philip it would be prudent to add stimulus. Plus, every little helps. Hit from the Coronavirus Crisis response, but the bill was offset. Matt . Matt take a look at futures here. Struggling to find some direction with ftse futures up 0. 1 . Euro stocks futures down. So, it looks like the continent could be a little bit worse off, but lets take a look at the live cash trade on the gmm screen, the global macro movers screen, and see how things shake out at the open. Straight off the bat, the ftse is down. The ibex in madrid is down zero point 3 . The ftse bouncing just above the zero level. 0. 1 percent. Little change on the london benchmark index. Dax and the see the other continental indexes come out very little changed. You see the dax trading live at the bottom hand column. 0. 01 . Not a lot of movement in term of the indexes. Here in germany but a little bit south of where i am in unit, bmw is out with thirdquarter sales up a 6 . Thirdquarter china sales up 31 . Thirdquarter electric vehicle sales are up 47 . There are some gains. Overall sales up 8. 6 . It looks like bmw is having a successful thirdquarter with a 675,680crease of vehicles in the period. Asixed trade right now investors weigh the impact of President Trumps decision to call off stimulus talks until the election. Joining us now is our guest. Of course, fairly striking yesterday, Jerome Powell calling for more stimulus and then Christine Lagarde saying if we dont get it in europe, there will be a cliff effect. Do all governments, after having spent trillions of dollars, still need more cash injections . The problem is the way central bankers see it is there is a huge difference about potential. D economic the risk is if we dont get back to prepandemic levels fast, you will have underlying damage to economies, which well hobble them in the future. So, it is absolutely critical that through the next few months when it is likely that the virus risk will start to rise around the world, certainly in the northern hemisphere, that governments will have to provide this support and markets see this the same way Central Banks do. We will have to worry about the consequences of the higher debt in the future, but the fiscally prudent thing to do in the near term is to make sure the credit and cash flows for those areas that need it badly. Anna how do you persuade those who have been saving money to spend it . Aggregate, the u. S. Is saving, many western economies surging. That will not be the case for everybody. Depending on which part of the economy you are operating in, this certainly wont be indicative of your experience, but if money being given out is being saved, what does that mean for the style of fiscal stimulus that would be most effective . Kallum that is a good question. It is absolutely true and it is the case for any recession that the impacts are in even across parts of the economy. What we saw during the lockdowns and helped a lot by the generous fiscal transfers in the u. S. Is as a rising not precautionary savings, but involuntary savings meaning that because shops and restaurants were closed, households were not able to spend their cash in the way they normally would, so there was an in all and terrys bike in savings. Going forward, you would hope that the involuntary saving comes down and that spurs on the recovery. The risk is if households start to worry about the future, that involuntary saving will turn into discretionary saving, so fiscal policy needs to tease that cash out of household hands into the real economy. You do that through tax incentives, tax breaks on consumption, you may want to stimulate the housing market. It is not necessary for the tax incentiveshe are much more important because the private sector already has some cash flushing ground. You rate the do stimulus efforts so far . Is there one government or region that has done it right . Or do you have an idea of how it could be done better . Kallum governments have treated what was the core of the economic problem extremely well. , firms of the lockdowns were feeling a very severe cash flow crunch and in a creditbased economy, the cash flow crunch can soon become a credit crunch. Governments have managed to intercept that risk and we have enough cash and credit in and around the economy. What we need to do from a fiscal policy point of view is try to support the economic recovery. That is not about making sure that Balance Sheets are sufficiently cash liquid, it is about getting some spending. The government side needs to be investment driven. The u. S. Fiscal stimulus looks pretty good. In europe, we have more jobs oriented fiscal stimulus. What matters is that very quickly in 2021 the europeans start to create job and spend on Public Investment and the u. S. Does the same. By and large, western governments have done a good job with fiscal policy. What we need to avoid is making fiscal policy a political foot all and get the money into the economy. Anna it does seem to be very political in every part of the world, doesnt it . Let me ask about inflation. For many people, inflation concerns are not very near term, but they do have longerterm inflation concerns. We are putting up the latest breakevens, which suggest a little downward move most recently. What are your expectations around inflation . , weum on a twoyear view will see a disinflationary shock play out. Normal dynamics, a drop in demand, bringing down price pressures. Of course, the policies are inflationary because in absence of those policies we would have a deflationary shock. Fiscal much more activism then before. That is likely to persist. The Global Economy is less dynamic, in shoring as a result of the virus and the pandemic. This makes for a more inflationary environment. Areong as independent banks independent, you should be asking the question whether we more likely to go to below 2 . We have been a bit higher in the u. S. In the future, i feel we are going to be much more in the 2 or 3 range. That is probably 35 years from now. Central banks will buy in large encourage that scenario. But the idea that inflation could really take off is a remote prospect. Peoplehe things that need, those prices are actually rising. Milk prices are up and consumers complain, for the most part, that their Grocery Store bills are higher. At the end of the day aside from rent and in america, gas, food is all you need. Kallum what i would emphasize here and i probably sound a bit too much like an economist, that is a relative price issue in the sense that certain parts of the economy are experiencing rising prices, others are experiencing deflation. But we are talking about the general price level and the general price level, what we see in the data is that disinflationary trends emerge. The concerns are offsetting sectors where you may see prices rising. Matt absolutely, but you cant eat your ipad, as someone once told ben bernanke. Stays with us. G coming up, from rescue to recovery. Central banks standing by with extra measures if needed to support an economic rebound, but will it be enough without the fiscal help we have been talking about . This is bloomberg. A severe global gdp contraction in 2020. The picture today is less dire. Gone moreovery has quickly than expected. 20 22will be back late in 2022. It is still far from complete. I would argue that the risks of policy intervention are still asymmetric. It is important to recognize that fiscal policy will play an Important Role in Monetary Policy. This recovery is still uneven. The burdens of the downturn have not been evenly shared. To project antinue painful and uneven recovery. The outlook remains highly uncertain, and part because it depends on controlling the spread and effects of the virus. It contraction. For the first time in 60 years. A glimpse of some of the Central Bank Commentary we have heard of late. Them all talking about the Global Economy there. President trump has ended negotiations on a new fiscal stimulus package, ignoring the strongest appeal from Jerome Powell, warning the u. S. Economy will suffer tragic consequences governmentficient aid. Ecb president Christine Lagarde and chief economist philip lane are urging further monetary and fiscal stimulus as the euro zone struggles to sustain its economic recovery. Fiscal andbetween monetary rages on. Kallum pickering is still with us. I want to ask you about the drivers of the European Growth story at the moment. You have interesting thoughts around productivity. How much do you think the failure to drive better productivity before this pandemic was something that many economists spent a lot of time thinking about . Has the pandemic driven us to being more productive . Is there some silverlining . Kallum it is an interesting question. It is difficult to look at the Economic Data and draw strong conclusions because we are so far below potential, but there is pretty good evidence to say that the reason we have had low not because the frontier of potential productivity had slowed down the rate of innovation have been pretty good, but major parts of the economy were not keeping up with the rate at which that innovative frontier was being pushed out. If you look at the gap between the best in class Silicon Valley and the rest of the economy, it is night and day. You had very unbalanced sectors and the rest of the economy looking quite primitive from the capital point of view. The pandemic has forced us to adjust to a very different working environment. Ingrained habits have not been changed. Data,vices, big manufacturing, firms are looking to shorten supply chains to present prevent against future disruptions. They will need to invest in robots and 3d printers. A lot of this very advanced technologies is now going to be used rapidly in the economy, so what we would likely see is once we return to prepandemic levels see ourwe will underlying productivity has improved because of this rapid diffusion of technology. Matt yes, i think i see a more basic example of firms not using the technologies available when i look at the german auto industry. You know, they had perfected these internal combustion engines, three liters six cylinder diesel, twin turbo four liter v8 and they were just sticking to what they had down thesetly and not adapting new electric motor technologies. Is that kind of switch going to be a real problem for the economy . We continue to hear about layoffs, you dont need as many people to build electric motors. These are company that employed 300,000 people, 400,000 people. Kallum that is a very good question. One thing that you typically notice is one major disruptions happen, even these positive disruptions, so you think about any previous Industrial Revolution, and a lot of emphasis is on the cost. Which sectors of the economy are being hurt by the transformation. Seen inoment, it is parts of the Manufacturing Industry that will suffer job losses. This kind of process from a policy point of view is a bit of a danger if it happens during the crisis and we are still in a crisis, so policymakers will probably delay this and they will do it through generous credit provisions to the firms being most hurt by this shift, but in time, we will see the shakeup happen and i would just emphasize that we often think about labor displacement and permanently higher unemployment when it comes to a shift toward more capitalintensive production. I think this is an argument which is massively overplayed. A save faceof argument. But over time economies that are more productive and capitalintensive have higher demand for labor, so in any previous Industrial Revolution where we have had massive unemployment as a result of these shifts, we typically get a recovery where those unemployed workers are brought back into the economy, more productive sectors and in generally higher wages. Matt another thing being talked about in order to deal with this kind of shift now and it may be too macro or a little bit left field for a market open show, but universal basic income or a basic income guarantee. I wonder what your thoughts are on that as a patch . Kallum there are some good arguments for it. What i would prefer actually is the market mechanism to play out in the economy and shift to from these industries which are going to be harmed into new industries and instead of broadbased support for everyone in the economy, it is much better that you use targeted measures to help people that need it alongside measures that speed up the employment recovery. Im not in favor of the universal basic income if it is an option very heavy support for those that are facing the most acute costs from the transformation. Anna we had a really interesting conversation with our colleague from Bloomberg Opinion it is worth looking at. , thank you very much. We will continue our conversation with Kallum Pickering at 9 00 a. M. U. K. Time on bloomberg radio. 20 minutes into the european trading session. Coming up later, a new study that says farms to deliver outperformance, but they are not quite as smart as you think. Inwill bring you that story etf iq. Next, retail and big tech. This is bloomberg. Welcome back to Bloomberg Markets, this is the european open. 22 minutes into the session and we are looking at slight green arrows. On the ftse, the dax, and the cac. Lets wrap up some of the top corporate stories for you. A house panel has proposed farreaching antitrust reforms to curb the power of u. S. Technology giants. Following a 16 month investigation, new findings target four of the biggest Tech Companies. Amazon, google, facebook, and apple. Joining us to discuss is dani burger. Just how dramatic where the proposals from this house subcommittee . Dani matt, i dont think it is unfair to say that this was the most dramatic perhaps an decade. The findings says that these Tech Companies are the gatekeepers of the Digital Economy and they are using their control to decide the winners and losers, which means less competition and less choice for consumers. They are saying these companies are once scrappy, but they have become monopolies we saw in the era of oil barons and railroad tycoons. Suggest making mergers and acquisitions default anticompetitive unless they can prove it does serve the public interest, making it so they cannot compete with companies that were like another platforms , and making it easier for consumers to move data from platform to platform. Nasdaq futures pointing higher for much of the morning. As jeffrey haley, a market strategist, told me this morning, he thinks there is so much concentration on the white house and people simply dont believe that these reforms and proposals wont go through, so they havent really changed their pricing. Election closer to the , look for negativity to be priced into these shares. Anna it will be interesting to see the days in which the nasdaq responds. Shares jumping on tesco after the Company Reported a surge in online sales. Structuraleal set of shift. You wonder how longlasting it will be, all the working from the increasedfore demand from supermarkets. Still has toesco compete. Earlier this year, tesco took ricardo out of the basket of companies that they compare to. Really doing well in these earnings, but not totally hitting the estimates for sales because of the surge in online sales. The costsfor them are that are racking up. Things like providing Hand Sanitizer in stores, providing more people to keep up with the demand. There is this push and pull, but at the end of the day, shares rising because tesco was able to reinstate their special dividend and that is what shareholders really want to see. It shows them tesco is on the right track. Thanks veryght, much. Dani burger talking about some of the biggest corporate stories in the market today. Trump pulls the plug on stimulus. He tells representatives to stop negotiating hours after the feds strongest call for higher spending it. We will look at how that has hit the market. And what we now can expect to come. Remember, the election in just one month. This is bloomberg. Anna welcome back to the European Market open. European equity markets making modest gains. Of a futurese face market that had suggested some weakness. U. S. Futures making increasing levels of gains. Mastech futures and keeping with the rest. Lets get a bloomberg first word news update. The European Central bank signaling the need for extra monetary and fiscal stimulus. Christine lagarde said her greatest fear is a cliff effect in which fiscal eight is withdrawn too soon. Philip lane says it could be prudent to add support. Berlin is the latest european city to crackdown on its nightlife. German capital will prohibit outdoor gatherings and close bars and restaurants up 11 00 p. M. The new rules go on saturday and will stay until the end of the month. Infections are emerging in the white house, including one of the president possum military aides and one of his valets. Joe biden says they should scrap the next president ial debate if donald trump is still infected with coronavirus. Eddie van halen has died at the age of 65. Securedcal innovation his eponymous band is one of the bestselling acts of all time. Rolling stone put him at number eight in its list of the top 100 guitarists. 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 i actually saw you know the video that laura just showed , with all of the members of the original lineup standing together i actually saw that tour. My brother took me to camden, new jersey, to see that tour in 2015. I grew up with van halen from the earliest age are remembered. Their first album came out a 1978, that was right about when i realized what a radio was and Eddie Van Halen will definitely be missed. Anna somebody clearly who made an impact on you and certainly for guitar aficionados globally. Donald trump has pulled the plug is on stimulus talks hours after Jerome Powells strongest calls yet for spending. He told representatives to start negotiating and would instead pass a bill after the election. Joining us now is our balance editor. What does this mean for the chances of a second round of stimulus . All analysts have said they saw some kind of stimulus coming. But the timing was very uncertain. I guess this pushes the timing out slightly . Absolutely. There had been some promising signs over the last several days that perhaps Stephen Mnuchin and nancy pelosi were making progress, but it still seemed like a heavy lift and i think trump has essentially put a fork in the whole process until after november 3. I think that from a political standpoint, that is very risky for him. It has left his own allies scratching their heads because he gets pretty good marks when it comes to the economy, but this opens them up to charges he is not pushing hard enough to get a bit of a shop in the arm for the u. S. Economy ahead of the election. What do we expect from tonights debate . Mike pence, who has been in charge of the Covid Task Force and Kamala Harris . It is going to be very interesting to see the dynamic. Democrats were very excited when harris was added to the ticket. She is seen as having a broader appeal with minority voters, with the liberal wing of the party potentially, so i think the people on the democratic her comeexcited to see out. She is going to have to live up to expectations tonight. This is obviously also happening against the back trump backdrop of trump covid diagnosis. There will be changes put in place. They will be separated by some plexiglas because of the diagnosis. I think that is also adding an element of drama and intrigue to tonights debate. Usually, the Vice President ial debate is that of the last watched, less followed of the debates, but i think this year is going to be the exception to that. Anna thanks very much for joining us, Kathleen Hunter to talk u. S. Politics. Up next, we turn to u. K. Politics. Will Boris Johnsons plans be enough to hit the net zero Carbon Market . This is bloomberg. Back to thee European Market open. 30 minutes into a trading session that shows modest gains. Lets get a Bloomberg Business flash. Confusion over the plan. The ceo said the company would raise 1. 5 billion euros through an asset sale. But the company clarified the Capital Increase would be below one billion euros. A house panel proposing farreaching antitrust reforms. The recommendations are the most dramatic proposals in decades and if approved by congress, that could lead to the breakup of Tech Companies. The proposal has been mostly rejected by republicans. Tesla is in talks on bhp for a. Ickel supply they are targeting higher production and hoping to avoid the supply crunch. Nickel is a key component to the ev battery. New supply agreements have been talks, but held up on pricing. That is the Bloomberg Business flash. Anna thanks very much, laura wright in london. The u. K. Prime minister has pledged a green revolution with 100 60 Million Pounds of Infrastructure Spending to support companies building turbines off the british coast, that is wind power of course. Seven years ago, Boris Johnson favored nuclear energy. Since then, the price of atomic plants have surged, but the cost of turbines that work offshore have plunged. Ofwill require 58 billion investment and careful management of multiple projects in some of the worlds choppy us waters, but it will be key in guiding britain to its climate goal of zeroing out Carbon Pollution by 2050. Lets get thoughts around sustainable investing. From Morgan Stanley and joins us now. Ministerfrom prime Boris Johnson talking about wanting to create green collar jobs. Absolutely. It is important to put some steppingstones in place. Makesdays announcement clear minded attempts to that commitment. But it is probably not going to be sufficient. You also need other technologies as well, such as electric vehicles, potentially hydrogen, carbon storage. I think often there is tension between the environmental side and the sustainability side. What we see across europe with the Green Recovery is that you could end up with this winwin situation where you do get the transition toward a low Carbon Economy and at the same time, you are also helping to create new jobs. Got to ask about wind power and solar power. A lot of us have just got done watching this bill gates documentary on netflix where he makes the point that he simply cannot store enough power from those two forms of renewables. He thinks Clean Nuclear is the only way to go. Is that a controversial opinion . Nuclear is clearly a technology that creates a lot of debate. It is carbon free, but there are other challenges with nuclear. Exciting is that as Storage Technology continues to develop, the cough cost of storage is reducing and new technologies like hydrogen, if they can become more costeffective, they can become a really important part of the aergy mix and help facilitate higher percentage of renewable delivery. Anna when you look at the commitments from Big Oil Companies or what would have been called Big Oil Companies, now we call them big energy may be. When we look at the commitment to around scope three emissions, how close are we getting to a situation where they take very seriously scope three emission targets and we have reliable data on which to measure the difference they are making on that front . We are talking about big oil in general. Years, the last few there has been a huge amount of progress with the oil and gas sector coming out with clear reducingabout emissions, scope three, as well as direct emissions. We now need to see over the coming years is the progress being made. In alling to invest types of new energy, renewables, but also some of those other technologies that ive mentioned. You made a really interesting point about the data and measuring emissions. There are 15 different categories of scope three emissions. Companies across all sectors having more consistent data on scope three emissions is going to be really important to be able to really assess which countries are making companies are making that progress. Matt i want to ask, we focus so much on the e and so much not quite as much on the s and hardly at all on the g. Lng, the biggest money manager in britain, has recently set it will vote against boards that lack racial diversity. Do you think there needs to be more focused on the s and g . It is an interesting point. If you look at where they have really impacted asset prices, the biggest amount of evidence is on the environmental side, but we definitely see the social onment becoming much more the radar screen of investors we speak to. Pandemic,ll, the there has been a huge amount of how they are treating stakeholders. Not just stakeholders, but their employees, their clients, their customers, and many assessing how the culture of the company and the inclusion can really benefit a company in terms of being an employer of choice, but also having supply chains, for example. The alert other element is the diversity side. Diversity has always been a proxy for diversity and inclusion. Available,the data we have only been able to look at gender. Year, the increase on race and ethnicity is a multiyear process to increase that level of focus on this issue. Again, the data is really assessing what companies are doing. Matt thanks so much for your time. Now, lets get back to the topic of Green Investment in the face of covid19 and climate change. Cities are turning to smart infrastructure and mobility to make urban centers more green and resilient. Walter is now leading the of the revolutionary hyperloop Transportation System. He joined Bloomberg New Economy Forum via a Virtual Panel Building Back green or. We are kidding ourselves if we think the answer to the situation that we are in right now is just going back and getting back to all of the things that we were doing before. We have a tremendous need to be able to have new forms of transportation. I think the discussion about the new plains is a part of that. But it does across all spectrum in being able to do this. Thatact of the matter is we have 21st century problems today. We want to be able to have a Transportation System that works for us in the way that we wanted to be. We wanted to be not just fast, we wanted to be in demand, we wanted to be the way that we live our lives. We wanted to reflect our values. Is a very bigt part of the values we have today, so having technology for technologys sake is not the point. It is reshaping the thinking to allow Mass Transportation in a way that fits with the needs that we have. Is torthand for this imagine, as you point out, connect cities like metro stops. What would that mean . All of a sudden moving beyond the question of sprawl and redefining urban environment and connecting urban environments and thinking about how we have mobility across urban environments. ,he things that matter to us labor, culture, health care, etc. It is no longer about having disconnected places, it is about having places that feel they are the same environment. This is groundbreaking for us. If this works out to you if this works out for you, you were going to put airlines out of business on the shorter half at least. How greener you compared with the airlines . In total, we will be about 1 10 the emissions. It certainly fits in fitting with our vision of what we want to do in regard to the environment. Look, i dont think shorthaul flights are in the long term of airlines. I think what airlines are invested in for a shorthaul flight is to be able to connect people to hubs for longer haul flights. The idea that we are reimagining how different parts of the transportation paradigm are served should not surprise anybody. There is nothing wrong with that thinking about that. Do you also replace a guzzling cars and trucks . Absolutely. Here is one of my favorite stories. I stood in columbus, ohio, and i asked people in columbus, ohio, i said, how far is it from here to pittsburgh, pennsylvania . And everybody gave me the same answer. They said it was three hours. Look, im a kid from queens. What do i know about how far it is . I said, you are wrong. They were surprised and i said, the correct answer to that question is that it is 185 miles. Pittsburgh and columbus will always be 185 miles apart, but what you did was you translated distance to time on the basis of 1956 technology, that is cultic interstate highway system. Called the interstate highway system. Miles,ook, that is 185 but it is 25 minutes. When you begin to say that is the amount of time, when it goes when you want to go so you avoid the tyranny of train schedule. When it goes to the city center. And when you have connective links to be able to get to the places you want to go, i would not get in a car, would you . Anna very interesting conversation. Speakingperloop ceo with the editorial director for Bloomberg New economy, certainly sitting here in a city where some of the cities seem busier during a pandemic than ever. How far will the s p 500 fall without stimulus . That is our question of the day. We will speak about that next. This is bloomberg. Matt welcome back to the european open. We are 53 minutes into the trading session, still have almost no movement in terms of the indices. All in unchanged. Lets get to our mliv emerging markets strategist to talk about what is going on in these markets. I would have thought that we would have more movement, considering the trump move to stop stimulus talks yesterday. Indeed, your question of the day thehe blog is how far will s p 500 fall without stimulus . What are you hearing . Think the answer is not very much. Pretty quick to dismiss what trump said as kind of just a negotiation tactic. , if the market does fall a lot, then trump will be forced to recant. Itrdly and finally, they say does not really matter that much because either party who want to push stimulus once the election is up. Tactic on a delay something that never happens. Marketswas the emerging universe preparing for the election . Are they preparing for a definite outcome . That is definitely part of it. A definite outcome would significantly reduce uncertainty. Also emerging markets have been enjoying the increase in profitability of a biden presidency. There are a couple of things that these guys think they will benefit from. All, a larger u. S. Fiscal stimulus under biden will lead to higher u. S. Growth. In addition, people are expecting more significant spillovers because under biden, there is a diminished risk of global trade. Thirdly and finally, because of bidens attitude toward china being more conciliatory, most asian currencies have pretty tight relationships with renminbi. Emerging markets have been feeling pretty sanguine over the last few days. Thanksll right, simon, very much for joining us. That does that for the program. Anna and i are headed over to radio. Tune in on london dab digital. Francine President Trump calls of stimulus talks. He says there will be no action until after the election. U. S. Legislators propose sweeping antitrust reforms on alphabet and amazon. Harris and kamala mike pence faceoff. We will bring you the very latest

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