Bad reaction. Astrazeneca slams the brakes on a phase 3 vaccine trial after one test patient contracted an unexplained illness. Watch the vaccinemakers at the open tomorrow. The rout resumes. Asian equities post losses after more devastation for u. S. Tech investors. Slumps ses 7 but tesla by a stock record 21 in yesterdays u. S. Session. England prepares to reimpose coronavirus restrictions on the public. Starting next monday, gatherings of more than six people will be banned. Youve been warned. Just under an hour away from the start of cash equity trading in europe. Lets look at the futures picture right now after, you know, the major u. S. Equity benchmarks dropped more than 2 . The nasdaq more than 4 . Now were seeing red arrows once again for european futures. Yesterday was a down day for european stocks as well. Take a look at u. S. Future this is morning after the big drops that we experienced yesterday. Remember yesterday was the first day of trading for u. S. Stocks. They were closed on monday for the labor day holiday. We do see nasdaq futures up, almost one full percent now as the more, i guess, plain vanilla benchmarks rise a little bit as well. Maybe we get a move to the upside and maybe that influences u. S. , european stocks at the open as well. Anna absolutely. Lets see how the futures picture developers in u. S. That future has been volatile over the last few mornings, hasnt it, matt . Lets see where we are. A picture of the Asian Session or the negativity in it. The us a trailiar asx 200 down by 2. 2 . All in all down by just over 1 on the asia pacific. Reaction to the selloffs we saw of course in the United States. Yesterday. Really interesting to see how the vaccine news plays into all of this. The tech rout created headlines, astrazeneca pausing their testing. It will probably be seen as a risk off event i expect by astrazeneca news. Its interesting to think about what tech does. If this means quarantines for longer, longer to get a vaccine, does that actually play into some of the more defensive arguments to own tech . Thats something well explore with our guest as we go through the program. Keep an eye on commodities as well. I want to flag the oil price. It now has a 39 handle. Weve dropped below 40 a barrel. It seems the cut price saudi oil not generating enough demand to satisfy the bulls. Let us get into the tech story a little bit more then. Follow up on this big rout we saw in the United States. Selloff in u. S. Tech shares is picking up steam. Futures have regained future this is morning. Investors fled the highs yesterday for the third consecutive session adding to the turning sentiment, a report that astrazenecas vaccine trial has been halted, well see how that plays into the mix. For rarkt reaction heres danny dani. That long weekend in the u. S. Did nothing to soothe sentiment. We saw the biggest three of h of day deline for ethe nasdaq since march. For the s p the biggest decline since june. You can see that tech was the big leader to the downside. Ive also included tesla which almost makes the 7 and 11 threeday decline look like nothing because it was such a massive selloff in tesla. This shows how the concentration in u. S. Equity has brought the whole market lower. Tesla not included in the s p 500. Thats part of the reason it sold off. Also has to d with g. M. Investing in one of the rivals, electric trucks theyre aiming to make with the company. It is included in the nasdaq, included in the nasdaq part of the tech stocks. One analyst said he sees it continuing to go down but fundamentals remain intact. One of the things about fridays selloff in the u. S. , we talked about maybe its a techinduced selloff. We saw the havens react. Dollar here getting a bit, u. S. 10year yield moves lower. A bid for the bonds. U. S. Futures, this right here, they are getting a bid this morning. So maybe its buying happening throughout the Asian Session. This shows that tchand concerns still moving around in the market with that astrazeneca vaccine trial pause. Matt . Anna . Matt thanks very much. Dani berger looking at the big rout we see continuing in the u. S. Futures now there, u. S. Futures, on the rise. But the optimism didnt feed into the Asian Session. Shares are declining there across the region and of course we have futures here in europe falling ahead of the open. Joining us now is simon flynn. Bloombergs emerging markets strategist. Simon what was the is this just follow through from the drop we saw in u. S. Stocks . Simon yeah, abslew absolutely. Its just follow through. The market overall seems to be taking the view that what happened overnight is really ust a healthy correction and citing three things in support of that first of all the share decline itself has been quite narrow as you guys have been saying. Its really the major tech names making up most of the losses. Secondly, as your proves guest was saying, moft markets are really not showing that much stress. Treasury neeleds didnt really fall that far. The dollar bid wasnt that significant. And third and finally, i think people think there are decent reasoners in rally to continue again. Economists generally lining up the g. D. P. Growth forecast and Global Market policy remains extremely kay acome dative. People are reasonably sanguine i think in asia. Let me ask you a little more on the tech reaction were seeing here. The question of the day, i know the market live stream has been throwing around. Is it a healthy correction or a rout . What reaction have you been getting to that, simon . Simon make 6040 toward healthy correction. Which as i suggested, i kind of agree with. Some people introducing idea that the fed meeting over 15th and 16th could be important and that any further recovery is going to be contingent on what the fed says. So people seem to be expecting the state to build on their framework review. Number one, introduce clear guidance, an outcome based Forward Guidance as opposed to forecast based. Secondly also confirmation that their Asset Purchase Program is targeting economic jut comes and not Financial Stability goals. People do seem to be placing some reliance on the fed or as they say the predominant argument. His is a healthy correction. Matt simonning thanks for joining us. Simon flint, emerging market strategist. Check out the mlive blog. Question of the day is the tech drop a healthy correction or a rout . This is, i think, one of the most hotly debated questions out there right now. Reach out to us. Just type ib plus tv go on your bloomberg terminal. Coming up, astrazeneca taps the brakes on its vaccine trial. Researchers reviewing safety data after a participant became ill. More on that story next. What to watch for this morning. This is bloomberg. Matt welcome back to Bloomberg Markets, this is the european open. We are 49 minutes away from the cash equity trade. Youre looking at red arrows in terms of european futures. Lets get to bloomberg first word news, we go to laura wright in london. Laura thanks, matt. Astrazeneca has paused a late stage trial of its Coronavirus Vaccine after a participant became ill. The drugmaker said the decision was a routine action intended to allow researchers to examine safely data. It could delay or derail efforts to deliver the socalled oxford vaccine, which is seen as one of the leading candidates to provide immunization against covid19. High yield bond defaults could struggle, according to jeffrey goodlatte who criticized the feds actions, accusing them of uh unsustainable corporate brings. Deutsche bank said the best run of stocks and bonds in 100 years is coming to an end. They cite big shifts in political economy from worsening social equality to a reversal in globalization heralding what they call a new age of kiss order. Combined equity and debt prices across 15 developed marks hit their highest level since at least the 1860s this year. Global news 24 hours a day on air and at bloomberg quick pick powered by more than 2,700 journalists and analysts analysts in 120 countries, this is bloomberg. Anna, matt . Anna thanks very much. Prime minister Boris Johnson is set to ban all social gatherings f more than six people, as covid19 cases are rising rapidly once again. Meanwhile meanwhile, astrazeneca paused its vaccine trial after one participant developed an unexplained illness. They say the move is intended to give researchers time to examine safety data but it could delay or derail effort for immunization against the covid19 virus. The shares are sliding on the trade gate exchange. Im pleased to say were joined this morning by justin, head of retail multiasset funds. Good to have you with us. Nice to speak to you. In terms of i wonder how we respond to this retreat into a type of lockdown, not full lockdown but certainly restrictions on our ability to gather socially in the u. K. , this news, i suppose, how does that fit against what you think the market is assuming in terms of lockdowns over the summer for europe . Our overall view is youre always going to see many types of lockdowns throughout europe as the virus kind of spikes in certain areas. I have to say the recent spikes have concerned us but it does seem that it is concentrated in younger cohorts, for example, and we do know a lot more about the virus and how to keep it under control. So while well see these mini type of localized lockdowns or smaller kind of restrictions, i think its unlikely well go back to what we saw in march, april, which i think is a ositive. Matt isnt this to be expected that we see occasional hiccups in testing . You dont expect us to have a favorite, the first one we ever heard of, to sail through this with flying colors, right . Thats why we have is so many different incredibly intelligent, incredibly well funded Companies Working on it. Exactly. So its clear that the vaccines and the approval of vaccines will keep will continue to have, you know, kind of the ups and down as we go through testing. This is particularly at a time when the market is quite volatile. So we do expect some sort of reaction in market. This is just par for testing and getting a vaccine ready for approval that you wont go through kind of the ups and downs. Weve got a lot of vack teens vaccines and thats our phase 3. So it looks likely that at least ne of them will get through. Anna it might be a short term stumble, well see. What about as we wait for one of these many vaccine candidates to be successful, fingers crossed, what is your do you get into the bopped market . Is that where you seek haven status . So yeah, across bonds we were moving away from the traditional developed market bonds, more into areas like australia, south korea, where youve got kind of higher level of yields that mean if you do head into a tricky time in terms of market, a tricky time in terms of economy that we do have some protection and cushion from those from those bonds. More interestingly weve been moved into the equity more recently, value starting to build a base there infrastructure as well where the aluation case is strong. Matt justin, what do you think about the possibility that europe does plays a little bit of catch up with the u. S. As tech stocks get hit so hard and you know thats always been the wind in their sails or at least our anchor. Does it help that in this time period that europe maybe isnt as tech heavy as the u. S. . I think it does. I think youve seen the differential between the u. S. And the rest of the world, particularly since march. But also you know, as markets fell from the under february and outperformed on the downside, jut performed on theup side. More recently were seeing it come out of the market overall. The big challenge i think is that the tech stops as a precaution of the overall market are clearly greater. When tech stocks become volatile, when you see the selloffs they are risk will spill over to other stocks, other sectors, its clearly higher. This concentration con undrum ive spoken about before as investors that we have with tech stocks dominating indy cease globally is a real challenge. By spreading across different regions, and diversifying your equity exposure we do think that should be beneficial over the long term. Anna justin, thanks so much. More from him coming up shortly. Well continue to this conversation around tech, specifically focused from tesla as it tanks. The carmakers shares have their worst oneday slump ever up next we talk tech and stocks that defygraph fi. This is healthy,le of the correction is concentrated, those two happen to have accounted for more than 100 of the gain for the s p so far this year. Youll have these pull backs, especially with White Knuckle headline risk numbers. Ultimately to me, as we the fundamentals for the next few quarters. We still think large cap Tech Leadership is sort of the way to be positioned. And this is probably a shorter term disruption for the market. We are just smack in the middle of some indigestion, i would say, for the street in terms of how theyre processing the different options that we have seen from large Institutional Investor bus also from the retail community. Were advising investors to look at other types of factors like industrials or health care. And to just not sell the market off altogether but just be a little more pragmatic. Were headed into a period of petty significant volatility in the markets. A selection of the voices. Top bloomberg guests talking about the u. S. Stock and how to trade it. Justin is still with us. On the subject of tech, i know youve been looking at valuations here. How useful are the tried and tested age old metrics like price earnings at this stage . When you look at the top performers in the tech sector what do they tell you . Justin valuations clearly if you look at traditional valuations they look very tough before the tech sector. I think youve got to look past this years earnings, next years earnings. And really take a view on whether you have seen a growth mind set shift for tech stocks over the long term. If you do think that then i think tech still makes sense given that youre moving toward utilization and benefit from a Long Duration growth up there, likely to be able to adjust their earning through cost cutting buybacks and increasing dividends. Overall tech from a fundamental perspective is attractive but from a valuation perspective i think it does make sense for investors to evaluate where they are relative to other sectors. You know, when you hear people comparing, justin, the tech bubble to now, whats your response . Our mlive team writes that revenue in the tech sector is growing exponentially which maybe wasnt happening then but it was a profit problem at the time that burst the bubble, right . So do we see Something Different this time . Justin i think the big risk isnt just isnt around necessarily just around earnings. I think its around the concentration that tech stocks are taking up in our end cease. So we know that index investing has grown and if you look at now the size of the top five, top six tech stocks relative to the rest of the market, relative to the rest of the world, i think that poses significant problems of the challenges for investors. Particularly if you just invest in an index way globally or in the u. S. So i do think thats worth looking at because, you know, clearly it becomes a larger and larger proportion of the end cease. If you see volatility in the tech sector thats likely now more to spill over to other sectors. I do think from a part foal yow perspective, spreading that risk. Nape we talk a lot about Retail Investors in the u. S. , what do you see in the u. K. . Justin we are seeing this move toward cost effectiveness. Regulation, whether its in 2013 or recent regulations, we have seen this move toward cost effectiveness. What does this mean . It means that Retail Investors are using index funds more and more. Weve gone from 6 of total a. U. M. To 8 of a. U. M. For index exposure overall. The second thing were seeing is we are seeing a growth of e. S. G. E. S. G. Investing. Ly 2. 6 of the market, one quarter of net flows last quarter which i think is incredible. Anna justin, thanks for joining s. Its 7 26 here in london, 26 if youre in paris or behr lib. Coming up we talk about aviation. Ryanair caps the market. The future of aviation, we talk with Michael Oleary. This is bloomberg. Matt welcome to the european open. You see red arrows on equity index futures, down about half a percent. U. S. Equity futures rising after around yesterday that tech rout yesterday. Aslines have been hardhit travel restrictions have ground them to a halt. Ryanair for its first euro bond sale since 2017. We are joined by Michael Oleary , the ceo of ryanair. People were saying investors do not want to touch airline bonds, but your issue was like five times oversubscribed, right . Michael good morning. At, price is eventually 2. 8 . What j think is a very Strong Performance which i think is a very Strong Performance. It reflects i think the fact that they ryanair Balance Sheet is strong. Performing well even during the covid crisis. We will emerge out of this crisis as one of europes strongest and most profitable airlines. Anna you said, when you raised equity last week, that you wanted to have the money to add flights. You said that last week. Is it really about that or is it about shoring up the Balance Sheet for what could be a difficult winter . Michael there is no question this winter will be difficult. Off ouroday, 50 flights in september, october, and november. I think we were conscious of shoring up the Balance Sheet. Milliono repay 600 loans to the u. K. Government. Year, butarket this in place refinancing for both of those debt instruments. Nextind of casual for the aul for the of cash h next two years. Slashing prices , maintaining customer demand. It is challenging because european governments, most notably the british, keep changing coronavirus restrictions at a time when other European Countries have had much lower covid rates but have allowed international travel. Why do you think that is . That theke up and saw British Government wanted to narrow gatherings down to six lockdown, thehe easing has bee