Worsening Downside Risk. Raphael bostic knows joblessness seems to be flattening plateauing at a high level. Netflix plunges on disappointing subscriber forecasts. The Group Announces its chief content officer will join Reed Hastings as joint ceo. Just under an hour ago to the start of cash equities trading. With have a look at what is going on on futures market, a little bit of upside for European Equity markets and u. S. Markets for when we get to the u. S. Trading day. ,eep an eye on nasdaq features quite robust, up around 7 10 of 1 despite afterhours negativity around netflix, contained to just a netflix story, not anything broader about the tech sector. Weve had pleasing reports but they havent always been accompanied. Rising share prices is an interesting dynamic to discuss. Getting some numbers from electrolux, recovering faster than predicted. The numbers look to be broadly in line with estimates. Coming up, speaking to the ceo. The ceo will be joining us later on, jonas samuelson, shortly after 9 00 a. M. U. K. Time. Tune in for more details on that. Lets move to the gmm and what weve got moving around in the hs equity asia equity session. Thats indicative of what weve seen. The csi 300eakness, down after the much bigger falls yesterday, down 4 or so on the csi 300 yesterday. In todays session, a fraction of that, shanghai down 1 10 of 1 . The asiapacific is up to 10th of 1 . Were at a make 2 10 of 1 . Mix. At a we look ahead to the meeting taking place in person in brussels later today. The dollar is fairly flat as we head into the last trading day of the week here in europe. Asian stocks, along with u. S. Futures looking quite next, on signs of fragility in the u. S. Hamperncerns they will the recovery. Lets get to markets with laura cooper. I want to start by asking about the sector. We had numbers from netflix. Disappointed. I wonder if thats a contained story, not that impacts the rest of the sector. Weve seen asml giving fairly positive updates. What do you make of where we are in tech at the moment . Laura i certainly think investors have been hiding in the tech sector. Theyre seeing the comfort as a haven plate and were haven play and were seeing that take shape. Anticipate demand is going to slow going into the q3 period. But when we look across the spectrum, tech does remain a secular grower. They are quite profitable when we look at other areas. Clearly, thats likely to continue to go forward. I think this would, we started week, we started to see this rotation. The smallcap started to outperform the nasdaq. Were seeing, its premature to see that cyclical upswing. Thats why were seeing some outperformance today, potentially futures trying to struggle because theres a lack of visibility on the economic outlook. Investors are seeking shelter intact in tech. Were going to spend time talking about the bailout fund today. We talked about the ecb, Christine Lagarde saying there seems to be differing opinions over how much commitment there is to spend all of the ecb firepower in buying up assets in europe. Onto the Recovery Fund, what is the risk for the euro there . Laura i certainly think there are High Expectations that he Recovery Fund is going to have some kind of compromise potentially this weekend. I think the bar is set too high for that, given the fact there are deep divisions remaining. Saying gry him as ryd hungry, out hunga come out and say it was going into this wicked, the year weekend, the euro is on the ts tilted to i the downside. Hase look at how the euro done against the dollar, its about 5 . Clearly, good news is already priced in. Anna thanks very much. Laura cooper joining us with a look at some of the market scenes that are moving. Were range bound on the euro right now, eurodollar at 113. 79. If you want to get in touch with us or the market live steam, ib tv is the function to use. You can get in touch with us here at bloomberg. Lets get a first word news update, some of the top stories. He was Infectious Disease expert anthony veggies has many States Anthony fauci says many states reopened too quickly, this as flora and texas florida and texas report Record Numbers of coronavirus there. Elsewhere, manila result passes to million cases as the virus spreads in the poorer, remote areas. The u. K. Warned russia is seeking to still Coronavirus Vaccine research. Britains National Cybersecurity centers has facilities have been targeted a group which is almost certainly part of russian state intelligence. Security agencies in the u. S. And canada later backed up the findings. U. S. House Speaker Nancy Pelosi says shes confident congress can pass another virus relief plan in the coming weeks. Democrats call for 3. 5 trillion more spending as the coronavirus room continues to rage coronavirus continues to rage across the country. They should agree at least one point really 1 trillion is needed. We cant go home without it. And so, because of the Unemployment Insurance expiring, the rest of that, we have to have the legislature. Its been two months. Its been two months. More people have died. More people have gone unemployed. And more people have been infected. Anna global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Meetxt, eu leaders today for more stimulus talks. Well discuss next. This is bloomberg. Anna welcome back to the fridayn market open for s session, futures up a higher. The way as Market Expectations ways on e. U. Leaders as they thrash out a stainless package. The heads of state including Emmanuel Merkel and emmanuel ron ash Emmanuel Macron joining us is maria tadeo in brussels. It is a marathon session. I likely a deal by monday how likely a deal by monday . Maria at this point, its difficult to tell. Officials will tell you at this point, its not guaranteed there will be a deal by the end of the week. The possibility of this deal has been played down. A lot of this has to do with the optics of a difficult negotiation. When leaders come here to brussels, they need to show they are fighting hard for taxpayers and taxpayer money. What i can tell you is the action here has been pretty relentless. We know Angela Merkel has been on the phone for 24 hours, hoping to get some type of compromise. We know she was on the phone with the biggest critic. His concern about the conditions of the deal. We know Emmanuel Macron had a lastminute bilateral we with giuseppe conte, who has a great interest in making sure there is a deal by the end of the week. Its unclear. Theres many few many theories. Some suggest it could end tomorrow with no deal, or stretch into sunday only if theres a probability of a deal. Anna if there is no agreement, what happens . What is the plan b, maria . Maria that is a question we put two officials any times. If the deal doesnt happen, what could change . We know the people running the presidency. And Angela Merkel has said she does not want to see the grand component of this fund be watered down. She wants to see the 500 billion 500 billion euro safe hood. Perhaps there could be changes to the deal. There could be conditions that could make it ok but its difficult to see what could change in the content other than letting time go by, make a difficult negotiation. Optics are important and into weeks time, its a possibility. Theres a summit planned on the 21st of this month. Thanks very much, maria tadeo joining us from brussels. The impairments came in lower than many in the market had expected. There are job cuts talked about. 2020, 2021, making staff reductions. They did see a rebound in lending activity. We had a positive take from the Banking Sector this morning. Lets get picking up on my what maria was saying, get back to that conversation and bring in ruben secura, the head of the European Economic research. Great to speak to you. We heard our colleague talking about the expectations for whether a deal will be done today or later this month. Let me start with a question about how necessary this is because Angela Merkel talked about this needs to be massive. The market is waiting for something big. Yet there are some voices talking about how the virus handling in europe now seems to have gone pretty well relative to other places. Maybe data is improving. How much need is there for the 750 euro 750 billion euro bailout . Ruben hi, anna. We really need this. It sends a very Strong Political signal. Youre right. Data is improving, but this is quite mechanical. It comes with reopening. Really is important in the Recovery Fund sends a political signal. In europe, we have large funding. The ecb is helping with the net funding needs. A political signal to stop investors from selling. Thats what the Recovery Fund is about. Im more skeptical on the Economic Impact of the Recovery Fund. This is very large, talking 750 billion euros. But at the end of the day, we are facing a very large shock. This is not going to solve structural issues we have in europe. This is not a huge game changer for the mediumterm outlook in the next couple of years. But the political thing here is key. Anna so we need this for the political signals. What about the underlying economy . You made the point that euros are needed now, not just 2023 and 2024. What will you be watching as to how soon the money is dispersed . Ruben i think that is something to watch closely. The problem with the recovery if you look at the European Commission plan and the documents a few weeks ago, a big expenditure happens in 2024. So to me, earnings signaled after negotiations, we could get the money faster. That could make me change my mind slightly. Actually, i would be willing to trade a smaller fund, lets say 600 billion euros, if this money gets there because thats one of the main issues we have right now with that Recovery Fund. Anna what do you think is the governors issues around this . How does the eu make sure the money is spent appropriately, spent on projects that will deliver, but we dont have a situation where countries feel like troika, for a situation like a troika is doing decisionmaking . Because that was difficult around greece. How does the government have to function here . Uben thats a good question and as maria was saying ready for me, the conversation seems shifting, not fully, but away from the size into the government. And that is key. That is very important because you want to avoid what you are suggesting but this looks like a four economic adjustment. This comes with three conditionality, that this comes with a vote from the governing council when it comes to moving plans and reforms, which it is what the frugal are asking for. Fundmakes the recovery quite useless. Every single country will be very reluctant. There is a space for the compromise. What the close to council was suggesting could make sense. Proposed or a bottom up approach, countries decide which they want to do based on the european semester and the recommendations and those reforms need to be approved by the council with qualified majority. You have to strike the right balance. If you move too far on giving you risk thet, political signal i was mentioning before and you risk going back to the narrative so toxic that we had back in february. Circulating ins some countries like that. Yeah, well certainly watch the details around majority voting or whether we have to see a qualified majority on whether we see unanimity. Let me ask about the ecb. How interested are you about the conversation about whether it is all spent . Do you think this is an area where the ecb has internal division . Or do we make too much of that, perhaps . Ruben i think that was raised yesterday. Now we have some strange comments, both in the outlook. Some complacency on the outlook, and also those comments on the nonneed to use that. I think lagarde did an excellent job yesterday when she was asked about this. And the message here is unless we get some massive prices, all of that will be used. Yes, there were resources thi ning whethere whether this was the broad feeling of the council. But i still think the data will force, not only to use all of addcurrent, but will also additional envelopes. Were calling for another increase by december. Anna ok, thanks for joining us. Great to speak to you. Ruben, head of European Economic research at bank of america. Next up, well talk about tech. Netflix shares took a hit after a disappointing subscriber forecast. Well discuss that next. This is bloomberg. Anna welcome back to the European Market open. We still have over 35 minutes to go until the start of the european trading day, and weve got European Equity markets looking a little bit positive at the start of trade, but no great catalyst for any move higher. We do see s p futures improving attached as we move to the open. Perhaps this is the Bank Earnings season that we have that. In the nordics, we have seen different numbers coming through. One of the drivers allowing businesses in that region to benefit, actually a rebound in the underlying economies they are exposed to. Thats what we see figure of, euro stoxx 50 up three tents of 1 . Elsewhere 3 10 of 1 . Us how farit tells through their covid crisis we are. Interesting to hear the Morgan Stanley ceo talking about a disconnect between the underlying economy and what were seeing in stocks. We didnt think so because of the way the Banking Sector has actually seen its profits fall, even if may not as badly hit as some sectors. He doesnt think his business was particularly badly hit, in that sense. Lets get some of that Business News for you with a Bloomberg Business flash. Virgin atlantic is preparing to return to the skies next week, although it doesnt see travel demand previrus levels for at least three years. Fresh from a 1. 5 billion dollars rescue package, the carrier will resume flights to hong kong, l. A. , and new york, but says u. K. Quarantine restrictions means basically essential travel only. Corporate demand will take time to recover. Theres no doubt about it. And aviation will take time to recover. We do agree with most that think it will take at least three years to get back to 2019 levels. Anna recovery in demand late in the quarter spared daimler as losing as much money as analysts were expecting. Preliminary a deficit of 1. 68 billion. The country warns businesses returning unevenly, with car sales coming back more slowly than north america or china. Netflix shares plunged after it delivered a disappointing subscriber forecast. The largest paid streaming service expects to sign up just 2. 5 million users in the first quarter, less than half the number expected by wall street. Netflix also has a coceo after promoting the chief content officer to work alongside current ceo Reed Hastings. Interesting to see the move and netflix shares after hours was to the downside, but the nasdaq futures actually pointed upwards, up a 10th of 1 . The broader u. S. Picture looks broader, up 3 10 of 1 . To add riskit time aftertax rallies stalled thursday . We talk with bnp paribas about why they are optimistic for an upgrade. Thats next. This is bloomberg. 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The situation in the u. S. And china, the middle east and russia. A strong europe also means countries lagging behind in terms of reforms need to step up again. Into the summit, you are always presented as the bad guy. Guess youre feeling is you are fighting for your taxpayers ultimately. I am fighting for europe which is in the interest of everyone including the dutch citizens. A strong europe which is economically more competitive and can play with confidence a strong role on the world stage. You disagree with the idea it does not feel like that at the moment. [indiscernible] well, this is about the technicalities around the governance and im going to tell you about that afterwards. [indiscernible] , i dont want that. If they want loans and even grants, it is highly illogical that i can explain to people in the netherlands and other countries that in return, those reforms have taken place instead of only assurances that they will take place. [indiscernible] the rule of law for us is key. Voting. Majority the Commission Proposal has already been scaled down. Lengthed to debate at what it will look like. But i do not think it is possible to water down further. That is impossible. [indiscernible] this is hard wor