Boris johnson concedes a veto to parliament over his plan to illegally override the brexit treaty. Slumped after accusations of fraud by a short seller. The selloff deepens even if the company rejects the report. Good morning. Welcome to the program. Lets get to breaking news across the bloomberg. Capex andto go to the eu car sales. European collar sales falling 17. 6 in august after a 3. 7 drop in july. This is the story that we are essentially tracking. Europes car sales setback stoke fears over annual drops. This headline was written by our colleagues at bloomberg news. 18 slump snapped a three month streak of improvement. The result may indicate that subsidies are shortlived. We have seen that improvement coming through. Whether that has been a shortlived experience rather than showing underlying resilience, we will have to see. These numbers are not so good. We will watch the automakers as a result of that. Acrosso to the picture European Equity markets. The futures picture. We are weaker. This is what we have on european futures for you. Alsofutures, dax futures giving us more detail of where thats coming from. Yesterday, europe fairly flat. The ftse underperformed. Banks and miners are part of the story. The nasdaq was down by more than 1 . Lets have a look at u. S. Futures. S p futures, dow futures, nasdaq futures projecting further weakness. A lot of this comes down to the feds language around the rebound. They were dovish in that they presented a situation or scenario where rains dont move for a long time after 2023. There was some language that talked about the uncertainty around the recovery. The cautious language about the pace of the Economic Activity we are seeing. It turned into a risk off story for global markets. Money coming out of equities. Asian equities moving to the downside. In terms of the rotation into fixed income, we see some demand for some Government Debt products is as a result. Lets get a bloomberg first word news update. Laura President Donald Trump isnt happy with what hes heard about the tone of the oracle tiktok deal. He will be briefed on the specifics this morning. Sources tell bloomberg that Top White House officials have raised concerns about the proposal. Doesnt it for shots meet National Secure concerns. Donald trump says a Coronavirus Vaccine could be widely available as early as october, contradicting his top health officials. Anthony found sheet told bloomberg hes reasonably confident a vaccine will be available by the end of the year. Widescale adoption takes time. Boris johnson is making a key concession on his brexit plans to get it through parliament. He agreed to give the house of commons a veto over whether the government can override parts of the agreement. He comes as one of the governments most senior Legal Officers resigned over the controversial proposal. Staffhe bank has told its they can continue to work from home until mid2021. Thats in contrast arrival bakes who are seeking to return employees to the office. Deutsche bank says workers only have to return when the bank moves into its new offices in july. Global news 24 hours per day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you very much. For more on the markets, lets get to garfield reynolds. Good morning for you. In the words of mark cranfield, the angst dialed way up high. Futures are suggesting we will be weaker in europe and the u. S. Session ahead. The asian equities session is weak. Does that all make sense to you . Im not sure how much sense they were. Somewhat head scratching lee strong risk off reaction to what was a pretty mild and steady as she goes fed meeting. Reaction hughes huge reaction during the u. S. Session. Shares did drop. They initially climbed after the feds announcement. It basically seems that a lot of people have been positioned, especially in fx, for a much more dovish fed then we got especially ones powell said the significantly more fiscal and monetary stimulus, the fact that he wasnt looking like he was going to be providing any of the monetary side. We all know that the fiscal side is being strangled by the political gridlock thats going on. That left risk assets looking aimless. People have been going into the meeting expecting that if there were any big moves, they would be to the dovish side. That seems to have been enough to set off some fairly strong moves. Essentially, they were overstretched in the first place. Anna on the markets live blog, youve been asking this question. How much more stimulus to risk assets need . That might come down to questions around the fiscal side. Weve had mixed signals from the United States, even from different parts of the republican party, about what is possible here or what is likely to happen. Garfield its a bit of a mystery. Democratsase is that and the white house will agree on something that can keep the government operating past the deadline in october. It usually is. Thats the minimum. Theres a feeling that a lot more than that is needed. The difficulty is that the doesnt want to see much more than a half a billion. Some think there shouldnt be any more. Donald trump is favoring proposals for about 1. 5 trillion. The democrats are favoring up to 3 trillion. You can see theres a lot of money being talked about. Gaps. Ixed very wide you would think, looking at where markets are at the moment, they would just want some sort of stimulus. Indications that once the elections are outoftheway, whichever party is in charge of whichever part of the west government will push for more stimulus to come. At the moment, we are gridlock. That is the worst of all possible worlds. Anna when i look at fx markets and you point to some of the reaction, i see the pound is down by a quarter of 1 . We will wait for the bank of england later. I doubt it has anything to do with that or do muster policy. Look at the dollar. The dollar is gaining. The euro is selling off. Moves in a risk off direction look over done to you . Garfield they are more of a snapback. Look at the currencies. They are doing the worst today. The pound looks relatively perky. Look at the australian dollar. Keeley down more than half a percent. The yuan down 0. 4 . Those are three of the currencies that have been among the strongest. Those that gain the most are now falling the most. We are already getting close to the end of the quarter. Expectations are very strong. Equity rebalancing could go on. We are also seeing some currency going on. Up until yesterday, the dollar was headed for its worst quarter in several years. It was probably do a bit of payback. Relatively quiet stance set up curve deepening. It gave the dollar a chance to take back some of those rather overstretched declines. Anna thank you very much. 10 minutes past 7 00. Up next, Holding Steady for three more years. Jerome powell gives his clearest guidance yet. His negativity on the Economic Outlook ways on global chris evans risk assets. This is bloomberg. We believe that this very strong Forward Guidance, very powerful Forward Guidance weve announced will provide strong support for the economy. Rates remain accommodative until the economy as far along in its recovery. That should be a powerful statement and supporting Economic Activity. Inflation running persistently below 2 . We will aim to achieve inflation above 2 for some time. So that inflation averages 2 over time and longerterm Inflation Expectations remain well anchored at 2 . Labor market has improved. Its a long way from maximum employment. It will be some getting back there. My stance is that more fiscal support is likely to be needed. The details are for congress and not the fed. We believe strong policy guidance will sort of the economy well by promoting our goals through the many possible paths the recovery may take. Chairmant was the fed jay powell speaking after a twoday meeting of the u. S. Central bank. He was outlining his do inflation policy. The fed said it would leave me Interest Rates near zero until 2023. Stocks gained before sliding as powell highlighted uncertainty over the economic rebound. Global equities caught in the downdraft. Asian equities on the downside. Futures in europe point lower. Chris dyer is with us. If we start our conversation around the fed and the response to it, are you surprised to see how risk off the Market Reaction is or race expected to be . Is it to do with Something Else . Chris i dont think the Market Reaction is particularly surprising. I think the expectation going into the fed meeting was very clear. Tone will continue through the end of 2023. That was delivered. That was priced into the market. Performance in the previous few days leading up to them meeting. The comments during the meeting and press conference really highlighted the fact that the focus now needs to be on the recovery. There is a lot of uncertainty there. Theres a requirement for additional fiscal stimulus. Theres questions regarding that. Thats what the market is reacting to today. A lot of uncertainty around the virus and in the hands of congress. Failed to extend that fiscal support. What do you think the u. S. Economy needs to see . What do risk assets need to see . What are your thoughts . Chris i think its really a continuation of the fundamental improvement we are starting to see as people return to work and schools are reopening in many locations. I think that what the economy needs to see is continuation of stimulusadditional from the u. S. Government. Theres difficulties but some promising signs that there might be some progress in terms of those negotiations. Next point that we are waiting to see. The election coming up shortly is another area of uncertainty for investors. We think that thats going to affect volatility for the foreseeable future. Anna how do you petition ahead of that election . Do you expect volatility to be shortlived . Theres a chance that the uncertainty lasts longer. Chris in terms of our positioning ahead of the election, we favor nonus equity over u. S. Equity at this point. We think that european and japanese equity are more favorable from an economic perspective, from a political perspective, and a valuation perspective. Thats the point regarding our positioning. In terms of the uncertainty, you are right. Its not just the date of the election. Go back to 2000. It took several weeks to get clarity. The markets suffered as a result. There were affects on the underlying economy. Businesses waited to see what the outcome of the election would be. I dont think we necessarily have a resolution of that uncertainty on the election day. Anna we heard from the fed last night. Some guidance around when rates might eventually go up. A lot of unknowns in that guidance. 2023 is a date that many are now focused on. Does this give Central Banks globally license to keep Interest Rates lower for longer . Not just on the part of develop markets but also emerging markets. This doesnt just impact the United States. Maybe other central bank will take the lead here. Chris i think that thats right. Out,e fed has pointed accommodative positioning needs to continue in order to support the recovery. The recovery is in the early stages. We have not yet seen a revolution resolution of the underlying problem, coronavirus. Thats a powerful signal to other Central Banks. Each of which has a slightly different tuition. Of england is facing somewhere challenges. Perhaps even greater in terms of the next few steps that the u. K. Will see in terms of how brexit proceeds as well as unemployment. U. K. Ll likely rise in the as for those deepen. The central bank has a challenge. The underlying theme is that they need to be as supportive as they can to stimulate economic growth. Anna thanks very much. Chris dyer stays with us. We will get further details around strategy away from the u. S. , into japan and europe. Lets get a bluebird business flash. Heres laura wright. Laura snowflake sword in its stockmarket debut. Share price up as much as 106 26 . A market value of more than uber, dell, and general motors. 6. 4 billion dollar ipo is a record for a Software Company and is the biggest in the u. S. This year. The ipo is a price discovery process. We were after a very specific set of institutional investors. People that can hold multibilliondollar positions. Willing to hold them for 510 years. Also people that dont change momentum up or down. Laura the latest version of the playstation will go on sale on november 12 for 500. That matches the price of the xbox series s. The Companies Battle for market share. Pricing is an important factor of success. The less expensive systems sell more, driving an increase in revenue from games. Rollsroyce says it is continuing to think of ways to bolster its coffers after the pandemic slumped aviation revenue. The u. K. Maker issued new debt for equity. In has been hardhit this year with its debt downgraded further into junk. Thats your Bloomberg Business flash. Up, a violent sideways shift. We will be back with chris dyer to discuss his thoughts on a geographic rotation out of the United States. This is bloomberg. Welcome back to the European Market open. Futures point to the downside. More than 1 . Reaction in the aftermath of what we heard from the fed and their assessment of the u. S. Economy and the stimulus that might still be needed from fiscal sources. The u. S. Has outperformed other develop markets significantly during the recovery. Is that dominance about to come to an end . Concerns about the exuberance of the u. S. Stock rally are growing. Our guest says now maybe the time to rotate to european and japanese equities. Chris dyer is still with us. Why is now the right time to rotate out of the u. S. And into europe . Youve said, the u. S. Market has outperformed in her national markets. International markets. The are geographical rotations. They are normal. This is an extended time for the u. S. Market outperformance. That look ahead, we think the International Stock will perform better. The Economic Cycle in early stages across the globe. These type of environments favor more cyclical and valueoriented stocks and markets. Those types of things we see in europe and japan. Theres a lot of uncertainty in the u. S. Regarding the election and policy outcomes stalling the election in terms of taxation. In coming years, they will be focused on the level of u. S. Government debt. It has become extremely alec elevated. It has implications for taxation and growth in coming years. In europe, greater cohesion among the european union. We have seen that through the european recovery fund. That will go along way in terms of reducing the equity risk premium that has been assigned to europe over the last decade. From the valuation perspective, the u. S. Market is significantly leading in terms of valuations. We think that is to just pointed now. Disjointed now. Look at 2008. Nonusi global index, companies were 54 of the global index in 2008. Today, they are 34 . Thats not representative of International Stocks within global economies. We think there will be a natural reversion in the coming years. Anna we have seen a lot of focus on u. S. Tech. You want to focus on global tech. Where do you look for that tech sector outside of the u. S. . U. S. Has Great Technology companies. That has been reflected in what we have seen in recent years. Also the performance of the stocks in the stock market. Haves Technology Companies been largely ignored or underappreciated. Look at our positioning within our global portfolios and International Equity portfolios. We are underweight technology in the global portfolios. A large component of u. S. Tech within that. We are overweight technology and our International Equities portfolio. Taiwangreat companies in. Companieslike that, that have attractive longterm Growth Prospects and compounding characteristics. They are not necessarily appreciated in terms of the relative valuations of u. S. Technology. Anna thank you very much. Market isy sideways what he foresees in the foreseeable future. Lets talk about that next time. Very good to speak to you. We will see if we wind up in that violently sideways market environment. Up next, time to get back to work. The alphabet cfo says being in the office fosters innovation. We will get more from that interview, next. A lot of headlines from Different Companies around this. Certainly in the Banking Sector. Many Companies Taking different stances on the urgency with which they want to get their staff back into offices. We will talk more about that in a moment. This is bloomberg. Welcome back. He first equity session. Futures just over 1 as well. We do expect negative tiff post fed in these European Equity market. Plana is close to 11 billion. It has achieved enormous popular thanks to its buy now, play later service. Clana will have an i. P. O. At some time in the future. We have the se oh of klarna. You raised a load of moneyful money. What are you going to do with it . Well, obviouslyings we believe the future that the credit card industry which is a trillion dollar industry is a better offer for consumers. The traditional way is you get a grace period for 30 days and the banks are trying to put you into revolving and 29 and youre borrowing against grocery. Buy now, pay later is interestfree. Its installments much easier to understand. We think this is a better alternative and were seeing the Younger Generation adopting these products. Its re