Be risk on. The cash trade, less than an hour away. Here are your headlines. Big attack its even bigger. Alphabetacebook, and tune to techsumers to solve the problems of a global lockdown. The French Economy shrinks 13. 8 or after an increase in jobless claims shows the recovery is in shaky ground. Ibar, bnp arab are par beats all but one of the big wall street banks. Just an hour from cash trading. Lets look at futures. Futures futures, u. K. Are down but only slight moves. Nothing material. Nothing to show us what kind of direction we can expect. Futures right ww, if you take a look at the eif screen, also slightly mixed this morning. Of working slew earnings news. I will kick it off right now with natwest. Impairment charge of 3. 54. 5 billion pounds. Expecting less than one billion. In the Second Quarter, more than doubled the impairment charge for the full year. The company expecting at least possibly up to 4. 5 billion. The operating lost was 770 million pounds. Have iag asyou well. The first one we should go through is the red headline. A capital increase. It was mentioned last week. Going toif this is happen. One thing, the Second Quarter revenue came in at 703 million euros. Loss was less than the street was expecting. A little bit better for iag. Their business was at a near freeze due to the pandemic. They say it will take until 2023 for demand to recover. That is similar to what we heard from some of the airlines in the midst rates. It is going to take years, not months for the airlines to recover. That is bad news. We know there have been layoffs around the world at airlines. News frome to get bad the airlines. Out as well in the bloomberg terminal, cutting 4. 55000 positions. Seeing negative. It has been a horrible year for airline employees as they are fired in every company. Managed to retain employees. We do see some like ryanair that have managed it. I am sure even they are going to be allowing some out by attrition. European futures makes a little bit, pointing slightly down as we look ahead to the euro area economic data. The s p 500 and the u. S. Closed lower as data showed the economy had the sharpest contraction on record. Much worse than the european contractions we are seeing. More than 30 contractions for the u. S. Here in germany, we are looking at 10 . Still bad, but not nearly as bad. That is why maybe we see so much euro strength. Lets bring in mark. You had a great piece out on all , medium to longer term traders should be long in the euro. You think it is going to 130 . The big changing moment when was when we got the announcement they would have this Recovery Fund. They said it was a complete game changer. It was opening up the idea of burden sharing. The biggest change since the fall of the berlin wall. We have had the Recovery Fund in europe, we have this big divide in the west. It is going to emphasize the dollar thing. We have the whole pandemic where it is largely contained in europe. The uptick is nothing compared to what we are seeing in the u. S. , and ongoing deterioration. The the specs are long on dollar. The world is very long in dollars themselves. Up by thet backed share of the global economy. Come down is going to over time. The most important thing in the short term is the fact that the u. S. As an economy like so many others in the developed world. Deeply negative rates are an established part of the norm. That is a new paradigm. It has not been the case for many years. The fed has solved the liquidity problem. We are not going to see the funding squeeze. The picture is strong on a longerterm basis. On a shortterm basis, specialized traders will go but longterm, this is going much higher. Are policymakers going to be concerned about that . Are manufacturers going to see the benefit . Europe is a massive export zone. We are seeing that theme. European equities have really suffered. Even though supposedly the story theetter in europe rate Second Quarter was not as bad. We are seeing a better containment of the virus. European equities are laggards. One of the issues is we are where a complete change currency strength is. The ecb has fought to keep the euro week. They are going to lose that battle. The dollar is so negative. That is going to be a concern for european manufacturers, yes. The techo us about earnings. Is this the end of the good news . What do you say is in store for august . Great numbers overnight. Kindannot deny the recent of picture from the u. S. Has been positive from earnings. And from the bill whether names. We know the central bank has been supremely supportive. They are all in. They have rates, they are staying there for a long time. They have solved liquidity problems. They are pumping money into the system. What will they do during the drawdown . What did they have to look forward to . Nothing. That is what i want to ask you about. We see a resurgence of cases. The u. K. Is doing a partial lockdown of northern england. What if things start to get really bad . What is left for the fed or the u. S. Government to do . There is nothing the fed can do. The ny situation for where the u. S. Is stuck in a pandemic situation. The president ial election is on. Little bit of paralysis about how they act on the federal side. What can the fed do . Nothing, really. Next will be dramatic and will force some sort of reaction. The next weeks will be very bleak for u. S. Stocks. So much for joining us. Mark cudmore. Check out the blog. Coming up, the tech giants capitalizing on the pandemic. Earnings surge for apple, amazon, facebook, and alphabet. Is that it . Only place u. S. Consumers are spending money . Is bloomberg. Welcome back to bloomberg markets. 40 minutes away from the start of cash equity trading. We see futures turning a little bit higher. They had been down. Although ftse futures have been up, they are increasing as well read german virus numbers have past 24by 989 in the hours. Lets get the first word newss. Go to laura wright in london. The economic rebound in the u. S. Is looking even shakier. Shrunk the most on record. The labor market is showing signs of strains. The number of people continuing to claim Unemployment Benefits rose by almost 900,000. It is something he does not have the power to do alone and would need the backing of congress. Mitch mcconnell says the date is set in stone. Lockdownsas reimposed across the north of england. Some britons have been failing obey social distancing measures. They will no longer be able to meet indoors with people from other household read global news, 24 hours a day. Powered by more than 2700 journalists and analysts and 120 countries. This is bloomberg. Biggest tech company saw earnings surge during the pandemic. While the rest of the economy is being hammered. Quarter were Quarterly Results beat expectations as the county capitalized on the crisis. Net income of 29 billion, a three month ending late in june. Is this as good as it gets for u. S. Stocks . Lets ask our next guest. He joins us now. Good morning, thank you for joining us. One analyst put it yesterday, it is the tech world and everyone else is just paying rent. Is this as good as it is going to get . Phrase low use the out quarter. Apple, amazon, facebook, they are in a fitting from the shift to ecommerce trend. Seen that in the outperformance of the names this year. We think the trends will continue. We are seeing interesting opportunities elsewhere. Homeimprovement trends in the u. S. , etc. Well we agree the companies will benefit, we think investors need to be looking elsewhere. You expect a sharp rebound in Consumer Spending . Productsf the apple they were picking up on. Are they going to be buying the rest of the stuff in q3 and q4 . When you talk about Consumer Spending, we are taking a lot of take home things, diy. A lot more products being undertaken. That is benefiting retailers, the likes of home depot, etc. Sherwinwilliams come etc. There are other areas where you are seeing consumers spending money. Areas peoplee are need to be looking at. From a consumer perspective, we think there are other areas people could invest in. Wax diy. I saw that a lot in america. In. Le putting pools we see americans taking advantage of the low mortgage rates. One part of the data in the u. S. Has been right is the housing market. Should people be putting more money into real estate . Housing,ms of u. S. Activity has been stronger than we have expected. We have seen a rebound in home sales. There is a lot of pent up demand and supply remains limited. Low mortgage rates, almost as low as 3 . That is certainly helping. You are also seeing structural shifts as people look to suburban areas, larger houses. We think arrange of people can benefit from this. Home depot, some of the u. S. House builders have been doing well. There is a wide range of companies that can benefit from this housing activity you are seeing right now. I was thinking last night about the european equivalent to the companies that killed it. There really are not any. There is no european facebook. A netflix, european amazon, google. Giant google one worldwide. What about these other companies . Are you finding european equivalents to invest in . To home depot . To lows . That you think are going to do well . Find europeanto equivalents to some of those things. Certainly within the european area, we think there are opportunities in areas such as electric vehicles. We had numbers out of volkswagen which were interesting from our perspective. Electric vehicles is going to be an interesting area. A lot of new model launches. There are a lot of folks in tesla. You see that in the share price. Launches with volkswagen, etc. You are seeing stimulus patches. It directed to ev incentives. We think that is a good example, tesla versus volkswagen. A clear example of a u. S. Stock doing well on the backs of evs. There are companies in europe that can benefit. Hold that thought. Richard loves autos. We are going to talk more next. Now coming up, an alternative to tesla. Surgedtric car maker has 120 in the last two days. But is it too risky . We will discuss that next. This is bloomberg. Bloombergback to european open. We are looking at stronger and stronger gains in terms of european futures. We did see drops. Now we are seeing futures turn much higher. Ftse futures gaining 0. 5 . We were talking about tesla and electric cars. The yield incredible rise we have seen in tesla stock has made it a Retail Investor darling. In some places in twitter, absolutely hated. It has many looking for similar opportunities. Chinese rival condi has surged 120 . The same type of investors might be behind the move. Havethan 34,000 added the stock to their portfolios. Do you like tesla . Do you still like tesla . Are you looking for other stocks that might be similar . Tesla share price has been remarkable in many ways. They are very much at the forefront when it comes to electronic vehicle innovation. We think there are other companies that have scale, dedicated platforms, that we think investors should look at. We talked about what government has been doing. We are really seeing that now, particularly out of european countries. This is about trying to bridge the affordability gap for consumers in terms of buying evs. It is critical in terms of Companies Meeting co2 targets. Yes, they are going to do well with the model three sales. It is going to be a big year in many ways in terms of new model launches. There is a big supply chain, not just auto manufacturers. There are Semi Conductor manufacturers, battery makers as well. Thes not just about carmakers. There is a big supply chain at play. Speaking of the supply chain and what we are seeing in the electric car market, do you think the pandemic has moved aong the Energy Transition at rapid rate . Do you see investors interested in getting their hands on anything with esg exposure . Investors are getting more interested. You are seeing governments directing funds toward this. Whether it is the european Recovery Fund, which is earmarked in terms of building efficiency investment, joe biden, he came out with a climate plan which targeted funds toward energy efficiency. It is not just hype. You are seeing governments start to direct stimulus toward this. We think that is why this tailwind we are seeing could continue. For us, it is about being selective. The hvacn some of companies, that is another area where you could see some investments tailwinds. If you pull up on the bloomberg, you can use a command on any equity. It shows you the supply chain. Enough, not only names like panasonic, continental, like you would. Xpect also glencore rio tinto. He is a fund manager for Global Equity income. Eally appreciate your insight fascinating points in the electric carmaker supply chain and joe biden. Taking off. Ot quarterlying a record loss. Meanwhile, the iag parent saying it needs to raise more capital. This is bloomberg. Good morning. We are 30 minutes into the start of cash equity trading. A look at some of todays key events. We will get data from the euro area. Analysts expecting the economy to contract by 12 in the Second Quarter. We will also get inflation for italy. Headlines expected to increase a touch as downward pressure from Energy Prices alleviates. Theybil reports announced they are maintaining cash dividend. Fiat chrysler expected to post a tough quarterly result. North america may have been more resilient than expected. A lot of autos to look out for. I will look to see what exxon mobil posts. A lot to look forward. Fiat chrysler teased a jeep wrangler. Have written the company to ask them to please do it. Lets get an update on those sectors that have been hit by the coronavirus lockdown measures. Air france, klm, posting a record loss. Beforey it will be 2024 capacity returns to normal. 2023. H airways said for klm, maybe another year longer. Raise 2. 7hey need to 5 in euros. Lets talk first about the recovery forecast here. It isy airlines have said not going to be a secondhalf recovery but it will take years. Theme we have seen emerge. There was a raised maybe a month ago where there was some optimism demand would return, particularly in the short ro utes. That has evaporated in the last couple of weeks. We have seen people cancel. Feed back the industry. We have heard from airbus. Saying then body, recovery will take years. We are hearing from air france 2024 is an optimistic target for recovery. A lot of people have really changed booking behavior. Late of people are booking and canceling. Being able to plan is very difficult. Iag, slightly more optimistic. About whether they have a target they can maintain or whether they have to revise them. To the industry, klm cutting up to 5000 positions. This comes on top of the industry cutting 400,000 jobs. Either they were fired or furloughed. What at the end of this pandemic you see as the loss of an limit to the industry . There will be fewer people in this industry. From airbus. They said they would cut thousands of jobs. Lufthansa, which like air france and klm, received bailouts. There is only one way to get through this. That is to cut costs. Ground your aircraft or get rid of employees or both. Raise fresh funds as we heard from iag. They are increasing money. Arer airways, they achieving they announced they in spain. An airline they want to renegotiate the price tag. They only want to pay about half of that. Ways,e seeing creative less creative in terms of job cuts, airlines trying to cut costs. When i flyy, vacation,for work or im going to look for a hotel to stay in. Restaurants to check out. Beenss that industry has pummeled at the same level as the airlines. Absolutely. Restaurants are really struggling in the u. S. Thanbly even more dramatic over here. At least where we live in berlin, we returned to some degree of normalcy. We can go out, we can dying. Indoor dining in many places. That has not returned to that degree in the u. S. Or places like austria. We are going back to a second phase of lockdowns. That is keeping people at home, private and them of their normal lives. They are not going out, they are not booking travel. We have seen an increase in local vacations for people who say i am going to rent out a camper van. Or go somewhere local. You are not seeing these typical longdistance or even mediterranean holidays that typically would form the background backbone of this industry. This is the time of year where these Companies Make money. They make money so they can make it through a cold winter. Youre probably going to see a bigger shakeout in the months ahead we do not even know about. Thank you so much. It is a good point. Google, their ad spending was down because they are so heavily exposed and relying on the advertising you get from the hospitality and airline industry. Thank you so much. Bnp paribas has reported a blowout performance. All but one of the this will allow the french lender to move past embarrassing losses. The ceo was asked if they would maintain guidance in the event of a surge of coronavirus cases. We anticipate there will not be a second nationwide rollback. We should look at the results of this quarter and the first six months. It is in line for us to confirm. Was d income activity it is up 100 54 . This exceptional market volatility will be less in the coming months . It is an issue, institutional but also sovereigns. It is probably above normal. To serveas we are able customers, because of our strong financials, of all the financials we have, we have oath the market share. Being there for clients. Weis something we anticipate will keep on having in the second half. French Retail Revenues are down 11. 8 . It is worse than our estimates. Anticipate a recovery there . Impact had an impact, particularly in april. If you look at the activity, the number of activities, credit card transactions, demands for loans, in june, it basically tapered off to levels precoronavirus. The runway would be tapering up to the normal amount. To the precrisis levels. Have seen a pickup in activity. Yes. When you anticipate the full recovery . Can you give us more on this . There is a pickup in activities. It is faster and some, slower than others. As we said, if you look at the overall pickup, before it is back to the level, we dont think that will happen before 2022. Holde ecb recommended to off payments until the end of the year. To followibas willing the recommendations . Supervisory authorities extended their recommendation not to pay dividends until the end of the year and we will comply. This recommendation will not be accepted. There is a return to normal. Regulatory rules are applicable precovid. Return tod be able to their planned policies. In this case,