Story on the vaccine pause we were talking about with the cfo a little earlier on. We are waiting to see what news we get on the stimulus front as well. Brexit talks look like they are going nowhere. The s p is higher as we await news from apple. Day. Ve amazon prime the pound is lower, down by 0. 6 . The euro is softer as well. And there we go. We are watching the bdp trade the btp trade. This is we continue to see the redenomination trade factor into the btp market. Expectedue to see an further move from the ecb being factored into the btp market. How much further will it go . We will talk about that throughout the program. Alix as you were mentioning, countries across europe are widening curbs to get a grip on the fender mike thats on the pendant. In the on the pandemic. In the u. S. , there is still conversation about the election and pricing in a blue wave. Anwitiet more with dr. Bahuguna, Columbia Management head of multiasset strategy. Bahuguna thank you for having me on the show. The view is that we are likely to continue to see the pattern we have seen for the last several years now where u. S. Stocks continue to outperform international stocks, and we are of the mindset that that is likely to be the case despite what happens in elections in the u. S. Over the next few weeks. We continue to favor u. S. , continue to favor domestically oriented stocks, and that does we actually take a fairly neutral position when it comes to growth versus value stocks within the United States. Moves given the enormous we have seen in a narrow portion of the growth market, from an Asset Allocation perspective, neutral is the best place to be at this point. Guy so you dont see the outcome of the election having a meaningful impact on the market . Some ofguna i think that has already been priced in, and the sense that markets in the u. S. Are already expecting a fiscal packet of son magnitude, 2at 1. 5 trillion or trillion. It is a lot more certain if there is a blue wave, but it is priced in and some of the yield dynamics we see already in the more recent steepening, so yes, that would be very much a case to make for u. S. Stocks again over international if we see more than what has been priced in at this point. If we dont have fiscal, maybe u. S. Growth is around 3 , 4 next year. If we do get that, then there is another additional percent or so bringing u. S. Stock markets back into focus again, and making it a better place to invest in versus eurozone at the moment. Alix President Trump saying in stimulus, go big or go home. Aboutridge right now is 2 trillion, getting closer, but still no deal yet. The House Speaker digging in her heels. Guy was just talking about this earlier, that you have btps as record low yields yesterday, selling bonds with a 0 coupon. How do you think about that . If it is a u. S. Equity story with a blue wave, is this an ecb story . Is this a recovery story in europe despite the virus infections rising . Dr. Bahuguna that was quite a , andine today on btps that has been more in my mind a very eurozone specific story of more liquidity than recovery. We are seeing the second wave of covid in eurozone. Lockdowns andted restrictions of movement in certain areas. Whereet aside, we look at Market Investors can invest their dollars. Here are very few options the safer bonds in that zone are so btps aretive, actually quite attractive from a liquidity and bond market perspective. Also being boosted by japanese investors on the currency carry factor as well. Lets go to asia right now and talk a little bit about what is happening there. We were talking to the chief economist at the imf a little earlier on, making it very clear that the chinas economy is likely to outperform. Why not put money to work there . Why not try to take advantage of the economic upswing that is being experienced in china . Shouldnt you be repositioning out of the states to maybe look for some of that upswing . Dr. Bahuguna that is a very interesting point. I will enter that in two ways, looking both at the stock market and on the bond market. On the bond market side, we are quite constructive on emerging market bonds, dollardenominated. That is one area that gives you that are yields then what you are seeing in any market at this point. But from a stock market perspective, which is driven very much by earnings and sentiment, if you parse through what is happening in the chinese economy. The support and growth you are seeing happening in the manufacturing or the production component of the economy, which is supported by the state in its efforts. But if you look at the consumer side of the economy, it is underperforming u. S. And other consumers. So taken as a whole, we are supporting growth there right now. Aside from the fact that they are doing much better from a covid perspective, they are benefiting very much from an export oriented trade environment for the economy at the moment, driven by very pandemic specific trades, and not really broader global trade because, as the imf would point out, those trades are down 10 versus last year at this point. Certain sections of trade are benefiting, but overall, we are not seeing broadbased revival in global trade, a component that is really key for em equities to outperform significantly and persistently. From our perspective, we really like em bonds, dollardenominated, where there is still some decent coupon to be had. Alix how much of your portfolio should be in some kind of safety asset, and what would that safety asset be . Dr. Bahuguna that is an thatlent question because is one question that we come back to all the time. 60 40 portfolio. Are they still a decent portfolio to have . From my perspective, bonds still continue to provide a pretty decent hedge to volatility that accompanies a stock only portfolio. I still havent refound a really good up still havent really found a Good Alternative to sovereign bonds. If you look over the past five years, despite very low yields in the euro zone, japan, in eurozone particularly, despite low to negative yields, bonds have continued to provide a very good hedge against equities. So i think it is a pretty good place for sovereign bonds in any balanced portfolio. Guy on that note, we will leave it. Thank you very much, indeed. Thank you. Coming up, we are going to go into the fish story. The battle over fish is one of the issues at the heart of the brexit talks. Theill discuss this with president of the European Association of fish producers organizations. That is next. This is bloomberg. There are a number of weeks left in this negotiation, not a number of days. So when the European Council meets at the end of this week, there will be a detailed take on where we are in these negotiations, but i dont see that there will be any major breakthrough this week. I think there has been some progress on the level Playing Field issues. There has been little or no progress on fishing, and both sides are still very far apart. The message was very clear from ember states today. We value fishermen. We value their contribution across the european union. And certainly, eu fishermen are not going to be sold out in an effort to get an agreement on a future relationship with the u. K. On trade. The Irish ForeignAffairs Minister speaking earlier, generating some solitary. Fishing is one of the key issues in this ongoing brexit trade saga. Lets try to get some clarity on ultimately how a deal could be done. Pim visser, president of the European Association of fishing producers organizations, joining us now. Thank you for your time. It is a strange situation that we find ourselves in here. Eu fishermen need access to british waters, and british trawlers need to be able to land their catch in the eu. A deal seems to be logical, but this is a highly emotional subject. How can we get to a deal . What can a deal look like . Pim thank you for having me. A deal would be a reciprocal deal, so if we keep the situation as it is with the Fair Division of fisheries, access to waters, etc. , and the u. K. Keeps fair access, free of tariffs, to the european export market, that is a typical winwin situation. Alix can i ask the american question here . What is the actual problem, and how do you designate areas that you fish . What is the problem . Pim the problem is that we are neighbors, and we are not so far apart. We share than with see, and the north sea we share the north sea, and the north sea is one britishm, but it has a side and a dutch side and german side. It is in one ecosystem, but we partsivided that sea into , and the u. K. Is taking the approach not of the historical fishing rights, but of the socalled zone of detachment. They say, we dont care if it grows up in the waters of the netherlands. We catch it here, so it is our fish. That is a highly emotional approach from the u. K. Side. Guy if there is no deal, how bad will it be . Pim a no deal is a disaster for everybody, for all fissures involved all fishers involved. It is a disaster for british sellrs because they cant for the same price in europe, and a disaster for the dutch and for the french and the belgian and german fishermen because all of their fleets then need to fish on the nonbritish part of the continental shelf, and that is simply getting too crowded, which is not sustainable. Alix so what is the contingency plan . What would europe have to do to support their fisheries . Pim europe is always focusing on sustainable fisheries. The current policy is now the most sustainable policy of all, that we need to keep the fisheries sustainable. Then order not to over fish smaller area of fishing grounds. We need to keep fishing boats import, and the u. K. Will surert it, but we will but we are sure it will not come to that. We are sure that common sense will prevail. Guy it may not, and if it doesnt, do you think there is a be ablehat the eu will to support this industry through a very difficult period, to the point at which we could finally get some sort of deal done . What is the message you are getting from european politicians. We just heard from simon coveney, talking about the solidarity that europe feels with its fishermen. Do you think that will be backed up with euros if there is no deal . Pim the plan was already there for no deal a year ago, and the plan is still in place. The plan will come into force, so the money will be spent on fishermen who have to stay import. So europe stay in port. So europe will support their fishermen if there is a no deal situation. But i know deal situation will leave utter chaos in all parts. Logistical streams will come to a halt. So there will be a solution, and we are sure that common sense will prevail because fishermen in their communities, be it in the u. K. Or on the continent, fishing communities are dependent on fisheries. There are rural communities, small communities, and they should not be a bargaining chip in the larger political game. Alix as i understand it, fishing is a small percentage of gdp for both your about the u. K. Come up as you say, it is smaller communities. What kind of numbers are you talking about in contingency plans . Pim we are talking about 0. 1 of gdp, which is very little commode boo very little, but we are talking about 6000 boats that could be affected, and the processing industry that could be affected, trade flows that are affected. We have had a little taste of it in the covid crisis, when there was a blockage of trade flows, the only trade, the main course will be very bad. , the should really prevent politicians should prevent a no deal, but we are convinced that the eu is backing up the fishing communities, and we have a lot of solidarity with the fishing communities. We are convinced of that. Alix thank you very much. We really appreciate talking about this. Pim visser with the european producingn of fishing organizations, thick you very much. This is bloomberg. Alix time now for your Bloomberg Business flash. Jp morgan posting a surprise increase in thirdquarter earnings, profit boosted by a 30 increase in market revenue. Jp morgan also defied expectations by cutting its reserve for credit losses by 569 million. Shares of citigroup falling after the Bank Reported a jump in costs. Citi also warned it now expects a slower economic recovery. Those comments overwhelmed profit the top analyst estimates. Costs were elevated by a 400 million fine for failure to fix deficiencies in infrastructure and control. Assets under management at Blackrock Rose to a record 4. 8 trillion. The rising stock market was one reason, plus inflows to all of blackrocks product lines. The firm is the Worlds Largest asset manager. Flash. Your business guy . Guy lets get back to the wto story. The wto says the eu can now impose tariffs on 4 billion euros of u. S. Exports in retaliation to the subsidies the u. S. Gave to boeing. Airbus says it is willing to support talks for a fair settlement. Joining us now is bloomberg world trade reporter bryce baschuk. What happens now . Eu willhe u. S. And the begin talks in earnest. Dispute, youame in could say u. S. Has a bit of the upper hand in negotiations. The eu says it doesnt want to impose these tariffs, but it will if it has to. Right now, this will go into a bilateral conversation, and as far as the u. S. Is concerned, it is the eus turn to accept its offer. Alix is the eu going to do a little dance until november 4 . Bryce that seems likely. I dont expect them to act quickly here. With the uncertainty of the election hanging over this, it would probably suit brussels to wait to see who wins the u. S. Election, and then regathered to figure out if they are going to have to deal with the trump for another four years or the potential of a biden administration. We push forward into the next generation of aircraft and engines, it is clearly going to be very expensive for aircraft ems, to make this leap. Can a deal be made on how states can support boeing and airbus, and maybe come back over and china to get this done . Bryce but the u. S. And the eu realized that the bigger ballgame here is addressing chinas massive subsidies to its domestic industry. If the u. S. And the eu can get their act together and come to alignment on how governments can subsidize their airspace industries, then they can ideally bring that discussion to the wto, and ideally get china on board, where everybody is playing at a level Playing Field. That is a longterm play, and many steps have to happen between now and then, but that is the goal. Guy in terms of what this means right for boeing and airbus, does it mean anything . Thisg originally brought case to stop airbus developing wide bodies. Airbus has developed its wide bodies. We are not going to see anymore of those for a little while before they make the next leap to the next generation. Does this matter in terms of what boeing and airbus are doing right now . Bryce it is a good point. This dispute which is 16 years old is largely a relic of a bygone era. The eu doesnt even have any 0s, and produce new a38 at this moment in the coronavirus pandemic, both the eu and the u. S. Have struggling aerospace industries. This is a good time to regather and talk about what the future holds for the Trans Atlantic Alliance with respect to airspace. Guy we are going to leave it there. Thank you indeed. Thee baschuk joining us on wto story. Looking at pictures of the 747 s, which iag and others have just retired. The dax is down a full 1 . The cac down as well. Travel and leisure stocks coming off today. The banks are under pressure as well. Inre is certainly a collapse german Investor Sentiment at the moment, and the j j story in terms of the pause in vaccine develop and has until things. The details of the close coming up next. This is bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. Then its the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. Planks are the ultimate total body exercise. Build your upper body with pushups. Work your lower body with the aerosquat. The aerotrainer is tested to support over 500 pounds. It inflates and deflates in less than 30 seconds using the electric pump. Head to aerotrainer. Com now. Now its your turn to lose weight, look great, and be healthy. Get off the floor and get on the aerotrainer. Go to aerotrainer. Com, thats aerotrainer. Com. Guy 30 seconds to go until the end of trading here in europe. We priced in what is happening with the j j story. Then as the session progressed, we priced in some of the banks news, and stories on stimulus coming out of the states. Stocks are down 0. 6 , not a big down day but not pretty really positive. But captured it is captured in the serve you, the Investor Sentiment survey out of germany which collapsed expectations. Investors in europe are feeling less sanguine than they were a few weeks ago. Lets talk about what is happening more broadly. Some of the Asset Classes capture the news flow. We continue to focus on the btp story. This is a big, deep liquid market. Certainly the market is getting into it. We continue to see that today. Italy is taking advantage of this, today selling through your bonds at a zerocoupon. We have been seeing yields pushing lower into record territory in places like greece and italy, and benefiting from quantitative easing largess. Eurodollar is down 0. 6 . A dollar on the front foot. On the brexit front, not inspiring confidence when it comes to the pound. We have seen comments from the down 0. 7 . Land, individual markets around europe, down 0. 8 on the ftse 100, the dax and the cac. All trading lower. Bags. Banks are under pressure. We have seen some of the names doing relatively well of late. You can see this upswing in the stoxx 600 travel and leisure sector. Last week you saw stocks like iag really flying but that is starting to fly on the back of that news. Still the sector is up on the month. Carnival is trading down by 6. 41 . Airbus is also under pressure, more to do with the vaccine news run what is happening more what is happening with the wto news. Remember come at 29th is when we will see numbers from air us. We wi