London mayor sadiq khan is set to recommend more restrictions. Bruised. Leaked documents related to troop 2 trillion in transactions, showing banks profiting from powerful and dangerous actors, even after the u. S. Introduced penalties. Low inlls to a 25 year hong kong. Plus, pet review. The eu starts an evaluation of a pandemic bond buying program. Policymakers are expected to discuss how long they should continue as well as whether or not they should widen the rules for older programs. Just an hour away now for than the start of from the start of cash equity trading in europe. Lets look at where markets are pointing us futures are pointing us. A drop in asian stocks. Ftse futures off one full percent. Concern of course about further or another renewed lockdown driving that market down further than the others. You see dax futures up 0. 8 . Look at u. S. Futures, not down as much right now. Looking at a drop in u. S. Across the s p, the dow, and the nasdaq, about 0. 5 right now. Anna futures on the retreat. Lets look at the gmm. To the downside dominated the markets overnight. The msci asiapacific pacific down 0. 4 . South korea, china, australia, all looking weaker. We saw a bit of a recovery in trade data. That has taken the edge off the south korean won. The kospi under pressure down by 0. 9 . Crude fairly steady in terms of the picture for commodities. More sizable moves in iron ore and steel. Japan is closed. Keep that and mind looking at treasuries and what we see there. Dollar has a bit of the Asian Session under pressure. It is down 0. 1 on the bloomberg other index. Index. Llar. He ongoing tiktok story questions over stimulus in the United States. A lot to talk about with our colleague in just a moment. Before we talk, lets talk to laura right. Laura . Are mounting the u. K. May need a second lockdown to stop the spread of the coronavirus. Forrest johnson is said to be told today the nation is at a critical point in the pandemic. There are expectations local restrictions could be extended to london. Mayor sadiq khan will recommend tightening rules today. The death of Justice Ruth Bader ginsburg puts the Supreme Court into the political spotlight. Republican leaders are hoping to rush through the replacement with donald trump expected to nominate his pick this week. Democrats are warning of a constitutional crisis if joe biden wins the election but trumps candidate is the confirmed one. Donald trump is threatening the tiktok deal. The apps chinese owner will have an 80 stake. The white house gets a u. S. Headquarters on the promise of new jobs. Isrces tell Bloomberg Tiktok seeking a valuation of 60 billion as part of the u. S. Deal. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much. Laura with your first word news. Lets get to laura cooper now for a look at markets. Lets start with the story laura finished with. Your question of the day, how will the oracle tiktok deal affect markets . My first thought was i cannot imagine it would. Will read Donald Trumps reaction as favorable . You see this, how do clients see this . Why would markets respond quite significantly to this . The fact we are seeing nasdaq futures in the green this morning is pointing to some signal that maybe markets are taking some reprieve. Ultimately what we are seeing is , this correction in tech continues to expand. That is unlikely to be shaken from this deal. If anything we are seeing a rotation of economic Recovery Efforts away from tech valuations. We should see cyclicals start to catch up if we do see signs of fx recovery in the u. S. Continue to be sustained. I do not think any reprieve on this tension in terms of u. S. China tensions is going to spark a catalyst in terms of providing that room for tech to outperform once again. Are on so many fronts we waiting for the election, building up to it, anticipating trying to work out how that impacts various new agenda items. Let me ask about stimulus in the United States. That is something some guests tell us. The closer we get to the election, the less likely we are to see any fiscal input into the u. S. What are you hearing . Case. Hink that is the the fact we had the death of Ruth Bader Ginsburg over the see bipartisan political frictions. Because the u. S. Economic recovery effort and a lot of the upbeat data we have seen has been predicated on this injection of stimulus to the begins tonce that show true, the fact we are seeing a significant lapse in that, that could begin to weigh on risk assets. I would expect heading into the election we are going to see this period of significant volatility begin to emerge in markets. It has been propped up by stimulus efforts. It is going to be clear this week. We have powell testifying. It will be clear theres going to be this need for fiscal stimulus. Thats going to shine the spotlight on the fact we have this gap. Thats going to be quite precarious for markets going forward. Matt i wonder what you think about the ft report. The ecb is talking about how much longer to go with this extraordinary coronavirus measures. Maybe more importantly, whether the looseningden of the rules to older programs. The report was quite surprising. Indo have this pet Program Place until midnext year. Market consensus is we are likely going to see upsizing in that. Particularly the fact we are seeing this resurgence of virus cases in europe that could require greater stimulus. Like you mentioned, the key takeaway is the fact that if we could see this flexibility itvided in tech purchases, is allowed to deviate from capital keys, if that is extended to the Asset Purchase Program in general, that is quite a significant development. That could suggest this program could be in place for longer. I think this is challenging. It is likely to bring renewed fiction friction. Does point think it to frictions going on within the ecb. It has yet to come through in terms of whats next to their policy path. Laura, thanks very much. If you want to get involved in the question of the day, around oracle, tiktok, or give us your broader thoughts, get in touch. Ib tv is the function to use on your bloomberg. Next, does the rebound have legs , or our valuations too high . We will talk. Anna still over 45 minutes into the start of the trading session. We are expecting a bit of weakness. U. K. Futures and talk of further restriction on daily life spreading in the u. K. , that is putting the u. K. Market under a bit more pressure. Equities have set to start the week on the back foot. Lower. Tocks have been deaths from covid19 approach the 200,000 mark in the u. S. London is on the brink of a second lockdown. We are joined now by the cio of emaar. We wanted to talk to you about the bull case versus the barricades. I look at what you sent me this morning around how expensive u. S. Stocks look at the moment, it makes me worry like it is 1999. How concerned are you around valuations . 1999 deed. You cannot make a valuation case. A lot of the floating is particularly u. S. Equities. Function of liquidity. You cannot say it is anything other. You walked into an 11 year expansion. This year, with bullishness by certain analysts. For whatever reason you have a levitating rest stockmarket basis. Corporate debt, your credit havets, states of people continued to plow money into u. S. Equities. Putting a limited number of mega cap tech stocks. Does it make sense to you indexes will underperform in regions that have done a worse job dealing with the coronavirus or that have been hit harder for some other reason . Changes onour today European Equity indexes and i note the ibex is down 25 . The ftse is down 18 . The dax is up 5 . Is that because of the covid implications . I think it is. , you weret was clear going to do better if you did a better lockdown. There is no question that has played out in the market. European equities, people forget they are widely owned externally. It is a largely domestic stock market in the u. S. You have lots of retrading. There is no particular reason to the valuations are miles apart. It is a 70 year gap in u. S. Equity versus European Equity valuations. There will be those that say the u. S. Market no longer reflects the u. S. Economy. That is a fair point. The tangible assets versus intangible assets is 80 tangible. In terms of what is embedded in pricing. Price point. Be a for some of the not necessarily the mega caps. , thises just below them is very 2000 again. Of revenues priced in. These internet disruptors. Now tech stocks apparently. This is what people have to be nervous of. Trading perhaps, but seriously by those who are infused by these things. I think the rest of us can recognize. Annmarie anna helping the bear case is the geopolitical tensions, whether the technology between china and the u. S. , tensions between the u. S. And iran, the u. S. And china over around. Over iran. Are investors going to wait until november and then take stock . A lot of professional , people dedicated to managing money for a career, are fully invested. I think that remains the case. , a very highoblem likelihood of a contested election is starting to come on the radar. People are getting nervous. The biggest trend we see is some parts ofzing , theychnology space should think about whether they should be somewhere else. Uy very cheaply. They are expensive sectors. Make is anvestors logical one of the value, whatever that means. Plain, vanillas stocks. ,asic kind of companies recurring revenue kind of companies. They are expensive. The tech sector is expensive. People are rotating. Part of that is again not the u. S. You can make a strong case regardless of the motivation for the very near term, the tech becauseive has to be they are stunningly expensive by most metrics. Sick with us. We will get more from peter toogood. We will also talk about nikola s founder. The public face of the embattled electrical vehicle startup. It will be an electrical Vehicle Company eventually. Step down as the company is facing an sec probe. Annmarie anna welcome back to the European Market open. Futures suggest downside. Talk about further restrictions in london and more broadly across. The ft reports the central bank will decide how long to continue the scheme and whether its flexibility should be extended to other qe programs. Oogood is still with us. How much of a game changer can these moves be . Corporate debt underpinned by support from Central Banks. Do you see the ecb reviewing this program . How big a fan are you . It is inevitable. Fingers crossed they do. We need all the support we can get. It would be good to see the european to the fullest extent they possibly can. Europes challenge remains the same. You have continuous challenges. And the authorities recognize we are effectively in a set up, the more they can think about supporting the market. The ecb has had a previous track record that is not reacting quickly enough. They realize they need to be on the front foot, which is encouraging. You tend is a longerterm investor to think about im just trying to be realist. Masse going to have participation in a vaccine halfway through next year. The vaccine is not the answer to the question right now. We have to provide as much support as is practical. Big news in the ecb for motivating us. Be concernedwe about the report banks were doing trillions of dollars with they likelyh people knew they should not be dealing with . Or do you think the reports are blown out of proportion . Think that is just profitseeking behavior to be expected . It is a bad look for everybody. The banks are under enough pressure. Regardless of this particular storyline, it is hard to make a case for banks with Interest Rates at zero, the u. S. Economy may be different from japan, but for Interest Rates to be flatlining, it is zero for what amounts to years, the Federal Reserve invited the main banks to the party last week. It is very hard to make a sustainable case right now. I suspectt another nail in the bank coffin to be blunt. Anna on the subject of Balance Sheets, you sent a nice graphic this morning that shows how intangible assets on Balance Sheets are looking pretty high. Sheets, 60 in the mid90s. What does that mean for you . With thethe problem constant argument on valuation. The cheapness of value stocks. We are all using metrics of 20, 30 years ago. The fact of the matter is it is all intangible. What does alphabet to with this Search Engine . What does facebook do with its advertising . Intangibles. The growth and value seems a bit glib. Gdp is whatigh value responds to in global terms. That is not happening anywhere soon thinks to covid. Interest rates are already zero. It is support programs all around. Very hard to jump into value. I will get back to my point again. Valuations coming into the u. S. Were egregious. We have a worse economic environment. That is the real problem investors are facing. On. Have this cycling going markets really not progressing anywhere. Matt thanks so much for joining us. Appreciate your insights. Thanks forod, joining us. Will we see another lockdown in london . Sadiq khan will recommend tighter measures today. Anna futures continue to point to the downside. Investor opinion worsening as we head through the past half hour. Now for our morning call. Goldman sachs say value shares are a better way to bet on a covid19 vaccine then cyclicals. Juliette saly standing by. We know value has been doing so well so far in september after underperforming of late. We see the 1000 value index on track for its best month against the 1000 growth gains since march 2001. Goldman certainly backing this trade saying we start to look toward catalysts for a vaccine, value stocks have short duration cash flows, so will outperform versus cyclicals and defensives which have similar durations on average. Vaccine withof a value. When it comes to some of the semiconductors with retelling of the lowest correlations. In terms of this value trade, tailwind factor is the to value according to strategist. Time for value to shine, perhaps the russell 1000 value index only has about 7 since the end of 2016. The growth gauge has more than doubled in that time. Matt interesting that tobacco has a high correlation with a vaccine odds. You are getting a call from socgen on the pound. What is the story . See this as we start to the likelihood of negative rates coming from the bank of england. Saying the prospect of below zero rates could actually realhe fairweighted tradeweighted value of the pound fall to a record low, suggesting this coupled with a no deal brexit would lead to a 4 fall in the value of sterling against the dollar over the next months. This is a call led by socgen which says negative rates are more likely to scare away investors and soften the low. They say the best way to trade this likelihood as we start to factor in the prospect of negative rates from the bank of england is through gdp and jpy shorts. That is their favorite way of a short sterling trade. Matt thanks very much. Juliette saly in singapore. Lets get the Bloomberg Business flash now. Bankslobal crackdown on does not seem to have curbed specific suspicious activity. Billionn 2 dollars in transactions after the u. S. Penalize them. The files were released by investigative journalists. A whistleblower at boeing is urging aviation regulators to add additional protections to grounded 737 max. He says the proposed fixes do not address multiple hazards. The faa has to review more than 160 comments filed before deciding whether to approve the planes return to service. Theld trump is celebrating tiktok deal despite it falling short of his key demands. The chinese owner will still have an 80 stake in the new company. The white house gets a u. S. Headquarters and the promise of new jobs. Of 60is seeking a billion. Billion. Tion of 60 nikolas founder is ng withng, leavi immediate effect. You have been following this extensively for a long time. Why is he leaving now . According to the company and according to milton it is because he does not want to focus to be on him. He wants the focus to be on ni kola and its lofty ambitions with regard to clean energy vehicles. Bloke bloomberg broken news looking into a short ander which alleged nikola another company had been involved. Company had not really communicated at all until about half an hour ago. Rationale. They want to be focused. A change of leadership allows them to do that. Matt what does this actually change . Leaves, it does not mean they all of a sudden have this proprietary technology everybody wants to get their hands on or experience in building vehicles of any kind. Two answers to that. The first one is that investors and wall street in particular have struggled to keep up with trevor. Lot. S previously tweeted a he takes to instagram regularly. Madee past he has announcements about Companies Technology or strategy or its plans before the company has officially communicated it. He has also made contradictory statements which i have written about over the last month. He has confused investors on the earnings call. Took the opportunity to say what is your communication policy . It is difficult to follow whats going on because of tweets. The other part is that because of this policy of taking to social media, sometimes in a way that contradicts official statements, investors have found it hard to understand the core of business plans. They have all the target data for different vehicles using different technologies. Fuelcell trucks in arizona by 2023. This pickup truck built with. With gm. I spoke with one of the large Institutional Investors and he was making the point that the business is all about hydrogen. Hydrogen fueling infrastructure. The trucks is just a mechanism to bring that to fleets and buyers of commercial vehicles. That has been the story. It has been difficult for investors to understand them. I think the hope is there will be clarity now and a different policy with regards to how the company communicates. Anna thanks for bringing this story. Ed ludlow bringing us the latest on nikola. Next on this program, asking prices in u. K. Property rights the most since 2016. Of support hast gone into this industry, is it sustainable . Anna welcome back to the European Market