The bloomberg. Forced to come. Jerome powell said the u. S. Economy is heading into in uncharted territory. Morgan stanley warns the nasdaq 100 could enter a bear market. U. S. Tissue paper Prime MinisterBoris Johnson is set to sound the up Prime MinisterBoris Johnson is set to sound the rise. After covid19 cases hsbc orders a halt to social media posting after a leaked report linked to the bank to suspect transactions. Shares slide in hong kong for the second day in a row. Just under an hour away from the start of cash equity trading in europe. Take a look at futures after the big, fat drops drops we saw yesterday. The dax fell 4. 3 . The drops were much bigger in europe than they were in the u. S. The u. S. Saw drops between 1 and 2 yesterday. U. S. Futures are still down about 0. 5 . Anna, what do you see on the gmm . Anna lets get to it. We have the reaction we are getting in the european session. What we saw overnight in the u. S. , rather. A bit of selling. It is quite dramatic. The more extreme moves we are seeing are to the downside, but i would say overall, we are only down about 0. 6 on the asian market, so not such big losses as we saw yesterday. Europe so extreme versus what we ended up seeing in the united states. Perhaps there is room for a little bit of rebound in asia. Japan is closed, so that is something to bear in mind when it comes to liquidity in these markets. Lets get to breaking news on the leisure sector in the u. K. The extent tois which we will have to see restrictive measures reintroduced. I hesitate to say lockdown because it is not quite the same as march, but certainly restrictions on the operation of the leisure sector. For anybody tracking the unemployment story in the u. K. , it has been resilient, but will that reality hit us if furloughs do come to an end at the end of october . Lets get the bloomberg first word news update. Good morning. Oracles deal for tiktok is in doubt. President donald trump said he may renege on approving the idea. Bloomberg there are still concerns about the data of more than 100 million americans in the hands of a chinese company. President donald trump is moving toward naming Amy Coney Barrett to replace Justice Ruth Bader ginsburg. She is a favorite of the antiabortion lobby. Cook says he was impressed by his staffs ability to work from home, predicting some new habits will remain after the pandemic. He said he does not think apple will return to the way things were, but hopes most staff returns to the office eventually. The vast majority of us cant wait until we can be back in the office again. Occursw, hopefully that sometime next year. Who knows exactly what the date may be. 10 , 15 working in the office. Im in the office. At different points during the week, as well. Daylobal news 24 hours per in air and at bloombergquint take powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt. Matt laura, thanks very much. Laura wright in london with your first word news. Asian stocks dip. U. S. And european futures mixed after wall street slid on concerns of coronavirus restrictions. The bigger drops were here in europe and those coronavirus restrictions seem to be giving up more talk about job cuts in the u. K. Lets get over to mark cudmore, bloomberg mliv managing editor in singapore. Anna just shared a headline. Whitbread is consulting on about 6000 job cuts. , the traveli operator, starting a program to cut costs by 30 and potentially looking at 8000 job cuts. How concerning is the possibly the of deeper restrictions due to increased covid infections . It is very concerning. We were expecting these furlough programs to end in about six weeks. We were expecting a lot of job losses to come through in the u. K. And now we potentially are dealing with a closed down society again. We were already expecting some job cuts. I think that the u. K. Has already been one of the economys most pressured by the pandemic. , that wasforecasts before these lockdowns. The situation for the u. K. Economic outlook continues to be very dire and we have the whole brexit situation in the back round, as well. Market, good morning. Europe and the u. S. , we saw divergence in the share price, europe really selling off a lot more. I wonder if we are on a slightly different timeline right now between europe and the u. S. I wonder if that will continue into the winter . That might have an impact for the amount of liquidity that is available, the amount of support available fiscally and monetarily from various parties around the world, i suppose. Mark i think that is absolutely right we are on very different time spans. A large part of the selloff in europe was driven by this new market share around the pandemic that has come back on the radar in a big way in the u. K. At a time when it is waning as a Market Driver in the u. S. Not just in terms of policy responses, but the pandemic is looking different in different countries. We are still in a globally connected financial market. Assets, whensome some markets are selling off quite hard, you will start targeting the assets that are most overvalued. European equity markets are quite beatendown. I think u. S. Markets will selloff very aggressively because they are the ones that are much more stretched. I dont think they will escape this even if they are slightly different relative to the current risk aversion we are seeing. Matt but if you see the dollar continue to fall, it makes sense to buy overseas asset. Is that your expectation . Longerterm, i still believe in the secular dollar downtrend. Short term, i dont at all. I think we will have more of a dollar bounce. It goes back into the different time span. If we continue the fed risk aversion, then i think it will look much more favorably on assets outside the u. S. , i thinkortterm basis it is going to be more a factor after this current correction is over, which does not seem like it is quite there just yet. Anna mark, thank you so much for joining us. If you want to get involved and have your say, let the market live team know. Involved with that. In particular, they are interested in your fx thoughts today. The market slump going to continue . Asian stocks and u. S. Futures drop as a rise in coronavirus cases hurt sentiment. We will be looking ahead to todays Market Action next. This is bloomberg. Clearly, the mood has soured a number of funds and has created some air pockets for the market. We have seen yields falling a little bit. I think a lot of it is atmospherics. The stimulus tantrum that we have not received any new stimulus news in the month of september. We have just come off the back of a couple weeks where investors are starting to question the valuations. As you get into the end of the air, as we get into the colder months, virus numbers are going to cap. We still have the u. S. Election approaching. This is the perfect storm for a lot of volatility. I think there are concerns that this uncertainty around the election is going to stay with us for a period after the election. The first thing i would say is i would keep my powder dry. I also dont think it is the beginning of a bear market. That was a string of market operators commenting to bloomberg. Stocks slumped over tighter coronavirus restrictions and increased infections every it we are joined now by joanna kirkland, cio and global head of multiasset investment at schroders. Thank you for joining us. Let me ask you about your concerns. Is this market going to hit tighters we see restrictions due to Coronavirus Infections . Think some volatility was inevitable after a strong summer. Not only are we heading into a winter with the potential for higher infection rates, but the risk of a contested election. We do have a bit of a pause, that is what we are seeing right now. Anna im looking at a chart of the vix this morning, it certainly suggests that yes, there is volatility in markets yesterday and investors perhaps are nervous about the possibility of march. But we are not in march. Is that important context . Johanna i think it is very important complex context. It has gone to a chronic problem. Back in march, we had no framework for thinking about it. Aboutwas even a question whether the fed would intervene at one point. I think this time around we do have much more clarity about how the governments will react. Going to have a second wave. That has to be a central scenario. For the market, it wont be as bad as it was in march. Matt what will the biggest problem be . We see the headlines cross. Thousands could possibly be fired. Airbus says its life is in danger. Does this mean we could see Consumer Spending falling, retail sales falling . Monitoring have been Consumer Spending and we see that certainly we are not getting any kind of vshaped recovery. I assume that anyone who is thinking that is not thinking that. Partially, we are in hibernation and companies are starting to react to the hits to their business model. We will likely see pressure on employment. Decliningfor some economic momentum over the winter. I think we do have some challenges here. Having said that the fact that rates are so low as underpinning valuations on the market. Your what does that do to equity portfolio . How do you position ahead of the winter . Johanna we have been favoring credit and that is an opportunity. Have snapped back. In order to generate return, one does need to move up the risk curve a little bit. We probably see volatility as an opportunity to rebuild our exposure to risk assets. I think this is probably a view shared by a lot of ambassadors. Matt do you build those risk assets outside the u. K. As it seems to be hit harder than most by the coronavirus lockdown restrictions expected sooner and jp morgan shipping bankers out because brexit looks like there could be no deal . Weanna u. K. Is a market have avoided for a long time and we continue to avoid it. Talking about an anemic economic environment, one of the challenges is it is hard to retain value. From a market perspective, the u. K. Has that trouble because of it sector composition. We are generally negative on the u. K. Because we favor highquality exposures. Really, there is not much reason to go back to the u. K. The only thing that could be act as is sterling does an important shock of zorba for the u. K. Market. We are seeing a red headline that the u. K. Government tells people to work from home if possible. This a step change in our expectations for how the winter goes . Or was this many peoples ace case anyway . That those who were fortunate enough to be able to work from home would do so to make space for people who have to go to work . Johanna i think this is the base case for the city. All companies have been talking about some form of working from home probably until march. I dont think this has surprised the city. Anna thanks very much. Johanna kyrklund from schroders stays with us a little bit longer. Up, and uncertain recovery. Fed chair Jerome Powell has a stark message for lawmakers, the u. S. Economy has a long way to go before climbing back to precovid levels. We will discuss next. This is bloomberg. To theelcome back European Market open. Inminutes gone 7 00 here london. Lets get back to that breaking news with Johanna Kyrklund from schroders. The u. K. Government tells the public to work from home if possible, a change in the guidance for some people. The u. K. Cabinet minister speaking on media here in the u. K. Saying the u. K. Government tells the public to work from home if possible. Turn around and go home. Anna whether you head home right now. We are also getting comments from the mayor of london saying he will be putting his london plan for the Prime Minister and calling him to act now to slow the spread of the virus across london. Toanticipate some measures tackle outbreaks in the hospitality sector. Matt here is a chart you can find on the bloomberg. Of is number 1838. You can see the tick up in infections. New daily cases. The question is what does the fatality rate look like and the warning we are hearing from doctors, from scientists is that the fatality rate, which has made relatively low compared to the initial outbreak could start to pick up again. That is one of the main concerns leading to this. Khanu said, sadiq commenting on his plan in a tweet. Michael gove setting up new government approach to the coronavirus earlier. So, the government is instructing people to work from home. Anna, just as you get back to the office. You have been back what, two weeks now . Anna this is two weeks. Lets not dwell on my poor timing. Fed chair Jerome Powell said the u. S. Economy is improving but has a long way to go before fully recovering from the pandemic, but dallas fed president Robert Kaplan said he disagrees with this outlook, finding the guidance to restrictive. Lets take a listen. Currentould keep the setting of the fed funds rate, 0225 basis points until we have weathered the pandemic and we are well on track to achieve full employment and price stability. That, by the way, is probably 2. 5,to take at least 2, three years. The issue is beyond that point, once we are on track to reach our goals, i probably think it is appropriate to remain accommodative or maybe even highly accommodative. Im not sure it is appropriate to decide right now that at that point we should leave rates at zero. I would rather leave those judgments to future committees because i think the world is going to look very different host pandemic than it does now and i would rather leave the judgment to future committees who can assess all the factors relevant and where to make that decision. Does that suggest you think we could come out of this with faster growth than most people are anticipating . I will put it a different way. In my own forecast i think we will have solid growth in the Third Quarter, 30 annualized, a strong Fourth Quarter, above trend growth in 2021. In my own forecast by the year 2023 i know that is going out a long way we could start to approach an Unemployment Rate sayainly below 4 percent, 3. 5 to 4 . I believe that is possible. Obviously, a lot of that is going to depend how well we manage this virus, fiscal policy, and a whole range of other decision, but when we get to that point, the question before the house is, do you want to still be accommodative in light of our new framework to meet our inflation goal . In order to remain accommodative, does that mean we need to leave rates at zero . Im not sure. It is hard to know right now that far in advance and i want to make that judgment at the time. Importantat it enough to dissent on . For me, it was. The reason it is is by making this commitment now first of all, there are a few reasons why i dissented. I wouldiew is that rather use Forward Guidance where we have more positive benefit. Going into the meeting, the world already thought rates would stay extremely low the next two or three years. My concern was that by making this commitment now, i was not sure how much additional benefit we were going to be. On the negative side, it means that if you are in the asset , akets, if you are a saver pension fund, a market participant, it basically gives you a signal that you are going to need to take more risk and my concern is about building up excess risktaking which can create fragilitys and other excesses in the system which are hard to see in real time and easier to see in hindsight, but could create issues for us to meet our goals, so that was the reason. I felt that the costs were not worth the benefits. In his news conference, chairman powell was at pains to say over and over again that the new guidance was strong and powerful, but there seems to be a lot of skepticism on wall street about that. I would not over read the Market Reaction. It has been a few days. I think these decisions usually the reaction is not measured in three or four trading days. It is measured in the fullness of time. I think making a statement that people should expect even beyond the pandemic that rates are going to stay at 01 tilray reach we reached 2 and are on track to moderately exceed 2 for some time, i think as the months and years go by, people will increasingly realize the power of that commitment. I think it is more significant than the markets may be initially realizing. Matt that was the dallas fed president Robert Kaplan speaking exclusively to bloombergs mike mckee. To the, we will speak ceo of the medical Share Company that has seen its share price balloon. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. More voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music anna good morning, everybody. 7 30 in london, 8 30 if you are in paris. Remember, europe was really an underperformer in yesterdays session versus the u. S. The nasdaq caught up for earlier losses, but it still left the dax down by more than 4 with some of European Markets down substantially. Lets take a look at events on the calendar today. Fed chairman Jerome Powell and u. S. Treasury secretary Steven Mnuchin will testify before the House Financial Services committee. They are likely to face questions about the cares act and any future stimulus. Matt . Ist later today, tesla going to hold its muchhyped battery day. Anticipation has been growing ahead of the event linked to the companys annual general meeting. Analysts speak about the potential possible game changer for the carmaker depending on what it says. United nationss General Assembly begins today. That event will be held virtually for the First Time Since its inception 75 years ago. Pharma Services Company ergomed s earnings