Transcripts For BLOOMBERG Bloomberg Markets European Open 20

Equity futures after a negative close on wall street. Headlines fromop the bloomberg terminals. Better than feared. The German Government expects this years contraction to be less severe than previously forecast. The economy minister presents new forecasts today amid data from across the region. For more years . Jpmorgan says investors should position for rising odds of donald trump winning the reelection as the president visits kenosha, wisconsin. Apples production glitch. They asked suppliers to build at least 75 million 5g iphones for later this year in a sign that demand is holding up. Just under one hour away from the start of cash trading across europe. Lets take a look at what futures are showing yesterday after we closed yesterday down across the board in europe. We are now seeing futures rise. The ftse didnt sure cash in the futures are down. Index seeing the equity closed down with trading higher. Since the ftse missed out on the drop its futures are trading lower. We have green arrows and the nasdaq is looking at one set and 2 10 gains. Closewe saw the ftse because of the holiday. To see thatesting divergence on wall street between the tech stocks and the others. Some of the tech stocks on the dow being weighed down by the sign of politics. Lets have a look at where we are in the asian session. Weaker on australian stocks. Not a great well a reaction leading to the rba rates unchanged. Stocks going higher. Expectation of fiscal stimulus to some extent coming through. The Indian Markets seem fairly active. We got movement. Rupee and the indian fiveyear as we see india increasingly becoming the new epicenter of the coronavirus. Really one of the big trends is we see a lot of fx in the greens. Is dollar big ones weakness. We will continue to discuss that with some of our guests. Dollar is more than a twoyear low. The euro very close to about 120 level. How worrying will that be for policymakers . We keep an eye on whats london market the closing yesterday. Lets get a bloomberg first word news update. Laura o laura wright. Be biden rejects claims will americans will be less safe under a democratic legislation. President forthe putting violence across the country. Investors think the president will win the reelection. The pull is now nearly even and thats largely due to the impact of recent violence on Public Opinion. And potentially also by in the poll. Germany does not expect the economic fallout of the coronavirus to be as bad as thought. Onrces told the bloomberg the updated forecast to be officially officially resumed today. They have staged a revamp after the second quarter. Global news, 24 hours a day on air and at Bloomberg Quicktake powered by more than 2700 journalists and analysts in more them 120 countries. This is bloomberg. Wright in london with your first word news. The spinoff of the Energy Business is said to be completed at the end of this month. Its the latest move in the transformation of the german engineering giant. The Energy Division is said to be targeting plant closures to cut costs and improve earnings after the listing. Joining us to discuss more is christian brooke, the Siemens Energy ceo. Thise first ask you about reuters report that says he will look to cut production to raise margin. Can you tell us where we are going to see cuts. Is it inside of germany or outside . Good morning. It is a pleasure to be with you for our firstday Capital Market day. Ill investors and to the markets. We have been discussing the analysis that would drive efficiency programs to get better costs. We are doing this at the moment and we are halfway through the Improvement Program and the restructuring program. We have already closed around 25 sites. We will look into these type of measures. Nothing additional, but this is what we continue to really look into once we drive our portfolio. Which i woulding call an evolutionary process. We are working on a cost base profitability. Where do you see cuts being focused right now . I we looking at cuts inside germany or outside of the country . Its also been reported that you wont agree or wont attest to the agreement that allows unions to have a say on the plant closure . Think if you talk about costs, we dont always talk about people costs. We talk about things like driving logistic costs down. There are multiple elements. What we see at the moment is a relatively complex logistic for certain products. This is what we want to get rid of. The other thing is, what does it mean . Other changes are happening in the market. Is it something we are looking at at the moment . We are working this out. There is no detailed plan at this point in time. We have to take our time working through the stepbystep. With regards to the discussion havee agreement that you referred to, this is the agreement that belongs to siemens, which will not immediately be taken over. At the same time, we are highly interested. Everything that we are doing an agreement and in coordination with our representatives. We want to drive a profitability of the company. We want to serve our customers and be successful. One thing that is also clear is Siemens Energy is a peoples business. We are depending on people who have the knowledge. This is what we are trying to balance out. Sitting at the same time we do have the Energy Market forming which we will continue to work on ourselves and transform ourselves and we think our people understand is very well as we continue to work on this. Morning, youve got your Capital Markets taking place today. You have honed in on that sales pitch. What do you see as being the most important reason for investors to consider investing in your business an ipo . There is a couple. A really we are focused energy company. If you look across the market you will hardly find any company that cuts across from. Onventional over to renewals they cover generation of electricity and transition of electricity. The energylly what is about. Comprised of under 50 years of Energy Technology. Its an enormous amount of capabilities. Measurellows us to operational performance. But what we are having is a mirror up to date Energy Technology. Keen for our are customers to be in a more sustainable world. We have a lot to offer. I see it with discussions with the company. Customers. They really want somebody who understands the whole Energy Technology on how to get to a more Sustainable Energy world. This is why we believe we have a good market position to drive this forward. And its also our story that we will explain today to the investors. Anna you say you are a mirror of todays Energy Market. Are you a mirror of tomorrow . Some investors might prefer to go for a Green New Energy pure place somewhere else rather than a business that mixes the new and the old as you do. I am a strong believer that it is requiring the solution to shape the energy world. I also strongly believe we will need this for some amount of time. I think we all agree on the finer target. We to build the Sustainable Energy world. If you see that today, electricity production is based 30 on coal, 30 on natural gas, 10 on natural gas and win. It is important we provide solutions today. I believe there is a lot of value of which you can generate provide this in terms of solutions with a more proficient technology to combine that are restored for generation technology. I am talking steps about, which will improve the sustainability of electricity generation. I think there is a lot of value to generate. This is why i believe it is a good offering to have such a only portfolio i not convince our customers, but also the market on the set up. Matt can i just ask you about the covid19 pandemic . We saw a real hit to Energy Demand in april. A recovery since then. What is your view on demand from here on out . Incould see we could be the midst of a second wave, we could see a third wave. This could be something that sticks with us for a while. Christian nobody exactly knows on how the situation will be going forward. I am extremely proud and pleased to see what the Energy Organization has done over the past month on how to manage corona crisis. Runningeeping customers and keeping the lights on. We had no bigger cancellations during corona, which made us relatively resilient. You will see an impact on our numbers as we present them in the market. Assume there is a terms on the impact of the and it slowly recovers. It is our assumption at the moment, obviously not really exactly knowing how it will be going forward. But in the midterm we believe does not impact the expectation on the growth in the electricity market. Anna thank you very much. With thegood luck Capital Market. The ceo of Siemens Energy. Past 8 00 if you are in paris and berlin. Makes after tech pushes the nasdaq for another record. How long can the rally last . Anna welcome back to the European Market open. 45 minutes until the start of the equity trading session. Futures looking makes because the london markets were closed. The ftse futures look negative. The rest of europe is taking. Lets talk about that. Hit september mixed after they push the nasdaq to another record. The dollar extends records to trade at its lowest since may of 2018. And the euro is leaving the chart against the greenback approaching the closely watched 120 level. We are at 11988 as we speak or a lets get into the markets for that conversation. Our Bloomberg Markets live editor. We will come to fx in a moment. Let me ask you about the nasdaq. We can keep asking this daily. How far can tech stocks rally . What difference could a stock split make . We keep asking this question every day and it keeps being like groundhog day. We get in the same environment with a lot of scares and new u. S. china tensions in new domestic china political issues. Every day we are climbing higher to a fresh record. Its hard to see what will the rail the rallies given that we have overcome such extreme and difficult hurdles so far. I think it is important to stay out of that mindset and not just give up and not become complacent about those risks. At some point evaluations valuations keep on getting more and more stretched. At some point there will be a tipping point. It may be minor and everyone goes, wait a second, thats when there will be a correction. Do you want to rise with the inflation of the bubble or ride the rally . My own personal view is, i got the turning point wrong. I thought it was coming for weeks ago and it did it. Up almost 6 . I do think there is a very poor risk as china rides the rally from here. I am just not going to try calling the timing of it. Work outm loving the of the bloomberg offices out of the u. S. Pointing out that a lot of investors are seeing these tech stocks as a defensive play. Its easy to understand when you look at apples books and see that it has 200 billion of cash piled up. Do you see any value to that that this is really a for aive play, the same lot of investors as gold or yen would be . Mark theres a lot of it will it be but it has there is a there hasidity but some flaws. There are certain tech stocks that are more defensive than the name of tech might imply. You also have tesla. Tesla is very far from the safe haven asset. Even amongst the other safe haven names, there is extreme valuation valuation relative to cash flow. A few names have massive cash piles and are more defensive. We have treated that for a long time. Think it was a valid team. Not only was their cash flow, but there was beneficiaries of the whole coronavirus pandemic in the work from home environment. Now we have priced that in many times over. These names are particularly vulnerable as apple, it wont be the most vulnerable when a correction comes, but there are other tech names. Many others that have ridden the nasdaq rallies regardless and they are not safe haven trades. Mark, what about whats going on in fx markets. Being,lar weakness theres the 120 level. The ecb said she was not worrying too much about the fx markets at this point. At some point the ecb starts to get worried. When interests you about this dollar weakness story . Mark i think the strong euro is proving a problem. It is lagging already. Fx market ishe probably the most interesting. As someone who is in that mindset of what might be the broader turning point and what might be the catalyst. Ethics markets are one spot that is attracting attention. Not because we are seeing the extreme positions, record positions in the euro. With thedollar was dollar short. But there are dollar shorts across the board. We have that really extreme positioning. Be the turning point. It might be the crux. There is this assumption that 120 was going to trade to 119 wanted 119, 197. It is not going anywhere because there are so many barriers wide lined up above 120. All between 120 and 122 from wealth funds. N the idea is to go smoother of what happened in the 2000. Manyailwind also climbed big figures. The longerterm rally was justified. Shortterm is a real difficult moment. People will just keep going higher and that it will fail. All the stocks have been triggered. People have priced into much expectation of trading above. The pullback causes a painful shortterm correction. That could be the catalyst that spills over to other markets. Fx is veryatching closely and eurodollar in particular. If we start trading wrap trading back, that could trigger into the markets. Matt thank you for joining us. Mark cudmore runs our bloomberg mliv team out of singapore. Better than fear. The German Government expects this years contraction to be less severe than previously has been forecast. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Close 37 minutes from the and we are seeing futures that are higher for European Equity indexes and lower right now for the ftse because the ftse did not close so its playing catchup. Kind of a mixed picture. Here in germany the government does not think this years contraction will be as bad as it previously had estimated. Thats according to a person familiar with updated forecasts that are going to be published later this morning. We will get germanys latest , as well as figures manufacturing pmis from across the region. Joining us now is the chief economist at thank you for joining us. Let me first get your take on how germany has dealt with we dont know what their new forecasts are going to be, but i guess its not really surprising that its going to look better than they had expected because germany sort of pulled all the stops when it came to stimulus, as well as the program they have had in place, even the model for this kind of pandemic. I would add the changes with with theo the results economic effects that will only be visible as of the second half of next year. In addition we should also mention that china is doing quite good. All things considered. This is also beneficial element for germany. Good morning to you. We have seen the mechanical rebound in pmi we are going to get a sways of data around today. What should we watch for in terms of the narrative of what this data is really telling us at this stage of our rebound out of the lows of the pandemic . The question is whether the the jump that they have gone through and continue its a goodiously question because they have a big impact for market sentiments. Lets keep in mind that the pmi question is how do you feel about last month, better or as it is also for germany or the European Commission indication. Which is a better picture of where we are in level terms in terms of corporate confidence. And the good news in germany is that last week we saw great things. Business sentiment. And ther market automobile sector has seen improvements. Its pretty good now. Anna stay with us. William stays with us on the program about his thoughts on europe. We will get into his thoughts on tech stocks. Apples appeal. The company gets ready to deliver its nextgeneration iphone. Having suppliers build at least 75 Million Units. We will look at how demand for the product has held up through the pandemic. This is bloomberg. Matt welcome back to Bloomberg Markets european open. There 30 minutes away from start of cash trading. We are looking at futures that are down a little in terms of the ftse. A little bit of a mixed picture leading towards gains here. William is still with us. In terms of markets, there has been so much talk about the tech heavy u. S. Indexes that are rising, up 10 year to date versus indexes in europe that are down 20 year to date. I wonder if beyond the money aspect of it tech friends here in europe is a problem for economic development. Are we in an environment in europe that just does not foster the growth of new companies as well as, say the west coast of california . Is that a problem for europes economy . William it is an issue when you are looking at the commission and plan and proposal to boost the economy. You are looking at what is a necessity to technology and the likes. This is already one illustration of the issue that we have. We have a lot of companies in europe and one of the things that are striking is that when you need to go to the stage it becomes a bit more problematic are lookingns they outside and to find money between asia and the u. S. That activity can shift to the east coast of the world. Thatoncern that i have is the true value added as the Company Grows will then happen outside of europe. Tot is why its so important boost our technological innovation capacity here. Anna i was looking up some comments from bernstein talking about how they have low Interest Rates that would mean we see a continuation of share buybacks in the tech sector. That would continue to push the tech sector higher. My colleague sent me this. What is your expectation for low that feedates, will into the tech rally . That is something we heard from jay powell. The big change in the way they think about inflation. Of course low German Government<\/a> expects this years contraction to be less severe than previously forecast. The economy minister presents new forecasts today amid data from across the region. For more years . Jpmorgan says investors should position for rising odds of donald trump winning the reelection as the president visits kenosha, wisconsin. Apples production glitch. They asked suppliers to build at least 75 million 5g iphones for later this year in a sign that demand is holding up. Just under one hour away from the start of cash trading across europe. Lets take a look at what futures are showing yesterday after we closed yesterday down across the board in europe. We are now seeing futures rise. The ftse didnt sure cash in the futures are down. Index seeing the equity closed down with trading higher. Since the ftse missed out on the drop its futures are trading lower. We have green arrows and the nasdaq is looking at one set and 2 10 gains. Closewe saw the ftse because of the holiday. To see thatesting divergence on wall street between the tech stocks and the others. Some of the tech stocks on the dow being weighed down by the sign of politics. Lets have a look at where we are in the asian session. Weaker on australian stocks. Not a great well a reaction leading to the rba rates unchanged. Stocks going higher. Expectation of fiscal stimulus to some extent coming through. The Indian Markets<\/a> seem fairly active. We got movement. Rupee and the indian fiveyear as we see india increasingly becoming the new epicenter of the coronavirus. Really one of the big trends is we see a lot of fx in the greens. Is dollar big ones weakness. We will continue to discuss that with some of our guests. Dollar is more than a twoyear low. The euro very close to about 120 level. How worrying will that be for policymakers . We keep an eye on whats london market the closing yesterday. Lets get a bloomberg first word news update. Laura o laura wright. Be biden rejects claims will americans will be less safe under a democratic legislation. President forthe putting violence across the country. Investors think the president will win the reelection. The pull is now nearly even and thats largely due to the impact of recent violence on Public Opinion<\/a>. And potentially also by in the poll. Germany does not expect the economic fallout of the coronavirus to be as bad as thought. Onrces told the bloomberg the updated forecast to be officially officially resumed today. They have staged a revamp after the second quarter. Global news, 24 hours a day on air and at Bloomberg Quicktake<\/a> powered by more than 2700 journalists and analysts in more them 120 countries. This is bloomberg. Wright in london with your first word news. The spinoff of the Energy Business<\/a> is said to be completed at the end of this month. Its the latest move in the transformation of the german engineering giant. The Energy Division<\/a> is said to be targeting plant closures to cut costs and improve earnings after the listing. Joining us to discuss more is christian brooke, the Siemens Energy<\/a> ceo. Thise first ask you about reuters report that says he will look to cut production to raise margin. Can you tell us where we are going to see cuts. Is it inside of germany or outside . Good morning. It is a pleasure to be with you for our firstday Capital Market<\/a> day. Ill investors and to the markets. We have been discussing the analysis that would drive efficiency programs to get better costs. We are doing this at the moment and we are halfway through the Improvement Program<\/a> and the restructuring program. We have already closed around 25 sites. We will look into these type of measures. Nothing additional, but this is what we continue to really look into once we drive our portfolio. Which i woulding call an evolutionary process. We are working on a cost base profitability. Where do you see cuts being focused right now . I we looking at cuts inside germany or outside of the country . Its also been reported that you wont agree or wont attest to the agreement that allows unions to have a say on the plant closure . Think if you talk about costs, we dont always talk about people costs. We talk about things like driving logistic costs down. There are multiple elements. What we see at the moment is a relatively complex logistic for certain products. This is what we want to get rid of. The other thing is, what does it mean . Other changes are happening in the market. Is it something we are looking at at the moment . We are working this out. There is no detailed plan at this point in time. We have to take our time working through the stepbystep. With regards to the discussion havee agreement that you referred to, this is the agreement that belongs to siemens, which will not immediately be taken over. At the same time, we are highly interested. Everything that we are doing an agreement and in coordination with our representatives. We want to drive a profitability of the company. We want to serve our customers and be successful. One thing that is also clear is Siemens Energy<\/a> is a peoples business. We are depending on people who have the knowledge. This is what we are trying to balance out. Sitting at the same time we do have the Energy Market<\/a> forming which we will continue to work on ourselves and transform ourselves and we think our people understand is very well as we continue to work on this. Morning, youve got your Capital Market<\/a>s taking place today. You have honed in on that sales pitch. What do you see as being the most important reason for investors to consider investing in your business an ipo . There is a couple. A really we are focused energy company. If you look across the market you will hardly find any company that cuts across from. Onventional over to renewals they cover generation of electricity and transition of electricity. The energylly what is about. Comprised of under 50 years of Energy Technology<\/a>. Its an enormous amount of capabilities. Measurellows us to operational performance. But what we are having is a mirror up to date Energy Technology<\/a>. Keen for our are customers to be in a more sustainable world. We have a lot to offer. I see it with discussions with the company. Customers. They really want somebody who understands the whole Energy Technology<\/a> on how to get to a more Sustainable Energy<\/a> world. This is why we believe we have a good market position to drive this forward. And its also our story that we will explain today to the investors. Anna you say you are a mirror of todays Energy Market<\/a>. Are you a mirror of tomorrow . Some investors might prefer to go for a Green New Energy<\/a> pure place somewhere else rather than a business that mixes the new and the old as you do. I am a strong believer that it is requiring the solution to shape the energy world. I also strongly believe we will need this for some amount of time. I think we all agree on the finer target. We to build the Sustainable Energy<\/a> world. If you see that today, electricity production is based 30 on coal, 30 on natural gas, 10 on natural gas and win. It is important we provide solutions today. I believe there is a lot of value of which you can generate provide this in terms of solutions with a more proficient technology to combine that are restored for generation technology. I am talking steps about, which will improve the sustainability of electricity generation. I think there is a lot of value to generate. This is why i believe it is a good offering to have such a only portfolio i not convince our customers, but also the market on the set up. Matt can i just ask you about the covid19 pandemic . We saw a real hit to Energy Demand<\/a> in april. A recovery since then. What is your view on demand from here on out . Incould see we could be the midst of a second wave, we could see a third wave. This could be something that sticks with us for a while. Christian nobody exactly knows on how the situation will be going forward. I am extremely proud and pleased to see what the Energy Organization<\/a> has done over the past month on how to manage corona crisis. Runningeeping customers and keeping the lights on. We had no bigger cancellations during corona, which made us relatively resilient. You will see an impact on our numbers as we present them in the market. Assume there is a terms on the impact of the and it slowly recovers. It is our assumption at the moment, obviously not really exactly knowing how it will be going forward. But in the midterm we believe does not impact the expectation on the growth in the electricity market. Anna thank you very much. With thegood luck Capital Market<\/a>. The ceo of Siemens Energy<\/a>. Past 8 00 if you are in paris and berlin. Makes after tech pushes the nasdaq for another record. How long can the rally last . Anna welcome back to the European Market<\/a> open. 45 minutes until the start of the equity trading session. Futures looking makes because the london markets were closed. The ftse futures look negative. The rest of europe is taking. Lets talk about that. Hit september mixed after they push the nasdaq to another record. The dollar extends records to trade at its lowest since may of 2018. And the euro is leaving the chart against the greenback approaching the closely watched 120 level. We are at 11988 as we speak or a lets get into the markets for that conversation. Our Bloomberg Markets<\/a> live editor. We will come to fx in a moment. Let me ask you about the nasdaq. We can keep asking this daily. How far can tech stocks rally . What difference could a stock split make . We keep asking this question every day and it keeps being like groundhog day. We get in the same environment with a lot of scares and new u. S. china tensions in new domestic china political issues. Every day we are climbing higher to a fresh record. Its hard to see what will the rail the rallies given that we have overcome such extreme and difficult hurdles so far. I think it is important to stay out of that mindset and not just give up and not become complacent about those risks. At some point evaluations valuations keep on getting more and more stretched. At some point there will be a tipping point. It may be minor and everyone goes, wait a second, thats when there will be a correction. Do you want to rise with the inflation of the bubble or ride the rally . My own personal view is, i got the turning point wrong. I thought it was coming for weeks ago and it did it. Up almost 6 . I do think there is a very poor risk as china rides the rally from here. I am just not going to try calling the timing of it. Work outm loving the of the bloomberg offices out of the u. S. Pointing out that a lot of investors are seeing these tech stocks as a defensive play. Its easy to understand when you look at apples books and see that it has 200 billion of cash piled up. Do you see any value to that that this is really a for aive play, the same lot of investors as gold or yen would be . Mark theres a lot of it will it be but it has there is a there hasidity but some flaws. There are certain tech stocks that are more defensive than the name of tech might imply. You also have tesla. Tesla is very far from the safe haven asset. Even amongst the other safe haven names, there is extreme valuation valuation relative to cash flow. A few names have massive cash piles and are more defensive. We have treated that for a long time. Think it was a valid team. Not only was their cash flow, but there was beneficiaries of the whole coronavirus pandemic in the work from home environment. Now we have priced that in many times over. These names are particularly vulnerable as apple, it wont be the most vulnerable when a correction comes, but there are other tech names. Many others that have ridden the nasdaq rallies regardless and they are not safe haven trades. Mark, what about whats going on in fx markets. Being,lar weakness theres the 120 level. The ecb said she was not worrying too much about the fx markets at this point. At some point the ecb starts to get worried. When interests you about this dollar weakness story . Mark i think the strong euro is proving a problem. It is lagging already. Fx market ishe probably the most interesting. As someone who is in that mindset of what might be the broader turning point and what might be the catalyst. Ethics markets are one spot that is attracting attention. Not because we are seeing the extreme positions, record positions in the euro. With thedollar was dollar short. But there are dollar shorts across the board. We have that really extreme positioning. Be the turning point. It might be the crux. There is this assumption that 120 was going to trade to 119 wanted 119, 197. It is not going anywhere because there are so many barriers wide lined up above 120. All between 120 and 122 from wealth funds. N the idea is to go smoother of what happened in the 2000. Manyailwind also climbed big figures. The longerterm rally was justified. Shortterm is a real difficult moment. People will just keep going higher and that it will fail. All the stocks have been triggered. People have priced into much expectation of trading above. The pullback causes a painful shortterm correction. That could be the catalyst that spills over to other markets. Fx is veryatching closely and eurodollar in particular. If we start trading wrap trading back, that could trigger into the markets. Matt thank you for joining us. Mark cudmore runs our bloomberg mliv team out of singapore. Better than fear. The German Government<\/a> expects this years contraction to be less severe than previously has been forecast. This is bloomberg. Matt welcome back to Bloomberg Markets<\/a> european open. Close 37 minutes from the and we are seeing futures that are higher for European Equity<\/a> indexes and lower right now for the ftse because the ftse did not close so its playing catchup. Kind of a mixed picture. Here in germany the government does not think this years contraction will be as bad as it previously had estimated. Thats according to a person familiar with updated forecasts that are going to be published later this morning. We will get germanys latest , as well as figures manufacturing pmis from across the region. Joining us now is the chief economist at thank you for joining us. Let me first get your take on how germany has dealt with we dont know what their new forecasts are going to be, but i guess its not really surprising that its going to look better than they had expected because germany sort of pulled all the stops when it came to stimulus, as well as the program they have had in place, even the model for this kind of pandemic. I would add the changes with with theo the results economic effects that will only be visible as of the second half of next year. In addition we should also mention that china is doing quite good. All things considered. This is also beneficial element for germany. Good morning to you. We have seen the mechanical rebound in pmi we are going to get a sways of data around today. What should we watch for in terms of the narrative of what this data is really telling us at this stage of our rebound out of the lows of the pandemic . The question is whether the the jump that they have gone through and continue its a goodiously question because they have a big impact for market sentiments. Lets keep in mind that the pmi question is how do you feel about last month, better or as it is also for germany or the European Commission<\/a> indication. Which is a better picture of where we are in level terms in terms of corporate confidence. And the good news in germany is that last week we saw great things. Business sentiment. And ther market automobile sector has seen improvements. Its pretty good now. Anna stay with us. William stays with us on the program about his thoughts on europe. We will get into his thoughts on tech stocks. Apples appeal. The company gets ready to deliver its nextgeneration iphone. Having suppliers build at least 75 Million Units<\/a>. We will look at how demand for the product has held up through the pandemic. This is bloomberg. Matt welcome back to Bloomberg Markets<\/a> european open. There 30 minutes away from start of cash trading. We are looking at futures that are down a little in terms of the ftse. A little bit of a mixed picture leading towards gains here. William is still with us. In terms of markets, there has been so much talk about the tech heavy u. S. Indexes that are rising, up 10 year to date versus indexes in europe that are down 20 year to date. I wonder if beyond the money aspect of it tech friends here in europe is a problem for economic development. Are we in an environment in europe that just does not foster the growth of new companies as well as, say the west coast of california . Is that a problem for europes economy . William it is an issue when you are looking at the commission and plan and proposal to boost the economy. You are looking at what is a necessity to technology and the likes. This is already one illustration of the issue that we have. We have a lot of companies in europe and one of the things that are striking is that when you need to go to the stage it becomes a bit more problematic are lookingns they outside and to find money between asia and the u. S. That activity can shift to the east coast of the world. Thatoncern that i have is the true value added as the Company Grows<\/a> will then happen outside of europe. Tot is why its so important boost our technological innovation capacity here. Anna i was looking up some comments from bernstein talking about how they have low Interest Rates<\/a> that would mean we see a continuation of share buybacks in the tech sector. That would continue to push the tech sector higher. My colleague sent me this. What is your expectation for low that feedates, will into the tech rally . That is something we heard from jay powell. The big change in the way they think about inflation. Of course low Interest Rates<\/a> for longer. Be mindful. A addition, there is also time for sure buybacks. The challenge for companies and management is to do whatever is necessary to justify these valuation metrics. That becomes the real issue. Cost controlt that of the information but also the share buybacks. Eventually what we will observe is although volatility looking backward has to be extremely limited would trade going, volatility can only increase because of sensitivity to minor events, minor pieces of news. If youre at the company level, it can only go up. Longer means that at some point they will have to slam the brakes to put it in a exaggerated way. But then sensitivity to the change will become all the bigger. Matt i want to ask one more question that touches on this tech bifurcation. Several banks are keeping rates low everywhere. And on the fiscal side, governments have different bridges to try to help the covid time for a economies. In countries like germany we have the program that is more stable and entrenched. I wonder if there is a concern that european programs like that are going to support Zombie Companies<\/a> more than the u. S. Programs do. And that europe will be further help back in this old economy right eye these programs that we see otherwise is so helpful during these times . That is a fair point. The question is do you want to with an economy that will off . Rack the view with the argument that there is a gigantic clenching affect going on. Or do you do the opposite end at some point it needs to be taken off and we have to come up with fosteringt is innovation . Thank you for joining us, good to speak with you today. Giving us his thoughts of whats going on in europe and the united states. We touched on tech. But stick with that theme. Apple and tesla climbing to record highs. We have just learned that apple has asked suppliers to build at least 75 million 5g iphones for later this year. Lets get more from Juliette Saly<\/a> who is in singapore. What is the gist of the story around apple . Bloombergs scoop showing that apple has asked its suppliers to make at least 75 oflion 5g iphones by the end this year. Pretty much on par with what they made in 2019 despite the fact that weve got the global pandemic, or perhaps in spite of it because we are all at home trying to stay connected and everyone is still upgrading. Many people are still upgrading their iphones. Have put upy several notices on we chat over the past months recruiting workers in china. So we obviously got a heads up about this. But apple will plan to launch for new models. Also looking at new products like new watch models, and a smaller, cheaper home pod. Lets look at how the supply chain did in asia. When you look at the supply chain function on the bloomberg. Initially we had weakness coming through, but has closed higher in taipei. The big moves came through in the taiwanese and south korean markets are you see the big suppliers, the likes of samsung as well. Albeit amidst a muted day in asia. Adbush analysts saying it is smart move what we are seeing apple do on the back of this blitz. But we also had a little bit of an interesting call in terms of what happens here in asia. Saying itintelligence is a bipolar market because you have this happening, but on the other hand you have these concerns about huawei and its suppliers. Matt and i love the spl see function. What are the top morning cause you are seeing . Over the big analyst calls out of your area . Out of my area there has been a lot on supply. Out of your area its about the euro and where we will see the euro trade as it tries to push towards 120. There is a lot of concern that if you see it at 130, then you can see that recent rally coming the move. That is actually the tesla market. We have been looking at this euro call. In terms of the risk that eurodollar positions could be unwound is the pear rises to that one dollar 20 level. They are saying the unwinding of speculated positions could be triggered by week pmi or cpi data. Seeing the euro trading at 115 to 10 12 range. We have seen it hit that 100 Day Moving Average<\/a> for the First Time Since<\/a> 2014, really trying to push towards a dollar 20. Matt Juliette Saly<\/a> there in singapore for a look at what you should be watching. Lets get the bloomberg first word news. President donald trump is planning to visit kenosha, where two protesters were killed. He suggested the man arrested over the shootings may have acted in selfdefense. The president ial rival joe biden slams the president for not calling out the teenager who has been charged with homicide. Morel trade is recovering quickly than after the 2008 financial crisis. Thats according to the institute for the worlds economy. It says shipping volumes are already back at levels that to more than a year to reach the collapse of newman brothers. Shouldtitute says that have a vshaped recovery. Argentina has widespread support to restructure. It paves the way for the nation in history. Investors holding all of the countrys international bonds. Argentina says this will generate 38 billion of debt relief over the next decade. Global news, 20 for hours a day, on air and at Bloomberg Quicktake<\/a> powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. My time lucky and argentina. Laura wright there in london with the first word news. Up next, ipos. , we look at the new m a status symbol next. This is bloomberg. Anna welcome back to European Market<\/a> open. Mixed througheen the night as we have to play catchup here in london because we were closed yesterday. Ftse futures still point to the downside. European equity markets in general expected to bounce up by a 10th of a percent. Factoring a percent on the nasdaq yesterday. Lets get it number is this flash with laura wright. Laura apple has asked suppliers five 75 the 75 million million 5g iphones this year. Demand is holding up amidst the pandemic. Sources tell bloomberg that tech they may reach as high as 80 Million Units<\/a> in 2020. They plan to launch for new units in october. Large scale human trials have been launched by astrazeneca. They are enrolling 30,000 adults to test the shot. The final stage test is underway in the u. K. And could yield the limitary results as soon as next month. It was developed by researchers at the university of oxford. The pictures of robin hood and other Online Brokers<\/a> faced results. Equities and cryptocurrency trading. Yesterday afternoon the issues have been fixed or it they hit Td Ameritrade<\/a> and vanguard. Thank you. Laura wright there with your business flash out of london. Bargain shopping platform wish has filed confidentially for an ipo. The u. S. Company was privately valued at more than 11 billion dollars. This follows a flurry of ipo activity in china were more than 20 companies came to market and produced three new members of the billion rich list as a result. But as the fortunes of the new wealthiest aluminum, the new bigmoney status symbol is the. Ocalled link check ipo a specialpurpose Acquisition Company<\/a> run by people from persians to the oakland as billy beam, who is a guy played by brad pitt in the awesome movie moneyball. They raised around 32 billion. By volume, they account for 40 of all ipo activity in 2020 despite having no real business to count on at the time of offering. Stacks spacs are the hot new thing. Its basically like bringing a private equity fund public, in a sense you are allowing public equity Market Investors<\/a> a chance to get in on a fund that will be run by people like red pit. I mean, billy bean. Anna yes, and others. Bitrs it may be a little more of a conventional market background. But he believes and people running these funds. If you think people will put money in this place, you might want to allow them to invested themselves. Head of the Capital Equity<\/a> market. Very good to speak to you. Risere talking about the of the special Acquisition Company<\/a>. I think it has other names. Do you see this as something of a trend that will continue . There is a lot of interest in stepping up these kinds of vehicles. Wide you think that is . Why do you think that is . There are three drivers. One is creating opportunities for m a to play out. I think secondly, it leads back to low Interest Rate<\/a> environments. And so the actual return, if they dont actual proceed to the actual m a, is quite is quite attractive and is a place to park cash. Thirdly comment on beneath it is individual who has specific expertise in one niche area. There is no doubt the last few months have seen this product move from being a niche product to being fairly mainstream. Matt how much of this do you think has to do with irrational retail exuberance . We are looking at alltime highs in the u. S. Where, for some reason Retail Investors<\/a> have just had this explosion maybe its robin hood, maybe thats just a symptom of it, of investment activity. Is that part of it . Joe sixpackrage want to get in on bill ackman . I think the underlying market is really a story of low Interest Rate<\/a> him varmint making the equity market a compelling proposition relative to other asset classes. There is a factor that winning is compelling on itself. It is attracting new retail money into the market. Is k the spec feature spac feature is more focused as opposed to being a retail phenomenon. Anna how excited are you about ipos as we head into the fall quarter . Ipos kind of stumbled during the height of the pandemic. We we stand in a place where have record stockmarket valuations. This might attract a lot of interest. The concerns about what happens in the winter with the virus. How much should we expect from ipos this quarter . I am excited. If you ask me that question three or four months ago i would not have expected to be in the strongest position that we are currently. September is historically a very strong season season for the ipo market. There is no doubt that weve seen in the u. S. And in asia very strong momentum over the last few month and ipos. I think now we will see europe start to catch up on that aces. But i would caution somewhat that i still think we are in a very selective environment will investors will really look for three characteristics. One is size and liquidity. Three is anything with a growth annual. Basically, europe and asia are leading this, as usual, europe is kind of lagging behind. Do you see catching up in too hardr is the u. S. To resist . It is a tough ask at the moment to catch up. For context we have raised 720 billion year to date globally. Over half of that has come from the u. S. You are right and highlighting the tech story, which really is dominant in the u. S. I think there are signs in europe of potential to catch up to some extent. We have seen a lot of activity in the delivery companies. We have seen a lot of activities in payments and also software has been another area where there is no doubt the investor demand is strong. And there is one other factor which we will compound in the story. I think the index we have seen in recent weeks is using a way of more traditional economies. Seeing the index having a greater weight in Information Technology<\/a> and momentum in growth. Anna just briefly, what kind of assets do you see from investors for the offerings that businesses have coming for the markets and issuing. Where Companies Need<\/a> cash they are coming with a secondary offering or a book build or whatever, what kind of appetite do you see from investors for that . Appetite is strong. There are three main groups. One is Sovereign Wealth Fund<\/a> that is taking a strategic view on the companies they want to have exposure to longer term. I think the big along investors have had a strategic look at their portfolios and have gotten clear guidance on which companies they wish to support. And the Hedge Fund Community<\/a> has been very active in providing liquidity. They have been rewarding for doing that. I think from an investor appetite, it is very strong. The next theme i think you will see is a transition from the tactical capital way we saw earlier in the crisis and more strategically thought through in the next few months. Really interesting to talk to you. Thank you for your insight. Program ourhe stocks to watch as apple success has suppliers after they call for the construction of 75 million 5g iphones. This is bloomberg. Matt welcome back to Bloomberg Markets<\/a> european open. Six minutes until the cash open. But get to dani burger for some of the stocks to watch. We have been talking a lot about apple. Were hearing a lot about 5g. What should we look for . Dani it will be a big day for apple suppliers in europe. Apple is telling suppliers to make as many as 75 to 80 million 5g iphones. This is especially impressive, they are holding the same level of new iphones coming to market as last year, during a pandemic. Look for suppliers to move. They have already called up 1 this morning. Possibleca, another mover to the upside. Late yesterday the and announced they are starting their final phase trial for the Coronavirus Vaccine<\/a> in the u. S. That is testing 30,000 people. Already doing the final in the u. K. We should have preliminary results. Sell 37. 5greeing to of its landmine cables to kkr. A few other bits of Corporate News<\/a> to keep an eye on when it comes to the reshuffling management. Thank you for that. Dani burger with stocks to watch. Coming up is the market open. Futures suggest we will catch up with with the u. S. Had yesterday. With what the u. S. Did yesterday. The open is next. This is bloomberg. Anna one minute to go until the start of cash equities trading. Good morning, everyone. Here are your headlines. The German Government<\/a> expects this years contraction to be less severe than previously forecast. There is a new forecast for germany today with data from across the region. Four more years. Jp morgan says investors should issue themselves with the odds of donald trump winning the election. The president s kenosha today the president visits kenosha today. An apple planning to build iphones later today. Plans to build more iphones. Matt . Matt futures higher on the continent, lower in london as a result of the bank holiday, playing a catch up with the drops we saw yesterday. On the other hand, dax futures are indicating a gain of well, the futures contract at least is up 9 10 of 1 , ftse futures now turning higher. Here is the cached rate as each trading live, it will populate the global macro movers screen, and you can see the ftse out of the gate up, so those futures were down and turn higher just before the cash trade, and now we are seeing really, little change there, but at least on the Positive Side<\/a> of zero. Spain is trading up almost one percent, the ibex jumping right at the open. The cac 40 also up at the open about half of 1 this morning, and interesting, if you take a look at looking over three columns to the u. K. Fiveeuro, right now, you can see now your bonds, right see big drops there in yield. Back over to the left and to the equity indexes, you see the upe, the opening in milan, 7 10 of 1 , so we are looking across European Market<\/a>s at big gains as we look ahead to manufacturing data across the region this morning and after kind of a kind of losses. Founderus is a ceo and of a company. We are looking at these gains, still waiting for the dax to open, but on a day when we expect the german economist to come out and say that the pandemic did not hit germanys economy quite as hard as had been previously expected, does the rebound look good to you . Yes, i think it does, and this is one of the things we have been focusing on, just the nature of the rebound, particularly on the manufacturing side, and germany, of course, is a manufacturing powerhouse, but the pandemic has affected these services industry, and the Manufacturing Sector<\/a> has avoided some of the declines, but germany should do well in this environment. And generally speaking, data, not just this month, but over past months has been to the upside, so all of the momentum suggests these views whether germany or other economy, they were a bit too pessimistic early on in the pandemic. Anna good morning to you, bilal. And how much stronger does that drive the euro . It is up for tenths of 1 . Dollar weakness a broad theme, but the euro is a manifestation of that that we see very clearly this morning. As has been the case for a while. How much stronger can the euro get here . Bilal from a valuation perspective, from a valuation perspective, we can certainly if a move towards 125, 130, not higher, so at this stage, the valuations are not a limit to how high the euro can go, and i think all of the stories and the announcements we were getting from the fed all suggest the u. S. Is really willing to keep real rates very, very low, negative for a long period of time, and that should keep the dollar weakening trend, and then that just leaves a few currencies which can reflect that dollar weakness, and on top of that, if you look at the european current account surplus, that is very large, so that is for europe to be able to handle a strong euro, as well, so i think there is further to go in this euro appreciation. I think this is probably the middle stages of this broader uptrend in euro and downtrend in the dollar. Reallyhich is not great for european stocks, obviously, if the up currency continues to rally. What about japan, bilal . We saw some calls a few days ago for possibly the yen to strengthen to 100 to the dollar after the resignation of shinzo abe. Now, we are seeing calls for his successor to be even bolder than he was. What do you think about what has been a traditional safe haven currency continuing to gain as the dollar weakens . Bilal japan has this challenge that it is the safe haven currency, partly because it has attracted low Interest Rates<\/a> for a long time, so a funding currency for all risk on trades. Well. Ors abroad, as japan always catches the brunt of having to strengthen when the dollar is either very weak or when you have risk aversion. I do think that the abe period did see a pronounced yen weakness. Part of that was at the time abe came into power, the yen was very strong, and he did fx intervention, and the prospect of that is low, so any new replacement will not be doing that. If we see the euro moving up towards 125 or higher, than that necessarily means the dollar should move towards 100 if not lower, as well. And what can the japanese do in that environment . Really not much. There is scope for some of the Pension Funds<\/a> to allocate more abroad, but that really only affects the currency in the very short term. Anna let me ask you, bilal, about the geopolitics that may drive some of these policies. We have seen this note from one bank, at least jp morgan suggesting that investors should be increasingly mindful of the odds of President Trump<\/a>, suggesting he is seeing a resurgence in at least the bedding in favor of him taking on a second term. How is this ahead of the november election then . Few months ago, there was a very strong biden lead, and trump has started to move somewhat against biden and still had a lead, and the battleground states, that has narrowed a bit, the lead. If we go back to clinton, the 2016 election, you also have a similar lead, so everyone is getting worried that the polls were wrong. The polls have narrowed very sharply. My sense overall is that this will be a fairly close election, but overall, my sense is that biden probably still has the odds over trump. The larger issue here is if we do have a contested election, so if biden was to scrape by with a very small victory, will trump contest that election, and then we have 2, 3 months of uncertainty, which would then be very negative for the markets as a whole, so what i am focusing on is the margin of victory and whether or not that will lead to a contested election. Interesting,ally and there is an issue on the bloomberg about what is the process for a contested election if we end up in that. He stays with us on the program. Coming up, taking a big bite out of the market, apple plans a massive rollout of its nextgeneration iphone, with more models to be presented in october. This is bloomberg. Welcome back to Bloomberg Markets<\/a>. This is the european open, right now 10 minutes into the session, and we are seeing the ftse, which opened momentarily higher, down now three quarters of 1 , the dax down or up about half of 1 right now, so we are seeing gain in European Equity<\/a> indexes as the ftse falls in london. Looking at the Bloomberg Business<\/a> flash, we go to laura wright. Laura thanks, matt. The Coronavirus Vaccine<\/a> in the u. S. , hoping to enroll as many as 37 adults to test the shots, a final phase tests also 30,000y as many as adults to test the shots, a final phase of tests also underway elsewhere. Charges of stock manipulation that could potentially put the head of the Worlds Largest<\/a> Electronics Company<\/a> on trial for years, related to whether he and samsung used controls for the Company Founded<\/a> by his grandfather. Elon musk is the richest person in the world as tesla shares continued their rally after a stock split, according to the index,rg billionaires with his worth growing billions this year alone. That is your business flash. Matt . Anna . You, laura, thank wright with the business flash news. Some stories we have been following, apple is planning a massive rollout of its nextgeneration iphone, asking suppliers to build at least 75 Million Units<\/a>, also looking to unveil if you are more models with 5g wireless with a rifferent design unveil fou more models with 5g wireless with a different design. Bilal is still with us. Have had many roles over the years, clearly leaning towards macro, but in terms of tech, this rally we are seeing in tech stocks, this is not part of anybodys notice, i am sure. What do you make of where we are on tech stocks . They are not expensive, looking back at past valuations. What are your thoughts . Ilal on the valuation side, do not think valuations have been a good indicator on stocks, so i think i would put a smaller weight on the using of the valuation as an indicator, and from a narrative perspective, i think one thing the pandemic has shown as clearly is many technological trends have been accelerated. Lots of things we thought would be adopted in five or 10 years are being adopted today, so in that sense, it is making sense that Technology Stocks<\/a> are doing incredibly well. In some ways, the pandemic has accelerated the economy, so things in the Virtual World<\/a> have done well. D, somethe dot com perio of these are very, very attractive, and in some ways, they have some defensive characteristics. They have the characteristics of a Utility Company<\/a> with stable revenue, but unlike utility companies, they have incredibly high profit margins, as well. That being said, i think there is a narrative to justify these moves in tech. Now, there are some stocks like tesla that do not quite fit this narrative, and i think the tesla story is more to do with the also the there is whole energy story, as well, which i think has benefited tesla. Matt i was just thinking yesterday, bilal, when i went into my garage. I moved into a building that was put up only five years ago, and with the parking spaces, they only have two charging stations. Over the last say six months to one year, it looks like 10 people have gotten new, electric cars. I think you are spot on about what we thought was going to take five to 10 years to happen, certainly in electric cars, it is happening already. We see that reflected in the numbers, as well. That is part of what is going on at tesla. But with respect to valuations, i have to ask, if you cannot look at valuations, how else do you judge whether or not you want to buy a stock at todays price or any asset at todays price . You have to be able to value it somehow, dont you . A couples, there are of different ways. If you want to go down the valuation path, you have to put that into context of what other assets are yielding, as well, so bonds offering meager returns if not negative yields, that means equities are much more attractive then, so you have to look at the valuation model that compares yield. That is one thing. Another thing would be to look at market flows and trends in earnings as in the earning momentum picking up or not. You know, regulatory change, tech change, a whole array of things you can look at to determine whether or not it is wise to buy some of these stocks. Interestingly, my own view is i think one of the biggest risks to tech stocks is if we get a vaccine breakthrough, because then, suddenly, all of these more Traditional Companies<\/a> will suddenly look more at traffic, attractive, so in a world where we are not sure about what is going on with the pandemic, the one thing you can do is piled into additional companies, where if you get a vaccine and things normalize one thing you can do is pile into additional companies. Reallyhat is interesting, and i have discussed this with a number of guests recently. You said suddenly things change, and suddenly, things look different. X company has developed a vaccine that is successful to somebodys standards in terms of treating coronavirus, and then all of a sudden, we are back to where we were how will this work in terms of the markets thinking . Bilal markets tend to anticipate this, so it is not really a headline, but it could be Something Like<\/a> that. If you look at the surveys we have had, most people are expecting some kind of vaccine breakthrough in the first half of next year. Now, if, as you pointed out in your news stories over the past hour, if we get a breakthrough this year, that certainly would be a big surprise for markets, and you could start to see things start to price the other way. There would still be some questions around with the vaccine before everybody or just high risk people, is there enough vaccines, we will there be a fight between countries to access the vaccines, so a number of questions arise, but i think the First Western<\/a> company that has the fda approval of the vaccine, i think that would lead to a big shift in market prices. Bilal, reallyt, fascinating stuff from you, so we will get more from the ceo and founder who will join us on Bloomberg Radio<\/a> in just about 40 minutes time, so 9 00 a. M. In the u. K. Digitaltune in on dab radio in london, and elsewhere, you can google Bloomberg Radio<\/a> or on the bloomberg. You can get radio live, as well. Coming up, it is a growth boom for zoom. The video Meeting Company<\/a> sores after revenue jumps nearly four times in the second quarter. We will discuss that next. This is bloomberg. Welcome back to the European Market<\/a> open, 9 21 in paris, European Equity<\/a> markets in positive territory, apart from the ftse, which is playing yesterdays game with the bank holiday. Revenue jumped more than four times from a year earlier, zoom, standing out as one of the beneficiaries of the pandemic. Their sales projections signal the explosive growth may continue. Joining us with the details is bloombergs dani burger. Booming growth comes as no surprise, does it . Dani it does not. We knew that zoom would have a great quarter considering the work at home, and it had a great first quarter. One thing that is surprising is the extent to which we saw this explosion in revenue, so the estimate was about 500 million 663rs, but it comes in at million, which means we sign increase year over year, and what is really impressive is the company says this growth has no sign of abating. They think therell continue to be more adoption in more sales of their video services. One analyst put it well when he said, i am at a loss for words. He said he and his colleagues have discussed the Company Earnings<\/a> and that it was some of the best they have seen in this space, how do they get better, how do they follow it up, and he says that he thinks they have done it. If you look at the entirety of the nasdaq, this is the biggest increase we have seen this quarter. Course, even if it is no surprise, the ceo is a much richer man today than he was last year. Uansto us about eric y wealth. When we saw their shares after hours go to 410, that means his wealth in just four hours increased by over 4 billion. He has seen his wealth explode this year. 12. 8 Million Dollars<\/a> he has added. This is probably a lot like the zoom price chart, made up of shares that he owns, and it has been a big year with eyepopping wealth for elon musk, jeff bezos, and you can add eric yaun to this list, and if this holds up, it means his worth will surpass 20 billion today. Matt, anna . Dani, you are flanking earlier that it was more than just zoom, the moves around technology, how there were a number of brokers lining up to be positive about tech this morning. Dani yes. This is really true. Often, when we see tech, we get the contrary and analysts coming on and saying, ok, it is too high, take a step back, but wells fargo saying if you take it through a pricetoearnings ratio or a price to cash flow ratio, it does not look like it is overblown like it did in the tech bubble, tesla, and bernstein, another shop i should say loves to take the contrarian side, says that now is the time to be going long u. S. Growth. Their argument is too full, one of them being that rates are very low right now their argument is twofold. One of them being that rates are very low right now, and without inflation discounting their cash, what is more, this is still the only sector issuing buybacks, and the u. S. Thatrates are now issuers are evaporating as companies are trying to shore up their balance sheets. But a lot of these tech names still issuing buybacks, which makes them an attractive buy according to bernstein. Matt all right, dani. Thank you. Bloombergs dani burger. A couple of movers to look at, one rising higher today raised to a buy at goldman sachs, the stock going from 45 to 75 this year, so not a bad year, zalando. And you also see dialogue, the story we have been talking about, targeting 5g iphones this year. That is helping suppliers, and dialogue is one of those, and that is also a stock that is rising today, although a stock dialogue started the are off at about 45, and it is now trading at 37, so it has got a little bit of catchup to do. Old mutual is seeing profit drop, and you see them down 7 . Coming up, we will talk more about apple as well as tesla climbing to record highs after stock splits. Will the effect last . S is bloomberg a record climbing to record highs after stock splits. Will the effect last . This is bloomberg. Matt welcome back to Bloomberg Markets<\/a>. This is the market open, 30 minutes into the session, and we are looking at gains in the european indexes. Up seven tents of 1 , the stoxx 600 up 7 10 of 1 . Grrr , at the the only losers are travel and leisure stocks, banks, as well as media, and if you look a little deeper into what is pulling down, weighing down, the ftse, you will see we have drops in old mutual, which we showed you earlier, but also know, britishou stocks basically that are helping to take points off of hsbc,dex, as well as the lloyds, vodafone, etc. Lets get the bloomberg first word news, the top stories from the bloomberg terminal. For that, we go to lore right london. Laura President Donald Trump<\/a> we go to laura wright in london. Laura President Trump<\/a> is going to kenosha and suggested the man involved in a shooting may have acted in selfdefense. Others slammed him for not calling out ryan rittenhouse. J. P. Morgan has a take of trump winning the election, saying the polls are now nearly even, largely due to the impact of recent violence on Public Opinion<\/a> and potentially also bias in the polls. Germany does not expect the economic fallout from coronavirus to be as bad as previously thought. Sources told bloomberg the updated forecast is to be released today. They have staged a rebound after collapsing in the second quarter. Global trade is posed to recover more quickly than after the 2000 eight financial crisis according to a German Institute<\/a> for World Economy<\/a> after the 2008 financial crisis. The institute says that hints at a vshaped recovery. Global news 24 hours a day, on air and on Bloomberg Quicktake<\/a>, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Anna . Matt . Laurathanks very much, wright in london. Lets go to tech, where a lot of the headlines are, apple and tesla climbed to record highs. We just learned that apple has asked suppliers to build at least 75 million 5g iphones for later this year. Joining us now is our tech opinion columnist. We have plenty of you plenty of things to go over. Lets start with apple. 75 million 5g iphones, what exactly does that mean for a company the size of apple . What is that telling us . From earlierations in the year that the virus was not necessarily going to be a handsets, but for it may push it back, and it seems to be pushing it back to the latter end of the year. It was reported that there is a production target, and they are the same as last year, essentially, which is broadly the trend in apple these days, not necessarily selling more handsets but getting more money out of the handsets they do sell, and these will be 5g and they can charge somewhat of a premium with what ahave been charging premium over what they have been charging. Matt hopefully, it makes things better, alex. There are these broad conspiracy theories. They existed when televisions first came out, when microwaves first came out. Each generation, there have been concerns, i think power lines, as well, but they seem to be getting louder around 5g. Is that going to be any kind of a detriment to the rollout of the network . Alex no. It is all nonsense. Byspiracy theories fueled any number of social media sites. Smere is this sort of nimbyi which may make it harder to , and there will be a higher density, and there is the power consumption with 5g networks. They are serving more phones. Power consumption is going to go through the roof, and that is something, given the legitimate concerns about the environment, that is something we need to be talking about. Companies that make networks, like huawei, they are working on solutions to make the networks more efficient, but you will still have more antennas, so that is a legitimate concern. Anna let me ask you about other things in the space, alex. We have tesla very much in the news and elon musk in the news, now the third richest person in the world. Let that sink in, the third richest person in the world. Yes, elon musk, a very, very rich man on paper. It is so hard to get your head around the valuation of tesla. Stage, it must be a little bit of a concern given when it was at a lower valuation, it was not thought to be worth that. The lack of other investments in the Sustainable Transportation<\/a> space is, perhaps, a very good reason that tesla is worth more now than any other car company in the world put together, and elon is clearly benefiting from that. Matt all right, alex, thanks so much for joining us. Love having you on, our Bloomberg Opinion<\/a> columnist, alex webb. You can check them out. Check him out. Up next, the question about whether or not there will be for president s donald trump. J. P. Morgan says investors should position for rising odds for that as the president visits kenosha, wisconsin, today. This is bloomberg. Welcome back to Bloomberg Markets<\/a>. This is the european open. We are 40 minutes into the session, the dax up 167 points. The ftse, on the other hand, in london, down about 2 10 of 1 , and Oil Companies<\/a> fall. Lets talk about the u. S. Though. J. P. Morgan says investors should position for the rising chance of President Donald Trump<\/a> winning reelection, adding odds that had him well behind democratic opponent joe biden now nearly even. J. P. Morgan says that is largely theto Public Opinion<\/a> about violence and protests as well as potential bias in polls. For moral, a guest joins for more, a guest joins us. Our columnist yesterday morning highlighted in his piece on the bloomberg, and now, marco kalon of edge, who has a fantastic record, is chiming in as well, kolanovic, who has a fantastic record, is chiming in as well, right . Yes, and the covid data are improving, so even though a lot of people might feel that the Trump Administration<\/a> may not have handled that well, it is starting to improve and go a bit into the rearview mirror. That might be beneficial for trump heading into the election. And so that is some of the things behind this conclusion about trump and taking his potential for reelection more seriously. Still, a lot could happen between now and november. Yes, and they do mention there are all sorts of things, including debates, including if we have another wave of covid, if the protests resolved differently, but even with the protests, the democrats are caught a little bit between trying to appeal to broader america and trying to tamp down the protests and their progressive wing who might be is a bit of, so it a tough line for the democrats, but, yes, there is so much that could happen in the next 60plus days. Difficult for the democrats, but on the other hand, if they think they are 10 or 15 points ahead, a lot of times, people are just not motivated to come out and vote. Maybe this is, in an odd way, kind of better for the biden camp. Was one of thet things that happened with hillary clinton, that there were complaints that she did not visit places. This might be lighting a fire under the biden people to get act like more and to they are behind even if they are not necessarily, so if you are running like you head, that does not necessarily help you either. Running like you are ahead, that does not necessarily help you either. Joining us on politics meets markets. Lets go to the Bloomberg Business<\/a> flash with laura wright. Indictedosecutors have a man on potential stock manipulation that could put the Largest Company<\/a> on trial for they didout whether things to help him take control of the fund. Relatedd saw problems to equities, options, and cryptocurrency trading but said yesterday afternoon that the issues had been fixed. Also tde hit ameritrade, vanguard, and charles schwab. Elon musk is the third richest person in the world, and there was a stop split. According to the bloomberg billionaires index, he is now 5 billion. 11 that is your Bloomberg Business<\/a> flash. Anna . Matt . Laura wright in london with your business flash now, the Hong Kong Exchange<\/a> has kicked off its biotech summit. The Virtual Event<\/a> comes at a time when health care listings have surged to a record among the covid pandemic. Earlier, we spoke to the clearing chief executive, charles lee. This is just the right thing to do at the right time. It is such a big sector, and china is such a big country with a very massive aging population, huge health care challenges, and lagging drug development, so all a this requires asia to have center for biotech since we can support research, we can support the Massive Health<\/a> care reforms that china finally kicked off. I think that is a very big event, because china finally, ago,literally four years brought in an entire drug likeistration system into the fda. That reform essentially brings chinas standards with Drug Administration<\/a> ready much the same with the u. S. , so that reform set the foundation for us to, again, take a huge reform in the Biotech Sector<\/a> in terms of notings, because they have revenue obviously before they can even sell anything without approval, but they were heavily regulated, so we thought that previous history of being able to be regulated allowed them to be listed in that they do not have the traditional measures that we typically ask for before they can list here, so that was a great event. It is a milestone. We never thought covid19 was going to hit us, but now, looking back, i do not know how we could hope without this new sector that is allowing so Many Companies<\/a> to join the race, finding a vaccine, finding therapeutics, finding solutions. So what is the hedge . We know hong kong has also been deregulating to make it better for these Unicorn Companies<\/a> to list or making it easier for them to list on the chinext, so what about going to hong kong . Seven out of the last 11 years, we are number one in thes of ipos, so we are ipo center around the globe. So that is just the tradition. And also, a drug development, you know, in this space is very international, requiring a tremendous amount of Scientific Collaboration<\/a> between the u. S. , china, and europe, and the scientists are all over the place. They are accomplishing. Has an International Component<\/a> to it, so hong kong provides that great andrnational connectivity, we could not really handle this, so we have gone through a massive reform and really allow revenue but second phase of clinical trials. I think china is following, trying to do similar reform, but i think at the end of the day, it is about money. It is about scientists. It is about working together. I think we provide that unique combination. Done yet. S is not what more will you see in terms of reform, and what sort of tweaking in the rules do you see as you try to attract more listings . Charles i think in the broader reform, the paris revenue preech chapter the revenue biotech chapter is important to the market, so a lot have to do with vie and many of the u. S. Companies have unique structures that do not necessarily fit in here, so we have to find a way to make it work for them eventually to all come back, but specific biotech, i think the bulk of what we needed to do is pretty much butnd us, don, but done, there are a lot of kinks here and there, and just to make the offering easier, so there are a few things that we are working with our regulators and our listing department. We are not talking about fundamental change. That was the Hong Kong Clearing<\/a> and exchange executive speaking to haidi stroudwatts. Some numbers coming through on aheadacturing, pmi, 53. 1 of an estimate of 52. Entech pushes nasdaq to another record. How long will that last . Amtek pushes nasdaq to another record. Pushes nasdaq to another record. This is bloomberg. Welcome back to the European Market<\/a> open. 53 minutes into the trading session, stocks high, up three quarters of 1 , the ftse 100, lets put that went aside, playing catchup, ftse down put that one aside. A guest is with us. All about tech. I will put that aside for just one second and talk instead about what is going on with the euro. This something that worries european companies, the European Central<\/a> bank . We are up around half of 1 . Yes, absolutely, and. It is probably not yes, absolutely, anna. It is not worrying yet. What would be the pain threshold, they found it was are a big, so we figure away from that. Not pulled away all that much from the european or the euro Effective Exchange<\/a> rate, which the ecb uses as a benchmark rather than the euro dollar rate. Bringing up these questions as when the currency will start becoming a problem for companies and the economy as well, it is not particularly a convenient time for a currency to be strengthening where it is still feeling the aftereffects of the coronavirus crisis, and we will probably be feeling that for years to come. Matt we are seeing i mean, because of the dollar weakness, we are seeing a lot of pretty crazy numbers, the pound at 134 , 135, and the chart is a hockey stick in the last few minutes, and the same is true for the euro, so the weaker dollar really moving markets. Right now, we are seeing german august unemployment down by 9000, the estimate for a 2000 drop. We are getting some german data points out, and maybe most important is the manufacturing pmis, a slight mess. The level. The survey was for 53. Scoop, aa Bloomberg New<\/a> estimate for the german Economic Growth<\/a> expectations out of the finance ministry, does the rebound here look stronger than anywhere else . Stine yes, it does, matt, and it looks like it has more momentum than the u. S. , for example. Some of the details we are seeing, for example, in the pmi numbers would be worth paying attention to. I would Pay Attention<\/a> to the employment components of the pmi released, because that really is likely to be the pain point of the economy. We are seeing, as you mentioned, unemployment beating estimates is folly moret than expected in germany, is falling more than expected in germany, but what about others who do not have as much capacity for support at the moment . Anna thanks very much. You gave us a lot of interesting lessons to be learned, of sorts, and she leaves our markets life team. Thank you very much our markets live team. Thank you very much. Moving on data, gold also in focus around the 2000 mark. Surveillance is next. This is bloomberg. Look here, its your very own allinone Entertainment Experience<\/a> xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Francine Jp Morgan Says<\/a> investors a position for the odds of trump being reelected. He visits kenosha, wisconsin today. The German Government<\/a> expects the retraction to be less than forecast. Productionon for 75 million phones for later this year, in a signed demand is going up. 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