Election story, and whether the market is saying we want to seek some safety and the dollar is the place to do that. The yen was trading lower against the dollar a little bit earlier on, but eurodollar now trading with a 1. 17 handle. What youre seeing in germany, u. K. , canada, and the United States is quite a sharp curve flattening, pivoting around the tens. The 30s are down quite hard in terms of the yield, so a big bid at the back end of the bond market. Alix all part of that is the virus story you were discussing, so lets get to that. U. K. Chief scientific advisor warning of 50,000 new cases a day by midoctober if urgent measures are not taken. Cases are increasing. Hospitalizations are falling. Deaths unfortunately will follow that, and there is the potential for this to move very fast. At the moment, we think that the roughly is doubling every seven days. If we dont do enough, the virus will take off. If we do not change course, we are going to find ourselves in a very difficult problem. Borisprime minister johnson will address the house of commons tomorrow on the virus, expected to impose additional restrictions. Joining us now for more is Council Chair for the british medical association. Does the u. K. Need a lockdown 2. 0 . We dont need a full lockdown. But we need is some very robust, clear messages, clear protocols, and Decisive Action and enforcement to prevent the virus spreading. Remember, after the first lockdown, we got down the daily new cases to around under 500. Now it is above 4000. So we know it is possible for people to behave in a way to prevent spread. We need to get back to that, and there are some simple but enforceable decisions the government needs to make sure happen in the coming days. I am wondering where the new cases are coming from. There is a huge debate about whether or not we should be sending children back to school, whether people should be going back to their offices, whether or not they should be socializing in the evening. Where are we seeing most of the cases coming from . Chaand in the u. K. , and this is replicated in europe as well, the new cases have originally come from younger people, which is why initially, we saw an escalation in cases, but not an torease in hospitalization any large degree. What is worrying is that how those cases amongst the younger population are spreading to people who have underlying conditions, two older people, and we are now seeing significant increases in patients being admitted to hospital on a daily basis, and also seeing significantly increased numbers who are now on ventilators. That is not the same as the levels we saw during the first peak, but the warning is that if we dont act now, we could start to see a real magnified level of spread and hospitalization. So what we must do, the important point is how do you reopen society in a safeway. How do you allow people to go to work in a safe way . What restrictions should be in place at the moment to prevent spread . The priority really must be to bring down the infections and the spread of infection, and that is what will help the economy to reopen. By having a situation where we have several local lockdowns in the u. K. , what that does is it paralyzes those cities. There are several cities in the u. K. Which are under severe restrictions, basically a local lockdowns, and that is because the infection has been allowed to resurface in those areas to a large degree. What we need are very stringent measures, and that is not the same as a lockdown. I think we need a national lockdown, but we need real enforcement of measures. Alix this conversation makes sense to me in march or april, so i dont understand why this conversation is happening yet again at the end of september, and why different measures would make sense now if no one did them in the last six months. Peopleople bid chaand bid, during the first lockdown, stay at home and did not mix. People are obviously wanting to socialize. The important measures that any government needs to put in place is what the rules around safe interaction with others should look like. We have something in the u. K. That is called the rule of six, that allows members of six different households of up to six people to meet indoors. We know that the more households that meet indoors, the more chance of spread. That should be reconsidered. We dont have a mask policy in the u. K. That is consistent. For example, shops and restaurants and bars do not have to wear masks. We believe that is wrong. We believe that should be mandated and all such settings. There is a call in the u. K. Government to try and encourage people back to work. We believe that if people can stayathome and work effectively remotely, they should be encouraged to do so because the more people mix, the more chance of spread. We also believe we need to have much greater information to the population. I look at the weather every day in my local area. Local populations should be able to see the level of infection in their local area because we believe by having that realtime information, it may result in behavioral change. But also, we need enforcement. It may sound unpopular, but you have to enforce these measures now to make sure we dont get that spread, and many workplaces , many restaurants, many public settings are operating with people very close to each other, without barriers. It is clear, you dont need to be a scientist to know this infection spreads by people mixing. They need to mix in a safeway. Those are the measures in a safe way. Those are the measures we are calling for. Guy what is your expectation of the trajectory throughout the autumn . Clearly this is going to be affected by changes in behavior, but what we talk on this channel are the Economic Impacts of the virus in various countries. What do you think we are going to see in the u. K. As we go between now and christmas . How much activity to get think there is going to be . Will i be able to return to my office . These are the questions that people who run businesses are trying to figure out right now. What message would you send to them . Chaand i think the way in which our economy will have any sustained ability to resume properly depends upon very immediate measures to drive down the infection. Is not really an argument you should Prioritize Health over economy. The best thing for the economy is to bruising is to bring the infections down. If people can work remotely, theres no need to ask them to mix with others if they can do a perfectly Good Days Work from home. All workplaces need to have the right adaptations to keep people apart. If you have barriers and there is consistent use of face coverings, you will mitigate against the virus spreading. This is what i think should be done not just in the u. K. , but another part of the world. I think governments should invest in and support many businesses who may not otherwise be able to put in place those measures because most workplaces were never designed for people to work two meters apart. So i think there is certainly a need to support businesses to operate, but to do that in the white right in the right way. Others in the high street settings, we called for the of face masks and coverings to be available at the entrance. People should not be put in the position of infecting others. There are plenty of other measures. Restaurants should have probable should have proper separation of tables. I thick is about resuming business in a safeway, and that is a Sustainable Way to bring back the economy. Guy think you very much indeed for your time today. We greatly appreciated. Nagpaul, the chairman of the british medical association. This is bloomberg. Guy live from london, im guy johnson. This is the european close on bloomberg markets. European stocks down over 3 . Joining us now is seema shah, printable Global Investors chief strategist. What do you make of the price action . This wasthink some of in evitable. We just come off of a couple of weeks where investors were already starting to question the evaluation question the evaluations of equities. Theink as we get into virus, things are going to pick up. If you take a look at the last week, but was interesting is the rotation change. You have financial consumer discretionarys selling off, things performing less bad. The rhetoric was we are going to rotate out of tech, get some cyclical names. That is going to cause some churn in the markets. Much of that is playing out here . Seema that has certainly been an element. What you would initially expect is that after recovery continues to firm up, you see that bit of rotation away from tech and into more cyclicals. Unfortunately, because tech is such a heavy part of the u. S. Index. Is still very uncertain. It is still very dependent on the path of covid. From Asset Allocation perspective, how do you put that into actual investment . It just means you need to maintain some of that defensive positioning, which is where Health Care Comes in, were tech still comes in. These are the companies that investors should keep hold of because theyve still got the strong Balance Sheet and the positive cash flow, and there is a secular growth story there. Guy theres been this narrative over the last two or three months that europe is the place to rotate towards, that europe has had a better handle on the virus, that you want to get access to some of the story around the sustainability push that europe is putting in place. Does the virus in the surge we are seeing on this continent undermine that case for rotating money toward zero towards europe . Seema i would say it undermines it a little bit. The reason investors were starting to like europe more wasnt just because of the handling of covid. It was also because of a more , somic and credible ecb people really have confidence that they would do whatever it takes, and the second thing was the eu fiscal framework. Those factors are still there. Materializes,art i think we will have to separate europe and the u. K. Europe could be a lot worse than what we are expecting for the rest of the continent. From a market perspective, it still makes sense to have some exposure from europe, but we have to admit that there are growing question marks over this. Alix nor i norway once the Sovereign Wealth Fund to diversify more into north american equities, saying that will represent better Value Creation for all of the Companies Listed globally. Can you fight against that kind of money at the end of the day . Seema that is a very good point. The chemicals the technicals every day are going to be very significant drivers of where we see the market. You should have global diversification. If we have learned anything over the last eight or nine months, it is going to be different waves, different parts of the world doing ok, so diversification should be a part of anyones portfolio. Guy in the notes i read that you sent, you talk about the u. K. Being a value trap. You just referenced u. K. U. K. Assets may look somewhat attractive on a valuation, but Global Investors would do well to avoid this value trap. Why is the u. K. A value trap . Seema i dont even know where to start with the u. K. To me it just looks like a complete basket case. You have the brexit discussions taking such a negative turn at precisely the wrong moment, when Economic Data is starting to lose momentum. You have covid numbers picking up to the point that we may be the only country in the world where we are actually discussing another national lockdown. It just goes to show the kind of problems the u. K. Economy is facing. Yes, from a valuation perspective, maybe it does look more attractive than other parts of the world, but i would say that investors should be very worried because theres a lot of hurdles coming into the u. K. Over the coming months. Alix wheres the safety trade . Trade is stillty mega caps. I understand that these valuations, it is not going to be everyones cup of tea, but you have to look for the companies which are still going to be around in the next year or so. To us, the Technology Story is probably not going to be as strong as the last couple of months and start to fade a little bit, but technology is really a key part of our life going forward. So Big Companies really focused on technology is still our safety trade, and of course, the technical safe havens still have somewhere to go. Treasuries, it is expensive, but we think if times get potentially tougher than this, i think treasuries are still he good bet. Guy how much lower could yields go, do you think . Seema lets just look at germany. Limit . E really a lower if we look for five years ago, what are the key things is you nds atsolutely not buy bu that level, and look at where they got to. It depends on how the covid pandemic pans out. From my perspective, i know the underlying story is still pretty gloomy, but we have to remember that Central Banks are standing very firmly behind markets. Theres a lot of liquidity around the market, which mix it very difficult to see a significant correction in risk assets. To us, it still makes sense to be invested, but of course you have to be very concerning. Alix stick with us. Seema shah of principal Global Investors will be sticking with us. Theing up some steam to downside of the u. S. , dow jones off by more than 3 . S p off by more than two by 5 . More than 2. 5 . 30 year yield on by about four basis points. Gold selling off as well. This is bloomberg. Alix live from new york, im. Alix steel guy johnson im alix steel. Die jensen in london. This is bloomberg markets. Guy johnson in london. This is bloomberg markets. To the ceors spoke and cfo of Mahendra Mahendra. As we look at the auto business, that has been much weaker because of the lockdowns. Consumers have not been buying. We were at 50 capacity of months ago because of various stresses as well. That has gone up to 70 . I think they are starting to come back. Visibility is a little poorer in terms of what we would expect. It will take about three to six months to get anywhere close to normal, and getting to normal may take even longer than that. Our holidays business and hospitality has seen huge demand. Our resorts right now, because of how we need to manage the virus, we are only about 50 of rooms available for the because we keep them vacant for 24 hours but and so on. That is the Mahendra Mahendra ceo. If you want catch more of that, you can do that on Bloomberg Radio a little later today. Lets stick with the travel theme. The travel sector being hit hard today. Bloomberg intelligences Senior Analyst joining us today. Clearly, the virus is one of them. Lufthansa looks like it is accelerating its cuts, just a this view of the world and how downbeat it is right now. There also all kinds of pieces in the weaken paper, one of which talked about escrow accounts for travelers money that the airlines cant access until they actually deliver. The news gets tougher and tougher. How much more of this can the Airline Sector take . Reporter i think we are certainly looking at a multiyear recovery, and frankly, that reality is still settling in. If you look at what the airlines iag, the owner of british airways, just raised 2. 7 billion euros. Ryanair raised 400 Million Euros at the beginning of the month. Easyjet did 490 Million Pounds this summer. We are seeing very significant dilutions. Youve got to spread those future earnings across a much wider share base. It is not the money is being used for new business opportunities, m a. It is just being used to survive. Alix what kind of numbers are we talking about in terms of more government bailouts. It is very interesting. The u. K. Government has been pretty stingy with the airlines so far. You have seen them pretty generous support coming from the french government, the german government. Tens of billions of euros being doled out in those countries to help the airlines survive. When we look at the Balance Sheets, we look at how much cash theyve got, when we look at how much total liquidity theyve got, saying how long can they cover their costs, we think there is a good chance the airlines are going to need more capital, whether from the private sector or from the state, if this continues into the next year. Much,ob, thanks very indeed. Rob barnett of bloomberg intelligence. I will be talking to a number of the ceos of Global Airlines here. We will be talking to the united executive chairman, easyjets ceo, lufthansas ceo at the World Aviation festival thursday and friday. We are hoping we will be able to bring you some of those conversations, but just listening about the u. K. Government being stingy, if you talk to easyjet, very unhappy about the way things are being handled. He worried about the longterm economic implications of this, whether or not airlines such as air france or klm may uttentially be running ro economically in the future. The futures are still very much in survival mode. They are trying to figure out what they are going to do next. If you took a look at the Chinese Market, the Chinese Market domestically is kind of back to where it started. Nevertheless, europe feels along whale away feels a long way away from there right now. These are the numbers. They certainly make for bleak reading today. This is bloomberg. Look here, its your very own allinone Entertainment Experience 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. Guy 30 seconds until the end of regular trading in europe. Wrapping up a brutal monday. Let me walk you through the price action and give your idea of what is going on. Extra sell