Transcripts For BLOOMBERG Bloomberg Markets European Close 2

BLOOMBERG Bloomberg Markets European Close July 13, 2024

For testing capacity, supply chain capacity, and projection of shortages . Thank you for that question and statement, senator murray. Yes, we continue to have a work in progress as we build the testing capacity. We have established the targets with the states of over 12 million tests over the next four weeks. We think those targets are going to be good in may and june, but as dr. Fauci said, we really have to be evidencebased. We expect those targets to go up as we purposively open, as communities goes through phase one and into phase two, and certainly those numbers will need to go up significantly again in the fall when we potentially have influenza circulating with covid. So yes, there will be targets. The targets will need to change based on the evidence that we see. But we are highly committed to securing the supply chain. We have worked daily with every manufacturer, and i am just pleased that we are, and may and june, able to get ahead of the states so we can supply them what they need so they have the assurance that there are not going to be any doubts about that. Sen. Murray when you put out that specific plan you are required to do, we will see numbers that you tell us we are going to reach . Vonnie you have been listening to top u. S. Health officials testifying before the Senate Health committee. The u. S. Is now in phase one of the Clinical Trial for one vaccine. They also mentioned Gileads Remdesivir trial was a modest success. That continues. If you want to follow it, go to. To live andet to develop develop its over the last hour. Uber looking at a deal now to acquire grubhub. Chicago, valued at about 4. 5 billion. The other interesting thing that happened in the last few minutes is the battle for china coffee is heating up. Coffee has fired its cfo and ceo and is trying to bring in a whole new csuite. This comes on the heels of tencent investing in unspecified amount in an outfit run by Restaurant Brands international. It is interesting because tim hortons is trying to expand across the country. It wants 1500 outlets from roughly 50 right now. This after we learned that bill ackman has a nearly 10 stake in Restaurant Brands international. That. T is now backing luckin now trying to write the right the ship. Even after poorer inflation data then we were expecting, the tenure really going nowhere at 70 basis points. Guy the fed basically pulling all the levers. I am not sure that yields in the bond market and inflation really have much to do with each other anymore. Lets take a look at where we are for the stoxx 600 near for the stoxx 600 in europe. We are up 0. 2 . Big story today out of the u. K. In terms of the government going back to his indicated markets. That is worth paying attention to. Stride be talking to mel of the Treasury Select Committee later on. We have seen a turnaround in italian btps. 1. 88 on the ptp market the btp market. Lets go to italy now. Lamborghini has resumed making cars at its facility in northern italy after temporarily suspending normal course, todue, of the coronavirus pandemic. Some parts of the factory were repurposed to make medical equipment. We are joined by stefano domenicali, the ceo. Thank you very much for joining us on bloomberg today. The factory, i understand, is back up and running. Im curious, to what extent is the factory open, and at what capacity are you operating . How is it working giving the social distancing rules i am sure you have had to put in place . All, it well, first of has been a [indiscernible] or plastic protection or devices. In the meantime, before we as you canweek imagine, it is not easy because we had to respect social distancing, mask and protection, gloves, creating plexiglass. After the first of the week, we are very happy because we are at more than 70 of capacity. We will have 100 already next week. We are very proud to be back to work. Keeping people safe is a priority for us. We are ready to go back to the business with our cars. Guy lets talk a little bit about what demand is likely to look like. We are clearly likely to see limited demand in europe and probably north america for a little while. China is starting to reopen, and this is a key market for lamborghini. What are you seeing their . What signals are you getting from the Chinese Market that we could maybe extrapolate around the world . Stefano i think there is one thing we need to consider. First of all, as you were saying, we are 95 export, so production goes around the world. China is growing rapidly. That isrtant factor very good, we did not receive any cancellation of orders. I can say that the great majority of our customers, if there is not a problem of liquidity. The problem is the environment in which you purchase a luxury good like a car. , fori can see today , thele, and south korea requests in the month have been very strong. [indiscernible] that is why it is fundamental to understand how the market will evolve. I believe after the first months , it is not a problem of being liquid. Understand how we can be flexible, to foresee demand next year in order to plan. Now that thent market will react in the right way. This week [indiscernible] hope to make that a physical reality. Stefano, when do you anticipate italy will be out of recession and numbers will go up again . What do you forecast for sales of lamborghinis . Stefano i think no one has a crystal ball here. I think we need to be prudent. Italy is clearly suffering a lot at this moment. Going know, the gdp is 10 , even more. Montheve that the first will be very difficult. That the systems put in place can relaunch all of the sectors and start up as soon as possible. It for lamborghini, for sure is not the main market, but as an italian, we really do hope that we will be back as soon as possible. Impact will having your staff social distancing, we ar masks, maybe work from home sometimes, may be coming to the office and the factory sometimes, what impact will that have on how the business actually operates . In particular, do you think it will be a drag on margins . Stefano well, what is important this reductione to make sure we are ready to go back in the most efficient way. For example, the production line will keep their distance. Of course, they need to get used to that. That is why we decided to start off that not 100 so they would have more time to work with the masks. You need to get used to a different way of working. Homexample, working from for the right color for the white collars is a different opportunity. Understand [indiscernible] remissefano, i would be if i didnt ask, and my colleague matt miller would be very upset with me, are we going to see a plugin hybrid this year . Or do you think what is going on around the world is going to prevent either of those things happening . Not this year, but for sure, that is in the future. Because we are in a great moment of our brand, very successful last year. Now we need to start the journey from that moment and go back to the promise we are going to have , for sure. Stefano, thanks very much for your time. Stefano domenicali, ceo of lamborghini, joining us from northern italy. Coming up, we are going to turn our attention to what is happening in france and the energy sector. Engie cfo Judith Hartmann is going to be joining us. It is one is the it is one of the key stocks acting as a drag on the cac 40 today. This is bloomberg. Guy from london, im guy johnson, with vonnie quinn in new york. This is the count down the european close on bloomberg markets. Lets get an update on what you need to know. Here with the first word news, mark crumpton. Faucidr. Anthony explained the Trump Administrations coronavirus plan. He told a Senate Committee the United States is now in a phase one Clinical Trial of a vaccine. Dr. Fauci also called the drug them to severe a modest success the drug remdesivir a modest success. The pandemic has inflated the cost of living, he key measure of has deflated the cost of living, a key measure. That gauge includes volatile gasoline prices. It is a u. S. Supreme court battle that pits the power of sident to dimmest demands to dismiss demands from congress and prosecutors come on whether the president must release his financial records. It ruling against the president could lead to his tax records becoming public. Paying thekingdom is wages of 7. 5 million workers to protect their jobs. One new twist, some workers will return to their jobs parttime. In the government will split salary payments. 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. Crumpton. This is bloomberg. Vonnie thank you for that. Much appreciated. Firstquarter earnings for french gas and power utility as efforts to fight the coronavirus outbreak sapped energy demand. They are not able to provide a full year forecast. Joining us to discuss the future sr on g future for engie Judith Hartmann, the cfo. Engie cantus why rely on a bailout, and how far that would need to go. On your show to be today. Indeed, we did announce our First Quarter results today, which we are actually happy with. They showed resilience, but then of course, we also know that we also only have the first impacts of covid in these numbers, as the Biggest Country that is impacting us is of course france. We only had two weeks of lockdown in the First Quarter. Pressing now really for the second quarter, where we will have the biggest impact. You mentioned some of the measures the french government is putting in place. We are taking advantage of temporary unemployment, but indeed, it is not going to be to meet the costs for the revenue shortfall we are heading into. Vonnie right, and i am sure that capex and investment are severely curtailed as well. There are you cutting back capex . Judith of course, this is one of the measures we are taking on reducing expenses. In a crisis like this, you want to run the company in a conservative way until you have more visibility. You mentioned earlier that we had withdrawn guidance. That does not stop us from taking strong action in reducing costs, but also reducing capex. On the capex, we are very careful in terms of not isolating our future. Valuations are complicated to do at this stage in the crisis, and we want to make sure we keep some of the firing power as we get through the crisis, and as opportunities might arise. Guy that is interesting. Can i just come back to the issue of guidance and talk about what is happening here . It is interesting you talk about maybe holding back firepower. What would it take for you to have the clarity necessary to be able to provide that guidance to investors . What needs to change in the current economic sector as we start to reopen economies . I am wondering what key milestone you are looking for. Have ourndeed, we businesses impacted in very different ways. There are some that are related more to the Economic Activity you are alluding to. That is true for our generation business, for infrastructure, and quite frankly, the impact is relatively little, i would say. We havent had hardly any impact in the First Quarter. Where it becomes a little more complicated is the electricity and gas sales for customers where we heavily depend on the industrial activity, and this needs to ramp up in our main countries for us to see a recovery. And on the other extreme, which is our solutions business, this is a people intensive business. Some of it is not much impacted by covid. Heating and cooling is basically not very impacted. But we do have a part of the business that is related to construction, our installation business, where reinstall basically anything to do with energyrelated infrastructure in the building. Heating, cooling, electricity. Since some of the construction sites are now stopped, this has an impact. Your question of what we would wait for, this is a fluid situation. We have about 20,000 on temporary unemployment. Theysituation week is differenm last. This week alone, they are bringing back 4000 people, so that is good news. But of course, we are looking out for what is the shape of the recovery, how long it is going to take, and how fast our customers get ready to continue to work with us. Vonnie and of course, you have a significant presence in brazil , there, were obviously are certain problems you are facing now. What do you do about your brazilian operations during this time . Judith indeed, we have a big presence in brazil. It is one of our biggest countries, and whenever you and one that we are very proud of because we have been investing successfully, even through previous economic crises. This is one that needs additional electricity, it needs Additional Energy and gas, so we are involved heavily in this country. Of course, what does the crisis mean at this stage for brazil . The biggest impact we are seeing at this stage is actually the foreignexchange impact, which is the brazilian real has evaluated significantly has devalued significantly, and of course, there is high likelihood that this is going to continue for the rest of the year, or to some extent, at least. It doesnt take away from the fundamentals in terms of electricity production. It is a stable environment and has been a successful place. Additionaling on renewables, mostly wind, and brazil. We are quite committed to that country, including we did a bit of Network Acquisition also. E remain positive on brazil i think to some extent, it is more decorrelated from global trade than some of the other countries that have similar impacts, but no doubt in my mind, of course, we know we need to offset for this foreignexchange exposure, which is of course a headwind at the moment. Guy can i just take you [no audio] i am desperately trying to find some positives from the covid19 crisis, and i know it is pretty hard to do so, but i am wondering if this might be one of them. [no audio] i am desperately trying to find some positives from the covid19 crisis, and i know it is pretty hard to do so, but i am wondering if this might be one of them. You are a senior female executivee one of them. You are a senior female executive guy 30 seconds until the end of regular trading in europe. We gapped blower first thing this morning before starting to recover. We are mid range as we approach the end of trading. We come to that in just a moment. This is what the session looks like so far in european equities. As we see, the initial drop, and that a tight range. We have Jerome Powell coming up over the next day or so. We have a lot of bond issuance. A quite busy credit agile with a lot of but right busy credit schedule. The focus may be off the equity market. Of theocus on some individual markets around europe. The travel of the individual markets around sector has weighed on the cac 40. It has come up from its earlier lows. Airbus the dax. We have seen allie almond we have seen allianz in focus. The outflows from pimco weighing the outflows from pimco weighing on allianz. Vodafone a big factor behind that great a quick look at the sector breakdown. This tells the story. Telecom at the top end of the market where we have seen strong outperformance from vodafone into heavy weights and it has a disproportionate effect on the ftse 100. The bottom is the travel and leisure, the car sector, and the insurance sector. A look at the single stops to wrap the story up, i mentioned some of the names already. Vodafone, a good set of numbers this morning. It is also coming through and say it will not gatecrash the deal announced a couple of days back with virgin and liberty and it is also the tower sale, the tower spinoff, the mobile markets. That is on track. Stock is down 4. 1 . Vonnie here in the United States we are seeing mixed action on the disease. We had the s p 500 now turning green. There is lots of movement under the hood. The internals we will get to in a moment. ,ollowing the inflation data which showed a lack of inflation or less inflation than the market was anticipating, the 10 year yield moved only slightly and now we are unchanged at 71 basis points. The u. S. Dollar giving back some of yesterdays gains. , 2533. Il up almost 5 if we go inside the s p 500, we can see theyre a bunch of pharmaceutical companies higher, including lexicon pharmaceuticals. L brands also higher. It may be one of the companies that survives everything. K are fightingewor and it does point to a pandemic premium. We will see how that plays out. Capote lay also doing chipotle also doing better as it starts to reopen. At the downside, storage companies, real estate companies, will be speaking later to get a good feel for the commercial real estate sector and Industrial Real Estate and things like senior assisted living and so on. You do not want to miss that interview at 1 00. I want to point out two stops that have short moves two stocks that have short moves. Uber making a move for grubhub. Grubhub is soaring and so is uber. It is potentially the deal that saves uber and makes up for lost revenue given that uber is a different composition following the coronavirus pandemic. Usr Restaurant Brands is making a big play for coffee shops in china. This is on the day we are learning luck and coffee is firing at siena firing its ceo. Lucken and tencent had been in the deal to expand in china. Tencent is giving that back into qsr. Restaurant Brands International making a big play for china. Guy lets talk about what is happening in the world from a foreignexchange point of view. Europe trying to figure out how it can reopen its economy, transit in a coordinated way, and figure out how to stimulate the economy. A similar problem around the world. Lets talk about how you handicapped that from a foreignexchange point of view. Joining me as jeremy stretched, head of fx strategy cibc. I am trying to find how the markets approach the different ways different economies are likely to reopen and how you handicap that from various points of view, the Foreign Exchange the bond markets, or the equity markets. How you look at the problem . The dollar because u. S. Economy is opening more quickly . Do i sell the euro because it will take a while to get europe up and running. Dry the chinese currency . The chinese currency . How do you do this with a foreignexchange builder . Jeremy you hit on what is a preeminent problem. If you st

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