The who reports the most infections for a single day. Global stocks trade lower as u. S. Futures swing from gains to losses. Bloomberg learns the german lender could cut up to 7000 jobs and shutter 400 branches after its current costcutting measures were called in abject failer failure. And starbucks, pepsico, and biaggi out are the latest pump needs to curtail ad spending on facebook. Pressure on the company to crack down on hate speech shows no signs of slowing down. Just under one hour away from the start of cash equity trading in europe and the u. K. Futures red across the board. In europe we are looking at 1 plus losses. Germany. Much here in euro stock futures down about. 75 . U. S. Futures swinging from gains to losses. Now we are looking at about a. 25 drop for the s p. Nasdaq futures down about. 5 . What are you seeing on the gmm . Anna in conjunction with european futures, they. 4 a point forening they a weaker open. Chinese equities looking relatively resilient. Japanese nikkei down by 2. 3 . Cost me down by shy of 2 . A lot of the focus heading into the european and u. S. Trading day, a lot of the focus is on the u. S. Inspections. Infections. Later this week it will be on jobs data out of the u. S. We will keep an eye on where those head. When ito talk about comes to how the virus is interacting with markets right now. A little bit of weakness in the dollar as you might expect. Riskoff move in equity markets. We saw appetite for sovereign bonds. So we have a classic look at risk through these markets and some weakness in some commodities including wti down another 2. 3 . Lets get the first word news update for you. Coronavirus cases are surging. Johns Hopkins University saying and million cases saying now 10 million cases. Despite some experts hoping the pandemic would start to fade in the summer, infections are multiplying faster than ever. Over two thirds of americans think the u. S. Government was unprepared to handle the outbreak. President trump says reports that russia paid bounties to have u. S. Troops in afghanistan killed are not credible. The white earlier denied that President Trump was briefed on the issue. The New York Times reported on the story, saying the white house spent months considering a response but had made no final decisions. In france, it was president emmanuel macrons first electoral test, and his party was defeated in the paris mayoral race coming in a distant third. But it was a good night for the greens. They took cityed hall in frances thirdbiggest city. 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 asian stocks retreat and u. S. Equity futures are swinging down, as the ongoing spread of the coronavirus outweighed signs chinas recovery. Joining us is simon flint. Marketssk you how asian are bearing the brunt of this, especially as u. S. And western Central Banks continue to add stimulus to support the economy. Simon yeah. People kind of came in on monday being pretty pessimistic, and i think the negative mood persist for the next week or so. People are mostly focused on what is going on in the u. S. I think people in asia have felt policymakers in the u. S. Reacted belatedly in reinstituting the u. S. , comparing unfavorably with korea and china, places like that. High infection rates across the sunbelt and the u. S. One thinguded to, could be the release of the fed minutes on wednesday. Personally, ill be looking closely to any discussion of yield curve control. Because i think if expectations can build for yield curve control, that could end up being pretty positive at the markets. Anna i know the question of the day you have been throwing around is what will last from the first half shock. There were plenty of shocks for markets to deal with. What will be the ones that stick . Of course we have seen a substantial rebound in Oil Prices Since we got that negative price a few months ago. Simon people are less concerned i think about oil and commodity prices, although of course it is concerns about covid infections continue to grow from here, that may well change. I think generally speaking, people are saying that the things that will endure, peace perceptions of geopolitical risks between the u. S. And china, the risk of a trade war being reunited, but closer to the u. S. Election and the Positive Side of that is that people are looking for a response from the fed, looser policy that would be a continuation of what we have seen the first half of the year. Matt you mentioned the u. S. Election and i know you have a macro column out on a positive stance for emerging markets currencies and bonds sort of hinging on that election. What are the outcomes likely to for emergingtlook markets fx and bonds . Simon as we get close to the election, lets say around i thinkr, october, then the risk is you get calls for tariffs against china. The phase i deal again looks like it might be in jeopardy but once the election is out of the way, and even intentionally before the election takes place, if the result has been decided well ahead of the time because there is a huge disparity in the polls, then i think actually he could get a rally pretty soon after the fed election is decided. The tone of u. S. And china relations is so bound to the electioneering. Leastk in particular, at as far as International Affairs ago, a biden presidency would probably inspire some investor optimism with respect to having more predict the goal predictable trading relations. People might need to start thinking about having tariffs rolled back rather than increased at the margins. Obviously there are different residences for the domestic a biden but look to presidency to be slightly more predictable at least. Anna interesting conversation, no doubt one we will return to ahead of november. Simon flint joining us this morning to go through the markets. Coming up, going against the grain. Now is the best upping opportunity since 2009. We speak to him about why he is shunning big tex. This is bloomberg. Tex. This is bloomberg. Matt welcome back. This is the european open. We are just under 50 minutes until the start of cash trading. You can see futures are trading down on this monday morning. Lets get the Bloomberg Business flash news from the bloomberg terminal. Itserce is preparing to up costcutting and profitability targets. Axe 700 jobs and close 400 branches in the wake of criticism from capital management. They are clues leaders of abject failure in turning the lender around. Approvedlators have test flights for the boeing 737 max jet. They could begin as soon as today after reviewing the Safety Assessment of multiple fixes they made to the plane. It signals the government is finally comfortable with the changes. The jet has now been grounded for more than 15 months after two fatal clashes crashes. The number of Companies Pulling as from facebook is growing, putting its stock price under pressure. Levi and pepsico are among the most recent companies to curb ad spending. Force facebook to tackle posts with racism and misinformation. Lets talk about what is going on with the coronavirus in the United States. Infections topped 10 million. Hope for a vaccine from china after one Company Approved approval in the military has not been enough. Last weeknt theme of looks set to dominate this week as well. We are joined by barry norris who is with us. A real pleasure to speak to you. We are going to get into your thoughts around specific stocks and hedge fund activity. We will get into that conversation next. If we can focus first on the big picture around these markets. Set for equities another sluggish start to the week. Do you think the focus or the Public Health of element will remain at the forefront of markets heading into the next few months . The virus and how it develops and the appropriateness of the lock down is front and center of what will happen to the real economy and what will happen to the stock market, or at least to the leadership of the stock market. And obviously reports of the socalled second wave of infections in the u. S. Is clearly having a fairly bearish impact on sentiment at the moment. Think we are going to see increased lot downs . Lockdowns. We have gone from strict lockdowns to opening up a push for opening up, especially in countries like the u. S. But here in germany we are pretty open as well. It looks like growing concerned about infections are going to get us back to locking down businesses. Does that seem like a Fair Assessment to you . Barry i would like to make a few observations on the socalled second wave. It is notll, happening anywhere where there was a significant first wave. In europe there has been no second wave anywhere outside of germany. Essentially the spike of infections has happened in states that did not really have were not affected by the first wave. Secondly, i would focus more on mortality than infections. Infections could just be going up because more people are tested. The important thing from a Public Health point of view is the mortality rate. Daily deaths at the moment in the u. S. Are running 90 below the peak, which is something that is not really being reported at the moment. That is obvious he much more important for public policy. I would suggest the reason why the mortality rate is mercifully lower is that the median age of infections is actually below 30 in states like texas. Of course given what we know about mortality rates among different demographics in covid, lessof course is happily then what we had a few months ago. Anna we all hope the death rates stay low. Let me ask you about how you youst around this, because are the most bullish on cyclicals since 2009. Why do you see such a big opportunity there . Barry my experience investing in cyclical, is that you only make money investing in cyclical, that period of great financial distress, after which you have had an incredible policy response. Through the money traveling rather than the arriving. Soon as the economy normalizes. It is inevitable now that the economy has a few quarters of exceptional growth. Assuming Economic Activity everywhere bounces back. These indices are the reason why they are such a good indicator of Economic Activity. Are things Getting Better or worse . In march, for everyone apart from maybe tollett paper manufacturers, netflix, amazon, things were getting worse. That also inevitable things for nearly every company will be Getting Better. We havemost inevitable a few courses of double digit Economic Growth as the economy bounces back. In that scenario i do not think i have ever seen cyclicals underperform when Global Growth has been accelerated. The besteve opportunities in the stock market at the moment do have a dominant narrative of recovery. Certainly i believe over the next few months you will see a significant outperformance of cyclicals, which have significantly underperformed this year and are still 30 to 50 down this year come over the stocks that have done very well. Matt we want to get more from you. Barry norris is with us, founder of argonaut capital. We have a lot more to talk about with him. Certainly on the subject of wirecard. Germany says selfregulation does not work. The question is did regulation do the opposite of working . Did it make things worse . Reports say that merkels government will end its contract with the countrys watchdog. This is bloomberg. Back. Welcome this is the european open. Right now we are about 40 minutes ago away, 38 from the start of cash trading and looking at negative features this morning. Peering germany, the country will give the power to start investigations into Company Accounts to the nations financial regulator. In a report, the deputy finance minister has said that selfregulation by the auditors does not work properly. In a separate report, newspaper has said that the government will ends the contract with the countrys accounting watchdog. Barry norris, founder of argonaut capital, is still with us. Oft is your assessment handing more power to bath and i am not sure makes sense to everybody. Withoutyour assessment they dealt with the wirecard issue when the first signs of fraud started to appear . Barry i think along with many other shortsellers, the real surprise about wirecard was not that it was a fraud, but how it went on for so long without being identified as a fraud by most investors. Matt hang on. We should make it clear that you were a short seller in wirecard, right . Some time ago. Barry we have been short wirecard for three years. Last thursday when the company failed to publish a set of audited accounts, it was our biggest short position of the fund at 5 . To get back to your question, it is pretty clear that a sophisticated multibillion euro fraud like wirecard could not have been perpetuated for such a time withoutf wirecard having undue influence in the financial establishment in germany. And therefore, to give more power anna what were some of the clues . Barry sorry . Anna what were some of the clues for you that something was not right at wirecard . To make investment pretty simple, if a company cannot tell you from what activity they derive revenue, if the company cannot tell you why and surveys in germany it does not feature in the top 10, if the company cannot tell you why it needs to borrow a lot of debt when it supposedly has a lot of cash on the balance sheet, then that is setting alarm bells ringing. Wire d, they had more what is amazing is how they went on for so long. Matt what do you think about the move to ban shortselling . It seems interesting because it is the only time the regulator has banned shortselling on one specific company, and it came in the wake of some pretty convincing reporting by the werecial times that there accounting issues for this country. Barry you are quite right. It seems extraordinary that even have theauditors allegations of fraud put under their nose, that they decided to not only ignore them, but to ban shortselling and investigate the journalists and the shortsellers. Matt all right. Fascinating stuff. Good to get your take. Yeah. And something i am sure people will continue to look into. Norris, thank you very much for joining us. We will come back to you to get your thoughts another day on some of the other stocks youre watching right now. Coming up, market activity in the first half of 2020 made history in more ways than one. Who are the winners and losers as we head into the second half . We will get market analysis. Also keeping an eye on developments in pakistan. The Pakistan Stock Exchange building was being attacked. We now hear from the Pakistan Stock Exchange ceo that all attackers have been killed. They say it was under attack by terrorists. We will keep an eye on those developments. This is bloomberg. This is bloomberg. W . W . Uhiono welcome back to the European Market open. It is monday morning. We are down in futures markets, around 0. 2 . We are recovering a bit of ground. U. S. Futures have been fluctuating, looking pretty mixed, continuing to be either side. The nasdaq underperforming in the future markets. Lets take a look at some of the events to watch out for this week. It will be a busy week, even if it is a shorter than usual one. We have cpi tomorrow. Inflation will accelerate yearoveryear in june. A small recovery in petrol prices. A busy day on wednesday with the latest fed minutes published. Decision from riksbank. Also on wednesday, russia will complete a week long referendum on a constitutional amendment. The changes will allow Vladimir Putin to extend his hold on power beyond 2024. Finally on friday, u. S. Markets will be closed for the Independence Day holiday. Matt . Matt ah, Independence Day. Good to see they will still celebrate that. Lets take a look at what is going on in the completion of the first half of 2020. We are a couple days away from that. It has made history in more ways than one. Is coronavirus crisis, which expected to plunge 90 of global economies into a recession this year, has caused market upheaval. Lets take a listen to what investors had to say on their outlook for the second half of the year. Is here to stay until we have a vaccine. If you look at markets, risks are active. We have to start as a market revising down our gross outlook for the United States, our earnings outlook for the markets, as we price in a possibility of lockdowns being extended. Given we are in the middle of a recession and the recovery road is going to be treacherous and long. At this point, emerging markets around the world, it is anticipated they will take a disproportionate hit. A fewa matt investors on their outlooks for the year. The first half of 2020 is one none of us will easily forget. For investors, it has been six months of market upheaval. Lets get more with our markets reporter Juliette Saly in singapore. What is your assessment of the first half of 2020 and how it continues into h2 . Say, it iss you certainly one we will not forget. We saw the stock plunge from record highs in the first quarter, the pandemic and trade growing. Global stocks entering the first bear market in 11 years. It was the shortest bear market on record because we had trillions of dollars in stimulus from monetary and fiscal authorities, which prompted the rebound in asset prices. As we finish off the second quarter, we have the msci index on pace for its best quarter since the Third Quarter of 2009. For its500 on track best quarter since 1998. Hasu. S. Equity recovery certainly been the front runner, outpacing what we have seen in the stoxx 600 and asian stock recovery, the yellow line there. We have seen that move into Health Care Stocks up. Also the working from home trade. We have seen the energy in real estate in energy and real estate the worst. You have seenly since march lows has brought valuations lower. We have benchmarks trading at the highest in more than a decade. Anna good morning. Bond markets, take us through this