An additional 30 billion to the economy plan. Last night and took it to the session into europe, it looks as though the Trump Administration is going to take a harder line when it comes to hong kong and we will return to that theme in around half an hour with more insight on what the British Government is trying to do to kickstart the u. K. Economy and we will be joined by steve barker, and that conversation is live at a time in london and 11 30 in new york. Had cash for clunkers in 2009 and i guess you guys have cash for food. Lets take a look at where we is ourting, scarlet fu senior markets editor. The s p is off of its highs, the nasdaq and the nasdaq 100 are at record highs, no surprise that you have the record highs in apple and amazon. What we have been seeing are the european stocks moving, with plenty of demand for safety with gold prices moving about 1800 an ounce. Speaking of, take a look at these names, they are all at record highs and the bigger getting bigger. They have demand for their services and products which goes a long way. Cameron crise put it this way in his note, this is a topheavy rally. The nasdaq 100 gets almost 50 of its market value from five names, and you could really see nasdaq you compare the 100s relative performance to the s p 500, the white line versus the blue line which is the nasdaq 500s relative performance to the equal weight index. Is 76 percentage points, and thanks to dave wilson for putting this chart together for us. At european look banks because europe is down now, and banks are the leading decliners. And thisof arguments, is like a deteriorating revenue outlook and it has downgraded the stock. We are also keeping and i on a londonbased thing which gets out of hong kong. Guy we will talk more about this a little later, scarlet, thank you. People talking about the s p 500 , and the s p five is very topheavy. Lets take a look at whats happening in europe, this official clip is outside of germany, the german chancellor, Angela Merkel was in brussels today. Urging the European Union to unite to confront which she has called the biggest challenge in its history. In these times of crisis, we dont want to forget the path ahead of us, we want to implement this for the future. And that means that the money that we want to use for the recovery will simply not be invested in getting us back to where we were, but will rather be a step towards the future. I believe we will have good cooperation on this. Guy Angela Merkel and the official head of europe at the moment. When we look at the prospects of investment in europe, we have our guest from morgan stanley. Greg, thank you the time thank you for taking the time for being with us. A lot hinges on what happens next in europe, because the way you approach of the way you approach a Global Investment portfolio. We will see a summit in a few days on the 17th and 18th which we will which some help will nail down the program that Angela Merkel was talking about. This is a substantial program which is designed to help europes economy recover but it is becoming more likely that we will not get a decision. If you are sitting on wall street now and you are thinking of taking money out of the United States, how critical of a decision is that in terms of your thinking when you look at whats going on with european politics . Afternoon and good morning everyone. It is critical from a mediumterm perspective that this happens. Its not critical that it happens next week but it is critical that happens in the next couple of months. We think it morgan stanley, right off the about when this was announced, we were positive, calling it a game changer. If you offer up something a significant as this and for any reason take it away again, thats a very negative situation for europe and we are confident that this proposal will get through. We dont always move in a Straight Line in history would suggest that we perhaps need a number of summits to get it done as opposed to one. I think a shortterm delay with markets a little disappointed, but ultimately, we can look through that. Suggestonger delay will that the proposals being watered down and that would be a much bigger challenge for people like ourselves who are making the case that alix lets get to the outperformance conversation, whats behind it . Is it that stimulus will be better in europe than here in the u. S. . Is it a value trade . Is it the benefit for unemployment and businesses are different here . Whats the thesis . Premiumink it is a risk thesis. We dont expect the European Economic recovery to necessarily be stronger than what we see in the u. S. , and the policy response is not as big and europe as the u. S. But i would put it like this. We have been worried and europe for the last decade or more about the risk of the eurozone breakup. That means the risk premium on European Assets have been elevated because of the concerns of the breakup. If this proposal passes, we this it signifies that will not necessarily fall to zero in terms of risk but it does fall. Unless Political Risk comes down which would allow european valuations to go up. There were some policy uncertainty indices and what you find is that european policy uncertainty is that there is already a low relative to u. S. Policy. Time,ld be an interesting when you have a president ial election in the u. S. Which could lead to volatility. At the same time, there is risk in europe which is falling materially. It is a valuation and waiting story of European Assets. Went to have had the rerating, do you put the money to work elsewhere . How sticky will it be . What is it that provides the catalyst to want to keep the money in europe . Thats a good question graham thats a good question and i am confident that europe can do better. I think longer term more of a challenge and with the other comments on your show just now, europes reaction to tech is a problem longerterm. We have a report today that there is a firm exploring how europe might spend the money, and does depend. Whether or not it goes to nearterm stopgap spending or longerterm investments, only time will tell. I think there are pockets in europe like the esg angle and the green angle which could potentially offer very attractive returns to investors over a multiple year timeframe. This is better than what we will see with some stronger nominal growth. Personally i think there is enough upside for europe over the next three months to six months and im not particularly fixated on what the next one to three years looks like. I think we will cross that some point at some point in 2021. Theres enough upside now in the coming months that we can get this done. We dont have much more time, do you distinguish between countries right now on a shortterm basis . Graham there are some folks on the periphery. The key beneficiary of this proposal are financials on the periphery. I think we go over the money goes. So pretty free over the rest of europe is the key function. Dontdont fight the fed, fight the ecb. Thank you for joining us. Coming up, the World Health Organization says the virus now hangs around water droplets. More on what we are doing to contain the pandemic. This is bloomberg. Alix alix steel with guy johnson. Haslatest in the u. S. Revolved around schools within new york city, the mayor saying that kids could go back to will in september for about two to three days. President trump really weighing in heavily on reopening schools and pushing back against cdc guidelines. Joining us now is a senior pharmaceutical analyst for boom lurk intelligence. This as this debate becomes politicized, whats the Science Behind this . Sam sam . My firstquest sam question for you is there anything that isnt politicized in the u. S. We have to deal with the scientifically, rather than making it a backandforth partisan issue. We do the children, generally, there are examples of kids who got covid19 and had her ecig horrific disease, generally they are not infected. They get infected but they dont get the disease that we worry about. But of course the risk is that they are still transmitting the infection and we have to watch out for that. In terms of whats happening right now with the science, im struggling with one thing in particular and the market is trying to figure this out. We have a growing lag between the rising case count and mortality in the state which is going down. Greater, oretting is it that we actually have a different demographic and as the age demographic its lower and lower its unlikely we will see the mortality rate rising . Hospitalizations are presumably a factor and once those are getting to a critical level, maybe they reconvene . The i have seen hospitalization rates for a couple of states looking pretty horrific. But lets step back from trying to overanalyze and perhaps celebrate the possibility that we have become better at managing this disease. Whether its because of demographic shifting, background immunity because of being infected with some other coronavirus some time ago and i have some sort of immunity in terms of managing the disease, or because the hospitals and physicians have gotten better at , andng with the disease finding people early enough to treat them etc. It is likely to be a combination of all of the above. As we have said many times in this discussion, everybody is learning as they go forward. Lets hope that you do not see a spike in deaths. That would be great. Jam overanalyzing is my sam, thats what i do. The scientific view is getting very polarized in the u. S. , as the disease changes, dr. Fauci was talking about that, we need to change the metrics we look at and the milestones. Know, i have a normas respect for dr. Fauci, that is something you will only theres not passes, evidence that the more infectious virus that we see now is more deadly or disease causing. Way,tory usually goes this as viruses mutate they become less severe. Only time will tell. Guy what is the significance of transmission through water whylets, i can understand places with monsoon like india how that would work but wise that a problem for the rest of us . Sam its a problem for the rest of us if we guard we are going to continue playing games with if we wear masks. There have been plenty of studies with laser photography etc. Shown that as i am speaking loudly now, i could emit water droplets that are sufficiently large to carry virus up to a meter away from my body. Thats how anybody in my vicinity who inhales those water ofplets becomes at risk contracting the infection. If i am wearing a mask and they are wearing a mask, the risk becomes lower. To these water droplets hang around in a room where theres no air movement. Thats a problem. His Office Environments and elevators are on trains and planes and commuting, if folks are not wearing mask and theres not enough ventilation you are breathing in each others water droplet, which is a pretty horrific thought. Guy i had a novel experience yet the day, for the First Time Ever in my life, the hairdresser said i was not allowed to talk. Usually theres attention there. Sam, thank you. This is bloomberg. Guy welcome back. You are watching european close p lets talk about whats happening in hong kong. Hbv c is getting pummeled in the ftse 100. Bloomberg reporting last night that President Trump, some of his advisors may be discussing a plan to punish banks in hong kong by destabilizing the currency due to the latest escalation in tension of the u. S. And the region. Our guest joins us now, henrietta, is this targeting the chinese authorities . Or is it targeting those who have business in hong kong. Im wondering why the u. S. Would want to undermine hong kong and the hong kong dollar . Henrietta thats the Perfect Question to ask. Not only are they targeting hong kong in a way that would have massive repercussions to the u. S. Economy and the u. S. Stock market, but they are doing so theoretically with this move despite having many options which would much more directly get china, specifically banks that are helping chinese are actually threatening hong kongs atoll to me. There have been bills in the senate and the house that have gotten to the president , which allows the sanctioning of officials but also imposing secondary sanctions on Financial Institutions on those who have involvement in facilitating the hong kong autonomy rule. There are other ways for the administration to go about it and it seems like they are pulling ideas out of the ether and thinking anything that punishes hong kong impacts china and had to be our goal. Move would have blowback on the u. S. As it exchanges in our currency. Here in the u. S. Tech companies on their own, microsoft, google, amazon, are trying to understand how they respond to government request from china for data for hong kong users and what their role should be. What do you do if you are a company with a heavy presence in hong kong . Henrietta thats exactly right. And the question you are asking is the one the administration wants you to consider. We have seen that since the trump on the trade war cut the jump on the trade war. The threat of these listings are all designed to get you out of china, whether or not tariffs work or an aggressive trade war goalfective, the luminary and the hope is that u. S. Or manufacturers will decouple from china either organically or because of the political uncertainty. Thats a feature, not a bug of this administrations u. S. China strategy. Guy is there a danger that this does not work out . If i was hong kong i would say you know what, im not paying my currency to the dollar, i am pegging it to the yuan, which would make the u. S. Look impotent. A number ofhere are voices and washington, d. C. Who are stressing that point, trying to get the administration to back off some of these more erotic erratic moves. And the labor is that you want the United States to be the number one market and exchange to be listed on and you risk undermining that by doing like delisting used Chinese Companies from u. S. Exchanges. Its an important component. Guy thank you for your time today. Thatd airlines is warning 36,000 u. S. Employees have jobs at risk. This is bloomberg. Guy european stocks are wrapping up the day. The very light volume once again. A number of factors to contend with. Continuing uncertainties around the virus. We have watched u. S. Tech continue to drive higher. European equity markets midrange. Very light volume. Stockop in focus one in focus is united airlines. At the end of the summer the cares act money will run out. There was a provision when they took that money they would not fall. Ople off until the that process will begin to start with demand as it is. They are unlike to have sustained cash flow in anything they have been. This will ultimately fall on jet fuel has come down, probably not enough. A lot of people are likely to lose their jobs. Lets talk about what is happening with u. S. And European Equity markets. We will deal with European Equity market in more detail. We have not had a great day. Banks have been under pressure. It is a volume trade worth focusing on. Hsbc is the story. The dax down nearly 1 . The cac 40 over 1 . We have seen strength in the ftse 100. If you see strength in the ftse normally that feeds the other way in terms of pushing the 100 down a little bit. A stronger pound, weaker ftse 100, but that is not what we are seeing right now. In terms of the u. K. Budget, it did drive a few stops higher but a few stocks higher. There is your stock breakdown. A defensive bias today. The miners have had an ok day. China data continues to be good. Gold is up. Copper continues to be a story to focus on. Defensives like food and beverages doing relatively well. Construction, travel and leisure, all tracking lower. Lets take a quick look at individual names. I want to highlight what is happening in terms of the single stocks. Has since we saw the problem out of washington with the white house and staffers talking about hitting hong kong hsbc down 3. 11 . First group, this is a travel company, it has the greyhound group, it is under considerable pressure. I saw numbers earlier on suggesting travel on the Greyhound Bus is down 80 . Persimmon one of the beneficiaries of what the chancellor has delivered today. Another demand stimulus in terms of cut in standard gdp. The real focus was on jobs. 30 billion pounds added in u. K. Stimulus has been delivered the fark by the chancellor. Deliveredinued so far by the chancellor. Here are some of the things he had to say about the economy. I want every person in this house and the country to know i will never accept unemployment as an unavoidable outcome. We have not done everything we have so far just a step back now and say job done. In truth, the job has only just begun. In many ways this is something you never wouldve expected from a conservative party government, but seem to begin spending in terms of jobs and investment. Bevan joins us now. We have seen the house bill doing relatively well. Brewing companies doing relatively well. Is there anything in the budget that would encourage you to invest in some of these names . No, quite frankly. For me the biggest concern is on the Housing Market in the next year. What happens on Credit Availability. [indiscernible] he has identified he is keen to ensure people get back to work. This will ultimately be Credit Availability that becomes a real challenge. I do not think the arrangement in any sense is addressing that challenge. Likely to see Something Like a decline in prices. That is baked into the cake, i fear. Alix what about restaurants, pubs, things like that. I was making fun of guy earlier, so we have cash for clunkers and they have cash for burgers, youre getting paid 50 to go to a restaurant. Does that help you feel better about that sector . James i certainly think we are in a better position than we might otherwise have been. When i think about the mediumterm prospects of the economy, i still think we are going to be talking about an Unemployment Rate between 6 and 7 by the end of this year, compared with 4 at the end of 2019. I